Audit report, Wilkinson County Board of Education, Irwinton, Georgia, year ended June 30, 1998

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AUDIT REPORT WILKINSON COUNTY BOARD OF EDUCATION
IRWINTON, GEORGIA YEAR ENDED JUNE 30, 1998
STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

WILKINSON COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXHIBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES- BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

7

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

8

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

20

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

21

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

22

2 SCHEDULE OF STATE REVENUE

24

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

2S

4 SCHEDULE OF EXPENDITURES

LOTTERY PROGRAMS

26

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

S

OVERALL

27

6

BY PROGRAM

28

WILKINSON COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
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 INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133
SECTION ill 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

CLAUDE L. VICKERS
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta. Georgia 30334-8400
February 19, 1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board of Education
and Superintendent and Members ofthe Wilkinson County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general purpose fmancial statements of the Wilkinson County Board of Education, as of and for the year ended June 30, 1998, as listed in the table of contents. These general purpose financial statements are the responsibility of the Wilkinson 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 generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
Governmental Accounting Standards Board Technical Bulletin 98-1, Disclosures About Year 2000 Issues,
requires disclosure of certain matters regarding the year 2000 issue. Wilkinson County Board of Education has included such disclosures in the significant commitments section ofthe Notes to the Financial Statements. Because of the unprecedented nature ofthe year 2000 issue, its effects and the success ofrelated remediation efforts will not be fully determinable until year 2000 and thereafter. Accordingly, insufficient audit evidence exists to support Wilkinson County Board ofEducation's disclosures with respect to the year 2000 issue made
iIi the Notes to the Financial Statements. Further, we do not provide assurance that Wilkinson County Board
98ARL-13A

ofEducation is or will be year 2000 ready, that Wilkinson County Board ofEducation's year 2000 remediation efforts will be successful in whole or in part, or that parties with which Wilkinson County Board ofEducation does business will be year 2000 ready.
As described in the notes to the general purpose financial statements, the Board'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 did not contain a General Fixed Assets
Account Group to account for property and equipment owned by the Board 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 fmancial statements.
* The Board did not recognize as expenditures, in the year ended June 30, 1998, a portion of salaries
and the corresponding employer's cost ofrelated benefits earned for contractual services completed prior to June 30, 1998. Also funds received, subsequent to June 30, 1998, from the Georgia Department ofEducation 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, 1997, were improperly recorded in the year ended June 30, 1998. 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 fmancial 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, as might have been determined to be necessary had we been able to examine sufficient evidence regarding year 2000 disclosures 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 fmancial position of the Wilkinson County Board of Education as of June 30, 1998, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated February 19, 1999, on our consideration ofthe Wilkinson County Board of Education's internal control over financial reporting and our tests ofits compliance with certain provisions of laws, regulations, contracts and grants.
Our audit was performed for the purpose of forming an opinion on the general pUrpose fmancial statements of the Wilkinson County Board of Education taken as a whole. The accompanying combining statements (Exhibits E and F) and the financial schedules (Schedules 1 through 6), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-l33,
98ARL-l3A

Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes ofadditional
analysis and are not a required part of the general purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and in our opinion, except for the effects ofsuch adjustments, ifany, as might have been determined to be necessary had we been able to examine sufficient evidence regarding year 2000 disclosures as discussed in the third paragraph and except for the effects of the matters referred to in the fourth paragraph, such information is fairly presented in all material respects in relation to the general purpose 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 ofthe State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
CLV:jb 98ARL-13A

WILKINSON COUNTY BOARD OF EDUCATION

WILKINSON COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30. 1998

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
Inventories Food Donated Commodities Purchased Food
Amount Available in Debt Service Fund
Amount to be Provided in FutureYears For Payment of: Bond Debt Capital Lease Agreements
Total Assets

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$

274,940.89 $ 104,481.75 $

296.34

1,562,750.13

4,900,101.57

58,216.70

343,019.17

22,324.45

11,742.24 2,587.70

$ 1.895,907.72 $ 461,830.86 $ 4,922.722.36

EXHI BIT "A"

DEBT SERVICE
FUND

$

57,546.12

14,142.40

139,686.97

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

(Memorandum Only)

