Wilkinson County Board of Education, Irwinton, Georgia, annual financial report for the fiscal year ended June 30, 2015 (including independent auditor's reports) [June 30, 2015]

WILKINSON COUNTY BOARD OF EDUCATION
IRWINTON, GEORGIA
ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2015
(Including Independent Auditor's Reports)

WILKINSON COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

Page

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S REPORT

REQUIRED SUPPLEMENTARY INFORMATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

i

EXHIBITS

BASIC FINANCIAL STATEMENTS

DISTRICT-WIDE FINANCIAL STATEMENTS

A

STATEMENT OF NET POSITION

1

B

STATEMENT OF ACTIVITIES

2

FUND FINANCIAL STATEMENTS

C

BALANCE SHEET

GOVERNMENTAL FUNDS

4

D

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET POSITION

5

E

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES

GOVERNMENTAL FUNDS

6

F

RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT

OF REVENUES, EXPENDITURES AND CHANGES IN FUND

BALANCES TO THE STATEMENT OF ACTIVITIES

7

G

STATEMENT OF FIDUCIARY NET POSITION

FIDUCIARY FUNDS

8

H NOTES TO THE BASIC FINANCIAL STATEMENTS

9

SCHEDULES

REQUIRED SUPPLEMENTARY INFORMATION

1 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY

TEACHERS' RETIREMENT SYSTEM OF GEORGIA

33

2 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY

EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA

34

3 SCHEDULE OF CONTRIBUTIONS TEACHERS' RETIREMENT SYSTEM OF GEORGIA

36

4 SCHEDULE OF CONTRIBUTIONS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA 38

5 NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION

40

6 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES - BUDGET AND ACTUAL

GENERAL FUND

41

(This page left intentionally blank)

WILKINSON COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
SECTION I FINANCIAL SCHEDULES SUPPLEMENTARY INFORMATION 7 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 8 SCHEDULE OF STATE REVENUE 9 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 10 ALLOTMENTS AND EXPENDITURES GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) BY PROGRAM

Page
42 43 44 45

SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133

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

SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

(This page left intentionally blank)

SECTION I FINANCIAL

(This page left intentionally blank)

Greg S. Griffin
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
October 19, 2016

Honorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Wilkinson County Board of Education
INDEPENDENT AUDITOR'S REPORT
Ladies and Gentlemen:
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Wilkinson County Board of Education, as of and for the year ended June 30, 2015, and the related notes to the financial statements (Exhibits A through H), which collectively comprise the Board's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States 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 involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
2015ARL-11

(This page left intentionally blank)

effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Opinions
In our opinion, the basic financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the Wilkinson County Board of Education, as of June 30, 2015, and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Emphasis of Matter
As described in Note 2 to the financial statements, in 2015, the Wilkinson County Board of Education adopted new accounting guidance, Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions an amendment of GASB Statement No. 27, and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date an amendment of GASB Statement No. 68. The School District restated beginning Net Position for the cumulative effect of these accounting changes. Our opinion is not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis, the Schedules of Proportionate Share of the Net Pension Liability, Schedules of Contributions to Retirement Systems, the Notes to the Required Supplementary Information and the Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual as presented on pages i through xii and pages 33 through 41 respectively, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
2015ARL-11

(This page left intentionally blank)

Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Wilkinson County Board of Education's basic financial statements. The accompanying supplementary information, consisting of Schedules 7 through 10, is presented for the purposes of additional analysis and is not a required part of the basic financial statements. The Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is not a required part of the basic financial statements.
The accompanying supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated October 19, 2016, on our consideration of the Wilkinson County Board of Education's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Wilkinson County Board of Education's internal control over financial reporting and compliance.
A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,

GSG:er 2015ARL-11

Greg S. Griffin State Auditor

(This page left intentionally blank)