JUNE 30,1998

JUNE 30,1997

$

437,265.10 $

467,078.40

6,476,994.10

1,453,500.19

563,247.29

331,995.15

$

211,375.49

11,742.24 2,587.70
211,375.49

8,484.98 1,479.04

4,788,624.51 228,424.58

4,788,624.51 228,424.58

440,402.75

$

211,375.49 $ 5,228,424.58 $ 12.720,261.01 $ 2,702,940.51

$

32,558.12 $

123,651.75

$

228,424.58

228,424.58

5,000,000.00

5,000,000.00

$ 5,228,424.58 $ 5,384,634.45 $

30,269.15 116,177.60 440,402.75
586,849.50

$

211,375.49

0.00

$

211,375.49

$

$

211,375.49

172.60 6,762.83

11,742.24 2,587.70 4,922,722.36

8,484.98 1,479.04

2,187,t98.n

2,099,191.56

$ 7,335,626.56 $ 2,116,091.01

$

211,375.49 $ 5,228,424.58 $ 12,720,261.01 $ 2,702,940.51

-3-

WILKINSON COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30,1998

EXHIBIT"B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS (Memorandum Only)
YEAR ENDED JUNE 30,1998 JUNE 30,1997

$ 7,125,576.20 $ 6,783,300.85

1,234,213.98

981,635.45

$

197,156.87

3,904,959.38

3,620,071.89

$

71,696.02

142.40

426,626.95

284,858.16

$

71,696.02 $

197,299.27 $ 12,691,376.51 $ 11,669,866.35

$

0.00 $ 7,285,920.37 $ 6,941,765.96

$

136,703.66

12,270.00

531,897.31 431,418.16 215,379.92 258,655.58 672,539.42 264,990.94 880,074.30 792,917.78
47,187.98 862,906.26
12,270.00

535,032.91 457,877.32 215,419.10 224,540.55 601,755.75 127,355.64 963,848.43 798,536.55
2,131.24 29,010.37 735,540.96
1,895.00

211,978.17 22,146.91

196,754.38 37,370.70

$

148,973.66 $

0.00 $ 12,490,283.10 $ 11,868,834.86

$

-77,277.64 $

197,299.27 $

20t093.41 $ -198,968.51

$ $ 5,000,000.00 $ 5,000,000.00 $
$ 4,922,722.36 $ 0.00

14,076.22 $ 14,076.22 $

14,076.22 5,000,000.00 5,014,076.22

211,375.49 $ 0.00

5,215,169.63 $ 2,116,091.01

-198,968.51 2,313,627.76

3,257.26 1.108.66

962.30 469.46

$ 4,922,722.36 $

211,375.49 $ 7,335,626.56 $ 2,116,091.01

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WILKINSON 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. 1998

EXHIBIT"C"

FUND BALANCE JUNE 30. 1998

$ 725,668.12 $ 1,889,191.52

$ 179,658.01 $ 312,337.19

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

WILKINSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Wilkinson County Board ofEducation (Board) 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 Board is a primary govel'Illlient and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The Board uses funds and an account group to report on its financial position and the results ofits operations. Fund accounting is designed to demonstrate'legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available fmancial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time ofpurchase. A General Fixed Assets Account Group is not presently maintained by the Board. 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, liabilitjes and fund equity, nor the revenues, expenditures and changes in fund balances ofthese accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements.
The general purpose financial statements account for all State, Federal, Taxes and Other funds under control ofthe Board, 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 ofa Board's educational activities. "Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.
SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department ofEducation and from the Federal government to accomplish specific educational objectives.
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WILKINSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding and material capital lease obligations.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental 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.
Liabilities which are expected to be fmanced from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expectedto be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
Governmental 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 ofthe transaction can be determined and "available" means collectible within
the current period or soon enough $erea:fter to be used to pay liabilities ofthe current period. Those revenues
considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income.
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 1998, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1997 and ending in early June 1998. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1997 and ending in August 1998. State grants to fund the State's share ofthese contracts were disbursed from the Georgia Department of Education to the Board in the same twelve months. As of June 30, 1998, compensation under these employment
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WILKINSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
contracts had been earned, but two of the twelve monthly payments, due for July and August 1998, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1998. Also, the State's portion of the compensation paid in July and August 1998 was received and recorded as revenue in the fiscal year subsequent to June 30,1998. Conversely, the shnilar expenditures and related revenues for contractual services completed prior to June 30, 1997, were recorded in the year ended June 30, 1998. 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.
BUDGET
The Wilkinson County Board of Education's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure ofthe budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
. The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a :final school budget. This fmal budget is then submitted, in accordailce with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation. 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 of deposits in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Board 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. '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 bids Board to invest its funds. In selecting among options for investment or among institutional for deposits, the highest
- 10-

WILKINSON COUNTY BOARD OF EDUCATION

EXlllBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:

(l) 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 ot other grants for expenditures'made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

PROPERTY TAXES

The Wilkinson County Board of Commissioners fIxed the pr<;>perty tax levy for the 1997 tax year (calendar year) on October 20, 1997 (levy date). Taxes were due on December 20, 1997. The lien date for property taxes was January 1, 1997. Taxes collected within the current fIscal year or within 60 days after year-end are reported as revenue in fIscal year 1998. The Wilkinson County Tax Commissioner bills and collects the property taxes for the Board of Education, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance of taxes collected to the Board.

The tax millage rate levied for the 1997 tax year (calendar year) for the Wilkinson County Board ofEducation was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

15.5 mills

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WILKINSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SALES TAXES
Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and or debt service. Special Purpose Local Option Sales Tax collected by the State and remitted to the Board during the fiscal year amounted to $197,156.87 and was recorded in the Debt Service Fund. The State will terminate collection ofthis tax once an additional $7,302,843.11 has been collected or on March 31, 2003 whichever occurs first.
INVENTORIES
FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded 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 reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.
GENERAL OBLIGATION BONDS
The Board issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the General Long-Term. Debt Account Group.
INTERFUND TRANSACTIONS
The Board has the following types of interfund transactions:
Reimbursements ofexpenditures initially made from a fund that are properly applicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results ofoperations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation ofthis data.
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WILKINSON COUNTY BOARD OF EDUCATION

EXIllBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 2: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secmed by smety bond, by guarantee of insmance, or by collateral. The aggregate of the face value of such smety bond and the market value ofsecurities pledged shall be equal to not less than 110 percent ofthe public funds being secmed after the deduction ofthe amount of deposit insmance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of anyone of or any combination of the following:
(1) Smety bond signed by a smety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insmance on accounts provided by the Federal Deposit Insmance 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 ofthe counties or municipalities ofthe State of Georgia,
(5) Bonds ofany public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use ofthe bonds.for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and 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, 1998, the bank balances were $1,161,130.~4. The amounts of the total bank balances are classified into three categories of credit risk:
Category 1 - Cash that is insmed (e.g., Federal depository insmance) or collateralized with securities held by the Board or by the Board's agent in the Board's name.
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WILKINSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 2: DEPOSITS AND INVESTMENTS

Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Board'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 Board's name.)

The Board's deposits are classified by risk category at June 30, 1998, as follows:

Risk Category

Bank Balance

1

$ 257,842.46

2

0.00

3

903,287.88

Total

$ 1.161.130.34

CATEGORIZATION OF INVESTMENTS At June 30, 1998, the carrying value ofthe Board's total investments was $6,476,994.10 which is materially the same as fair value. This investment consisted entirely of funds invested in the Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services which are not required to be categorized since the Board did not own any specific identifiable securities in the pool. The investment policy ofthe State ofGeorgia, Office of Treasury and Fiscal Services for the Local Government Investment Pool (primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description ofthe Primary Liquidity Portfolio is as follows:

The Primary Liquidity Portfolio consists of Georgia Fund 1, which is a combination local and state government investment pool, and Fund 6. Georgia Fund 1 is a stable net asset yalue investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. However, Georgia Fund 1 operates in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and is considered to be a 2a-7like pool. The pool is not registered with the SEC as an investment company. The pool's primary objectives are safety ofcapital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and determines participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool do~s not issue any legally. binding guarantees to support the value ofthe shares. Participation in the pool is voluntary and deposits consist offunds from local governments; operating and trust funds ofGeorgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund.

Investments in Georgia Fund 1 and Fund 6 are directed toward short-term instruments such as U. S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Government or any ofits agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average

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WILKINSON COUNTY BOARD OF EDUCATION

EXIDBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 2: DEPOSITS AND INVESTMENTS

maturity ofGeorgia Fund 1 may not exceed 60 days. Fund 6 maintains a duration ofapproximately one year. The weighted average maturity for Georgia Fund 1 on June 30, 1998 was 29 days. The average investment duration for Fund 6 on June 30, 1998 was .96 years..

Note 3: NON-MONETARY TRANSACTIONS

The Board receives food commodities from the United States Department ofAgriculture (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 Board 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; natural disaster and unemployment compensation.

The Board has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions and natural disaster. The Board has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any of the past three years.