WILKINSON COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015
INTRODUCTION
The District's financial statements for the fiscal year ended June 30, 2015 includes a series of basic financial statements that report financial information for the District as a whole, its funds, and its fiduciary responsibilities. The Statement of Net Position and the Statement of Activities provide financial information about all of the District's activities and present both a short-term and long-term view of the District's finances on a global basis. The fund financial statements provide information about all of the District's funds. Information about these funds, such as the District's General Fund, is important in its own right, but will also give insight into the District's overall soundness as reported in the Statement of Net Position and the Statement of Activities.
In fiscal year 2015, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions and GASB Statement No. 71, Pension Transition, for contributions made subsequent to the measurement date and amendment of GASB No. 68.
The adoption of these statements had a significant impact on the School District's District-wide financial statements, and in many cases distorts comparability of fiscal year 2015 financial statements with those of the prior year. Prior year financial statements, as presented herein, have not been restated for implementation of GASB No. 68 and No. 71. The District's Governmental Fund Financial Statements were not affected by implementation of GASB No. 68 and No. 71.
FINANCIAL HIGHLIGHTS
Key financial highlights for fiscal year 2015 are as follows:
On the District-wide financial statements:
The District's Net Position at June 30, 2015 was $16.8 million. Net Position reflects the difference between all assets and deferred outflows of resources of the District (including capital assets, net of depreciation) and all liabilities, both short-term and long-term, and deferred inflows of resources. The Net Position at June 30, 2015 of $16.8 million represented a decrease of $12.8 million when compared to the prior year. This large decrease in Net Position was due to implementation of GASB No. 68 and GASB No. 71.
The School District had $19.4 million in expenses relating to governmental activities; over $11.2 million of these expenses were offset by program specific charges for services, grants and contributions. However, general revenues (primarily property and sales taxes) of almost $9.1 million were adequate to provide for these programs.
As stated above, general revenues accounted for almost $9.1 million or about 45% of all revenues totaling almost $20.3 million. Program specific revenues in the form of charges for services, grants, and contributions accounted for the balance of these revenues. (Percentages in table below have been rounded to one decimal place.)
i

WILKINSON COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015

Source of Revenues
Program Revenues
55.4%

General Revenue - Property Taxes
35.5%

General Revenue - Sales Taxes 8.1%
General Revenue - All Other 1.6%

On the fund financial statements:
Among major funds, the General Fund had $17.8 million in revenues and almost $17.7 million in expenditures. The General Fund balance of almost $1.9 million at June 30, 2015 increased about $144 thousand from the prior year. It should be noted the District's Fiscal Year 2015 budget included amounts for higher health insurance costs and other contingencies that did not actually occur.
OVERVIEW OF THE FINANCIAL STATEMENTS
These financial statements consists of three parts; management's discussion and analysis (this section), the basic financial statements including notes to the financial statements and required supplementary information. The basic financial statements include two levels of statements that present different views of the School District. These include the District-wide and fund financial statements.
The District-wide financial statements include the `Statement of Net Position' and `Statement of Activities'. These statements provide information about the activities of the School District presenting both short-term and long-term information about the School District's overall financial status.
The fund financial statements focus on individual parts of the School District, reporting the School District's operation in more detail. The `Governmental Funds' statements disclose how basic services are financed in the short-term as well as what remains for future spending. The `Fiduciary Funds' statements provide information about the financial relationships in which the School District acts solely as a trustee or agent for the benefit of others. In the case of the Wilkinson County School District, the General Fund, Capital Projects Fund, and Debt Service Fund are all considered to be major funds. The District has no funds reported as nonmajor funds as defined by generally accepted accounting principles.
The financial statements also include notes that explain some of the information in the statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and supports the financial statements. Additionally, other

ii

WILKINSON COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015
supplementary information (not required) is also presented that further supplements understanding of the financial statements.
District-wide Statements
Since Wilkinson County School District has no operations that have been classified as "Business Type Activities", the District-wide financial statements are basically a consolidation of all of the District's operating funds into one column called governmental activities. In reviewing the District-wide financial statements, a reader might ask the question, are we in a better financial position now than last year? The `Statement of Net Position' and the `Statement of Activities' provides the basis for answering this question. These financial statements include all District's assets and liabilities and uses the accrual basis of accounting similar to the accounting used by most private-sector companies. This basis of accounting takes into account all of the current year's revenues and expenses regardless of when cash is received or paid.
These two statements report the School District's Net Position and any changes in Net Position. The change in Net Position is important because it tells the reader that, for the School District as a whole, the financial position of the School District has improved or diminished. The causes of this change may be the results of many factors, including those not under the School District's control, such as the property tax base, facility conditions, required educational programs, student-teacher ratios, and other factors.
When analyzing District-wide financial statements, it is important to remember these statements are prepared using an economic resources measurement focus (accrual accounting) and involve the following steps to format the Statement of Net Position:
Capitalize current outlays for capital assets Depreciate capital assets Report long-term debt, including pension obligations, as a liability Calculate revenue and expense using the economic resources measurement focus and the
accrual basis of accounting Allocate Net Position as follows:
o Net Investment in capital assets o Restricted Net Position is amounts with constraints placed on the use by external
sources such as creditors, grantors, contributors or laws and regulations. o Unrestricted for no specific use
iii

WILKINSON COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015
Fund Financial Statements
The School District uses many funds or sub-funds to account for a multitude of financial transactions during the fiscal year. The fund financial statements presented in this report provide detail information about the School District's significant or major funds. As discussed previously, the District has no nonmajor funds as defined by generally accepted accounting principles.
The District has two kinds of funds as discussed below:
Governmental Funds Most of the School District's activities are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end available for spending in future periods. These funds are reported using the modified accrual method of accounting which measures cash and all other financial assets that can be readily be converted to cash. The governmental fund statements provide a detailed short-term view of the School District's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance educational programs. The differences between government activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds are reconciled in the financial statements.
Fiduciary Funds The School District is the trustee, or fiduciary, for assets that belong to clubs, organizations and others within the principals' accounts. The School District is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. The School District excludes these activities from the District-wide financial statements because it cannot use these assets to finance its operations.
FINANCIAL ANALYSIS OF THE SCHOOL DISTRICT AS A WHOLE
Net Position, which is the difference between total assets and deferred outflows of resources, and total liabilities and deferred inflows of resources, is one indicator of the financial condition of the District. When revenues exceed expenses, the result is an increase in Net Position. When expenses exceed revenues, the result is a decrease in Net Position. The relationship between revenues and expenses can be thought of as the District's operating results. The District's Net Position, as measured in the Statement of Net Position is one way to measure the District's financial health, or financial position. Over time, increases or decreases in the District's Net Position- as measured in the Statement of Activities- are one indicator of whether its financial health is improving or deteriorating. However, the District's goal and mission is to provide success for each child's education, not to generate profits as private corporations do. For this reason, many other nonfinancial factors should be considered in assessing the overall health of the District.
iv

WILKINSON COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015

In the case of the Wilkinson County School District, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by about $16.8 million at June 30, 2015. To better understand the District's actual financial position and ability to deliver services in future periods, it is necessary to review the various components of the Net Position category. For example, of the $16.8 million of Net Position, $4.6 million was restricted for continuation of various State and Federal programs, ongoing capital projects and debt service. Accordingly, these funds were not available to meet the District's ongoing obligations to citizens and creditors.

In addition, the District had over $23.8 million (net of related debt) invested in capital assets (e.g., land, buildings, and equipment). The District uses these capital assets to provide educational services to students within geographic boundaries served by the District. Because of the very nature and ongoing use of the assets being reported in this component of Net Position, it must be recognized that this portion of the Net Position is not available for future spending.