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

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

1997 1998

Beginning ofYear Liability

Claims and Changes in Estimates

$

0.00 $

7,060.00 $

$

0.00 $

2.320.00 $

Claims Paid

End ofYear Liability

7,060.00 $

0.00

2.320.00 $

0.00

The Board 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 of workers' compensation self-insurance for its member organizations. The Board 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 United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Fund in excess of $350,000.00 loss per occurrence, up to the statutory limit. Also, should losses within the retained limit of $350,000.00 aggregate to more than seventy-five percent (75%) of the standard experience rated premium during the policy term, the policy with the United States Fidelity and Guaranty Company will pay the next $1,000,000.00 ofloss.

- 15 -

WILKINSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 4: RISK MANAGEMENT

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

Position Covered

Amount

Superintendent All Employees

$ 50,000.00 $ 50,000.00

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The Wilkinson County Board ofEducation has entered into various lease agreements as lessee for computers. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value ofthe future minimum lease payments as of the date oftheir inception.

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

Purpose

Interest Rates

Amount

General Government - Series 1998

3.80% - 4.20% $ 5.000.000.00

The changes in General Long-Term Debt during the fiscal year ended June 30, 1998, were as follows:

Capital Leases

General Obligation
Bonds

Total

Balance July 1, 1997

$ 440,402.75

$ 440,402.75

Additions

$ 5,000,000.00 5,000,000.00

Deductions Payments

211.978.i7

211.978.17

Balance June 30, 1998

$ 228.424.58 $ 5.000.000,00 $ 5.228.424.58

At June 30, 1998, payments due by fiscal year which includes principal and interest for these items are as follows:

- 16-

WILKINSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

. NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 5: GENERAL LONG-TERM DEBT

Fiscal Year Ended June 30

Capital Leases

General Obligation
Bonds

Total Debt

1999 2000 2001 2002 2003 2004 - 2008

$ 234,125.08

$ 185,806.04 1,002,212.50 1,078,227.50 1,178,161.25 1,256,902.50 1.026.105.00

$ 419,931.12 1,002,212.50 1,078,227.50 1,178,161.25 1,256,902.50 1,026.105.00

Total Principal and Interest

$ 234,125.08 $ 5.727.414.79 $ 5.961.539.87

Deduct: Imputed Interest

5,700.50

Net Present Value of Future Minimum Lease Payments

$ 228.424.58

Note 6: ON-BEHALF PAYMENTS

The Board has recognized revenues and expenditures in the amount of$161,550.84 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies.

Georgia Department of Education Paid to the State Merit System ofPersonnel Administration For Health Insurance ofNon-Certified Personnel In the amount of $132,956.84

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 $28,594.00

Note 7: SIGNIFICANT COMMITMENTS

At June 30, 1998, the Board had $234,125.08 in outstanding contractual commitments for the purpose of making computer systems and other electronic equipment year 2000 compliant. The year 2000 issue is the result of shortcomings in many electronic data processing systems and other equipment that make operations beyond year 1999 troublesome. The year 2000 issue is of primary concern for the Board's financial accounting system and student information system. The following stages have been identified as necessary to implement a year 2000 compliant systems.

- 17 -

WILKINSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 7: SIGNIFICANT COMMITMENTS
Awareness Stage - Encompasses establishing a budget and project plan for dealing with the year 2000 issue.
Assessment Stage - The actual process of identifying all of its systems and individual components ofthe systems to check for compliance.
Remediation Stage - When changes are made to systems and equipment.
Validationffesting Stage - The process of ensuring that the changes made to systems and equipment will produce a year 2000 compliant system.
It will be necessary for the Board to progress through all four of these stages for each computer and/or electronic system, not already year 2000 compliant, in order to assure that these systems will not be adversely affected. As ofJune 30, 1998, the student information system was determined to be at the Awareness Stage.
The Board's financial accounting software (GENESIS) and hardware (Wang VS) is owned by the State (Georgia Department of Education). As of June 30, 1998, the State had not contracted for the remediation of either the Wang VS operating system or the GENESIS accounting software. In the subsequent period, the Georgia Department ofEducation has remediated the Wang VS operating system and the updated system was installed at all GENESIS sites as ofDecember 9, 1998. The Georgia Department ofEducation has remediated the GENESIS software and conducted tests at nine pilot sites. The remediated GENESIS software has been provided to all boards of education currently utilizing the GENESIS accounting software.
Note 8: 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 Board believes that such disallowances, if any, will be immaterial to its overall financial position.
The Board is a defendant in various legal proceedings pertaining to matters incidental to the performance of routine Board operations. The ultimate disposition of these proceedings is not presently determinable, but is not believed to be material to the general purpose financial statements.
Note9: 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 of Georgia (TRS), which is a cost-sharing multiple employer defined
- 18 -

WILKINSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

. NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 9: RETIREMENT PLANS

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 fmancial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Board who are covered by TRS are required by State statute to contribute 5% oftheir gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.81% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

1998 1997 1996

100% 100% 100% .

$ 800,590.99 $ 771,807.15 $ 721,488.65

- 19-

See notes to the general purpose financial statements.

-20-

See notes to the general purpose financial statements.

- 21 -

WILKINSON COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 1998

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASS THROUGH
ENTITY 10
NUMBER

Agriculture, U, S, Department of Pass-Through from Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program 1998 Grant National School Lunch Program 1998 Grant Food Distribution Program (1) Pass-Through from Office of School Readiness Child and Adult Care Food Program 1998 Contract

* 10.553 * 10.555
10.550
10.558

N/A $ NlA NlA
N/A

Total U. S. Department of Agriculture

$

Education, U. S. Department of Pass-Through from Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies 1998 Grant Title II Eisenhower Professional Development 1998 Grant Title VI Innovative Education Program Strategies 1998 Grant Goals 2000 State and Local Education Systemic Improvement Grants 1998 Grant Individuals with Disabilities Education Act Part B - Special Education Flow Through 1998 Grant Preschool 1998 Grant Safe and Drug-Free Schools 1998 Grant Vocational Education - Basic Grants to States High School Program Basic Grant 1998 Grant

84,010 84.281 84.298 84.276
84.027 84,173 84.186
84.048

N/A $ N/A N/A N/A
N/A N/A N/A
N/A

Total U. S. Department of Education

$

OTHER FEDERAL ASSISTANCE

Defense, U. S. Department of

Direct

Teacher and Teacher Aide Placement

Assistance Program

1995 Grant

$

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

152,264,30 370,065,13 $ 40,055.23
3,583.16 565,967.82 $

(2) 820,392.99 (3) 40,055.23
(2) 860,448.22

347,261.04 $ 20,537.13 12,450.00 139,440,97

347,261.04 20,709,73 12,450.00 139,440.97

100,304,96 2,671.27 9,836.86

100,304.96 2,671.27 9,836.86

33,111.00 665,613.23 $

(4) 632,674.83

2,632,93

(4)

Total Federal Financial Assistance NlA = Not Available

$

1,234,213.98 $

1,493,123.05

- 22-

WILKINSON COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 3D. 1998

SCHEDULE "1 n

Notes to the Schedule of Expenditures of Federal Awards
(1~ The amounts shown for the Food Distribution Program represent the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system dUring 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 included in the 1998 National School Lunch Program.
(3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source.
(4) Expenditures on this program were not maintained by fund source.
Major Programs are identified by an asterisk (*) in front of the CFDA number.
The Board did not provide Federal Assistance to any Subrecipient.
The accompanying schedule of expenditures of Federal Awards includes the Federal grant activity of the Wilkinson County Board of Education and is presented on the modified accrual basis of accounting, which is the same basis of accounting used in the presentation of the general purpose financial statements.

See notes to the general purpose financial statements.

- 23-

WILKINSON COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30. 1998

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Quality Basic Education General and Career Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Middle School Incentive Program Special Instructional Assistance In-School Suspension Counselors Grades 4 and 5 Technology Training Local Fair Share Educational Equalization Funding Grant Food Services Other State Programs Ad Valorem Tax Adjustment Alternative Program Apprenticeship Program At-Risk Summer School Program Health Insurance Innovative Programs Mentoring Program Preschool Handicapped Program PSATExams Remedial Summer School Program Lottery Programs Alternative School Program Assistive Technology Instructional Technology
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

$ 3,997,210.00
726,789.00 141,922.00 167,205.00
50,956.00 1,135,170.00
394,387.00 128,746.00 154,018.00 208,374.00
84,055.00 17,354.00 28,842.00 -1,104,008.00 201,947.00
$
49,570.00 68,400.00 44,387.14 10,252.36 132,956.84
4,227.50 8,962.97 25,578.00
49.00 5,152.90

$
42,765.00
4,132.00 5,258.00 53,000.00

309,323.49

28,594.00

TOTAL
3,997,210.00 726,789.00 141,922.00 167,205.00 50,956.00
1,135,170.00
394,387.00 128,746.00 154,018.00 208,374.00
84,055.00 17,354.00 28,842.00 -1,104,008.00 201,947.00 42,765.00 ...
49,570.00 68,400.00 44,387.14 10,252.36 132,956.84
4,227.50 8,962.97 25,578.00
49.00 5,152.90
4,132.00 5,258.00 53,000.00
309,323.49
28,594.00

$ 6,711,097.71 $

414,478.49 $ 7,125,576.20

See notes to the general purpose financial statements. - 24-

WILKINSON COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 1998

SCHEDULE "3"

PROJECT
Wilkinson County Board of Education Acquisition, construction and equipping of laboratory facilities at Wilkinson County High School consisting of one (1) Technology Lab, two (2) Business! Vocational Labs, one (1) English Lab, and one (1) Mathematics Lab; acquisition, construction and equipping of a new 700 fixed-seat auditorium facility; acquisition, construction and equipping of a new classroom wing at the Wilkinson County Primary School; acquiring, constructing, and equipping and adding to, renovating, repairing, improving and equipping instructional and support facilities, existing school buildings and other buildings and facilities useful or desirable in connection therewith; and acquiring any necessary property therefor, both real and personal, and acquiring any necessary or desirable rights in connection therewith

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED
COST (2)

AMOUNT EXPENDED IN CURRENT YEAR (3)

AMOUNT EXPENDED IN PRIOR
YEARS

$

7,500,000,00 $ 6,058,8n,00 $

12,270,00 $

0,00

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

See notes to the general purpose financial statements,

25 -

WILKINSON COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS YEAR ENDED JUNE 30, 1998

SCHEDULE "4"

EXPENDITURES

ALTERNATIVE SCHOOL PROGRAM

INSTRUCTIONAL TECHNOLOGY

PRE-KINDERGARTEN PROGRAM

Current

Instruction

$

Support Services

Pupil Services

Improvement of Instructional Services

General Administration

Maintenance and Operation of Plant

Student Transportation Services

Other Support Services

Debt Service

4,132.00 $

5,258,00 $
53,000.00

280,209.08 $
28,080.03 3,257.64 164.50 750.00 150.72 3,474.35

TOTAL
289,599.08
28,080.03 3,257.64 164.50 750.00 150.72 3,474.35
53,000.00

Total Expenditures

$

4,132,00 $

58,258.00 $

316,086,32 $

378,476,32

RECAP: Salaries and Benefits Pre-Kindergarten Program Other Expenditures A1temative School Program Instructional Technology Pre-Kindergarten Program

$

298,002.89

4,132.00 58,258.00 18,083.43

$

378,476,32

See notes to the general purpose financial statements.

-26-

WILKINSON COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30. 1998

SCHEDULE "5"

Minimum Expenditure Requirements (Total Allotment) Expenditures on Combined Program Basis
Salaries Operations
Less: Expenditures for Media Center Programs in Excess of Total Media Allotment
Expenditures per Audit
Amount of Underexpenditure for Total Allotment

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$ 5,033,126.00 $

1:.:3;,:.,J7,~60:.:.7..:.:.0:.:..0

$ 5,463,620.28 447,532.85 $
$ 5,911,153.13

4.:. ,:1.:.13,'-=.47:. . :1. :.,:.5:.:. 5

-44,869.39 $ 5,866,283.74

$

0.00 $=====.,;O;;,;;'O~O

See notes to the general purpose financial statements. - 27 -

WILKINSON COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM
GENERAL FUND QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30. 1998

GENERAL AND CAREER EDUCATION PROGRAMS Kindergarten (") ... . Grades 1 - 3 (") Sub-Total - K-3 Grades 4 5 (*) Grades 6 8 (*) Grades 9 12 (") High School Laboratories (*) Vocational Education Laboratories (*) Total General and career Education Programs
SPECIAL EDUCATION PROGRAMS Regular Programs Category II (*) Category III (*) Category IV (*) Category V (*) Sub-Total - Regular Category VI (Gifted) (") Total Special Education Programs
REMEDIAL EDUCATION PROGRAM (*) Total Fourteen Weighted Pr:ograms
MEDIA CENTER PROGRAMS Salaries Operations Total Media Center Programs
Total Fourteen Weighted and Media center Programs

ALLOTMENTS FROM DEPARTMENT OF EDUCATION

REQUIRED

ORIGINAL ...!2.... ORIGINAL

MID-TERM

$

388,495.00

$

349,645.50 $

0.00

1,133,954.00

1,020,558.60

$ 1,522,449.00 90 $ 1,370,204.10 $

0.00

517,186.00 90

465,467.40

912,226.00 90

821,003.40

490,652.00 90

441,586.80

329,370.00 90

296,433.00

225,327.00 90

202,794.30

$ 3,997.210.00

$ 3,597,489.00 $

0.00

$

694,584.00

$

625,125.60 $

0.00

$

694,584.00 90 $

625,125.60 $

0.00

32.205.00 90

28,984.50

$

726,789.00

$

654,110.10 $

0.00

$

141,922.00 90 $

127,729.80 $

0.00

$ 4,865,921.00

$ 4,379,328.90 $

0.00

$

136,501.00 90 $

122,850.90 $

0.00

30,704.00 90

27,633.60

$

167,205.00

$

150,484.50 $

0.00

$ 5,033,126.00

$ 4,529,813.40 $

0.00

STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Developmont
Total Staff Development Programs (") Identifies Fourteen Weighted Programs. See notes to the general purpose financial statements.

$

14,783.00

$

14,783.00 $

0.00

36,173.00

36,173.00

0.00

$

50.956.00 100 $

50,956.00 $

0.00

- 28

SCHEDULE "6"

TOTAL REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$

349,645.50 $

406,135.06 $

9,325.89 $

415,460.95

1,020,558.60

1,124,945.27

41,110.44

1,166,055.71

$ 1,370,204.10 $ 1,531,080.33 $

50,436.33 $ 1,581,516.66 $

0.00

465,467.40

548,059.10

32,275.09

580,334.19

0.00

821,003.40

884,783.01

61,643.73

946,426.74

0.00

441,586.80

587,828.68

204,257.88

792,086.56

0.00

296,433.00

366,246.58

3,994.00

370,240.58

0.00

202,794.30

273,649.32

27,656.07

301,305.39

0.00

$ 3,597,489.00 $ 4,191,647.02 $

380,263.10 $ 4,571,910.12

$

625,125.60

$

319,481.64 $ 426,631.05 42,972.88
5,099.57

3,257.17 $ 28,347.83
529.82 359.47

322,738.81 454,978.88
43,502.70 5,459.04

$

625,125.60 $

794,185.14 $

32,494.29 $

826,679.43

0.00

28,984.50

37,204.28

714.16

37,918.44

0.00

$

654,110.10 $

831,389.42 $

33,208.45 $

864,597.87

$

127,729.80 $

262,570.75 $

0.00 $

262,570.75

0.00

$ 4,379,328.90 $ 5,285,607.19 . $

413,471.55 $ 5,699,078.74

$

122,850.90 $

178,013.09

$

178,013.09

0.00

27,633.60

$

34,061.30

34,061.30

0.00

$

150,484.50 $

178,013.09 $

34,061.30 $

212,074.39

$ 4,529,813.40 $ 5,463,620.28 $

447,532.85 $ 5,911,153.13 $

0.00

$

14,783.00

36,173.00

$ _....5-.0,.956;;,;;,j,ij.0.0.

$

32,365.58 $

32,365.58

23,693.n

23,693.n

$

56,059.35 $

56,059.35 $

0.0...0.

- 29 -

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

CLAUDE L. VICKERS
STATE AUDITOR
(404) 656-2174

DEPARTMENT oF A uniTs AND AccoUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 19, 1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe Wilkinson 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 fmancial statements of Wilkinson County Board of Education as of and for the year

ended June 30, 1998, and have issued our report thereon dated February 19, 1999. 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 generally accepted auditing standards and the standards

applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General

ofthe United States.



We were unable to examine sufficient audit evidence regarding year 2000 disclosures as required by
Governmental Accounting Standards Board Technical Bulletin 98-1, Disclosures About Year 2000 Issues.
This bulletin requires disclosure of certain matters regarding the year 2000 issue in order for financial statements to be prepared in conformity with generally accepted accounting principles.

Compliance

As part of obtaining reasonable assurance about whether Wilkinson County Board ofEducation's financial statements are free ofmaterial misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and ~ts, 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 that are required to be reported under Government Auditing Standards.

98YB-40

Internal Control Over Financial Reporting
In planning and performing our audit, we considered Wilkinson County Board ofEducation'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 certain matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in our judgement, could adversely affect Wilkinson County Board of Education's ability to record, process, summarize and report financial data consistent with assertions ofmanagement in the financial statements. Reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs as items FS-7581-98-01 and FS-7581-98-02.
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 ofperforming 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, all of the reportable conditions described above, are considered to be material weaknesses.
This report is intended for the information ofmanagement, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
CLV:jb 98YB-40

v CLAUDE L. ICKERS
STATE AUDilOR
(404) 656-2174

DEPARTMENT OF AUDITS AND AccoUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 19, 1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe Wilkinson County Board ofEducation
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIR.CULARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of Wilkinson County Board of Education with the types of compliance requirements described in the U.S. Office ofManagement and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 1998. Wilkinson County Board ofEducation's major Federal programs are identified in 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 Wilkinson County Board of Education's management. Our responsibility is to express an opinion on Wilkinson County Board of Education's compliance based on our audit.
We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to fmancial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and OMB Circular A-133,Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types 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 Wilkinson 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 Wilkinson County Board of Education's compliance with those requirements.

98SA-10

In our opinion, the Wilkinson 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, 1998.
Internal Control Over Compliance
The management of Wilkinson County Board ofEducation 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 Wilkinson 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 ofexpressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133.
Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level ofrisk that noncompliance with applicable requirements of laws, 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. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
Respectfully submitted,
d..i<_~
Claude L. Vickers State Auditor
CLV:jb 98SA-10

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

WILKINSON COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1998

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

7581-93-01 7581-93-03 FS-7581-97-01 FS-7581-97-02

Further Action Not Warranted Further Action Not Warranted Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

CASH AND CASH EQUNALENTS GENERAL LEDGER Inadequate Separation of Duties Finding Control Number: FS-7581-97-01

Due to current budgetary constraints, the Board is unable to hire the additional staff necessary to clear this fmding. The Board feels it has provided for the most appropriate assignment of duties with the number ofpersonnel available to perform the accounting functions. With stafflimitations, this finding cannot be totally resolved.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7581-97-02

Due to current staffing limitations and budgetary considerations, the Board is not able to pursue the recording of general fixed assets on the financial statements. This would require hiring additional personnel, and this is not an option at this point in time.

SECTION IV FINDINGS AND QUESTIONED COSTS

WILKINSON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, I998

I SUMMARY OF AUDITOR'S RESULTS

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

Cash and Cash Equivalents General Fixed Assets

General Ledger

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

3. Noncompliance Material to the Financial Statements The audit ofthe Wilkinson County Board of Education disclosed no instances of noncompliance that were deemed to be material to the financial statements.

4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Wilkinson 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 Wilkinson County Board of Education's report on compliance with requirements applicable to major programs was unqualified.

6. Audit Findings Required to be Reported by Section .5IO(a) ofOMB Circular A-I33 The Wilkinson County Board of Education's audit did not disclose audit findings required to be reported by section .5IO(a) ofOMB Circular A-I33.

7. Major Programs Federal awards audited as major programs are as follows: I0.553 Food and Nutrition Program- Food Services- School Breakfast Program I0.555 Food and Nutrition Program- Food Services- National School Lunch Program

8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.

9. Low Risk Auditee The Wilkinson County Board of Education was not audited as a risk auditee as defined by Section .530 ofOMB Circular A-133.

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WILKINSON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1998
IT FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS GENERAL LEDGER Inadequate Control Procedures Reportable Condition - Material Weakness Repeated from Prior Year Finding Control Number: FS-7581-98-01
A review ofthe Board's internal control policies and procedures noted deficiencies in providing for adequate internal control over the following functions and related procedures:
1) The bank reconciliation function was not separated from the general ledger and check preparation function. In addition, the bank reconciliations were not reviewed by an individual independent of cash operations.
2) The deposit preparation function was not separated from the general ledger function. In addition, the cash receipt, cash counting and cash deposit functions for School Food Services were not separated.
3) Journal entries were not reviewed and approved by someone independent of the general ledger maintenance function.
These conditions were a result of management's decision to limit the number of administrative staff made responsible for accounting functions. The Board should review the accounting procedures in place, design procedures which would enhance segregation ofduties relative to the above control categories and implement those procedures to strengthen the internal control over the accounting functions.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group ~eportable Condition - Material Weakness Repeated from Prior Year Finding Control Number: FS-7581-98-02
The Wilkinson County Board ofEducation failed to maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition was a result ofmanagement's decision not to maintain the Account Group and results in the general purpose financial statements ofthe Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board 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 Board and should include, but
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WILKINSON COUNTY BOARD OF EDUCATION . SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 1998 II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated from Prior Year Finding Control Number: FS-7581-98-02 may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group. ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.
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