Because of the restrictions on Net Position as discussed above and because of implementation of GASB No. 68 and GASB No. 71. The District had a deficit of almost $11.7 million at June 30, 2015. However, the District's overall Net Position can also be viewed in the following manner:

Pension Related Net Position Non Pension Related Net Position

$ -13,278,995 30,048,026

Net Position, June 30, 2015

$

16,769,031

The above analysis reflects, despite pension obligations, the District's Net Position is a positive $16.8 million and management believes the District's financial position is sound.

v

WILKINSON COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015

Table 1 provides a summary of the School District's Net Position for this fiscal year as compared to the prior fiscal year. GASB No. 68 was implemented in fiscal year 2015. Prior year amounts were not restated to reflect the implementation of GASB No. 68 and GASB No. 71.

Table 1 Net Position

Governmental Activities

Fiscal

Fiscal

Year 2015

Year 2014

Assets Current and Other Assets Capital Assets, Net

$

9,112,595 $

7,557,817

39,714,700

40,773,615

Total Assets

48,827,295

48,331,432

Deferred Outflows of Resources

1,377,109

0

Total Assets and Deferred Outflows of Resources

50,204,404

48,331,432

Liabilities Current and Other Liabilities Long-Term Liabilities

13,164,545 16,500,000

2,249,782 16,500,000

Total Liabilities

29,664,545

18,749,782

Deferred Inflows of Resources

3,770,828

0

Total Liabilities and Deferred Inflows of Resources

33,435,373

18,749,782

Net Position Net Investment in Capital Assets Restricted Unrestricted (Deficit)

23,848,264 4,595,178
-11,674,411

24,907,179 3,266,384 1,408,087

Total Net Position

$ 16,769,031 $ 29,581,650

vi

WILKINSON COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015

Total Net Position decreased $12.8 million in fiscal year 2015 from the prior year, primarily due to the implementation of GASB No. 68 and GASB No. 71, accounting standards for pensions. In connection with this accounting change, management presents the following additional information:

Total Unrestricted Net Position (deficit)

$

Less Unrestricted Deficit in Net Position resulting

from recognition of Net Pension obligation

-11,674,411 13,278,995

Unrestricted Net Position, exclusive of the Net

Pension Liability effect

$

1,604,584

vii

WILKINSON COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015

Table 2 Change in Net Assets

Revenues Program Revenues: Charges for Services and Sales Operating Grants and Contributions Capital Grants and Contributions

Governmental Activities

Fiscal Year

Fiscal Year

2015

2014

$

212,101 $

183,034

10,201,336

10,314,731

807,644

1,491,991

Total Program Revenues

11,221,081

11,989,756

General Revenues: Taxes Property Taxes Sales Taxes Investment Earnings Miscellaneous

7,194,857 1,638,675
20,686 197,329

7,001,330 1,866,428
5,675 152,862

Total General Revenues

9,051,547

9,026,295

Total Revenues

20,272,628

21,016,051

Program Expenses: Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Operations of Non-Instructional Services Food Services Interest on Short-Term and Long-term Debt

10,265,894
635,582 1,643,708
234,635 359,225 1,234,686
96,914 1,947,074 1,115,737
81,523
927,954 883,567

11,419,143
627,618 1,295,008
227,641 484,972 1,275,176
95,704 2,076,081 1,240,361
94,548
1,005,272 886,793

Total Expenses

19,426,499

20,728,317

Increase in Net Position

$

846,129 $

287,734

viii

WILKINSON COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015

Table 2 provides a summary of the School District's Net Position for this fiscal year as compared to the prior fiscal year. GASB No. 68 and GASB No. 71 were implemented in fiscal year 2015. Prior year amounts were not restated to reflect the implementation of GASB No. 68.
Cost of Providing Services

The Statement of Activities shows the cost of program services and the charges for services and grants offsetting these services. Table 3 shows, for governmental activities, the total cost of services and the net cost of services. Net cost of services can be defined as the total cost less fees generated by the activities and intergovernmental revenue provided for specific programs. The net cost reflects the financial burden on the School District's taxpayers by each activity as compared to the prior fiscal year.

GASB No. 68 and GASB No. 71 were implemented in fiscal year 2015. Prior year amounts were not restated to reflect the implementation of GASB No. 68 and GASB No. 71.

Table 3 Governmental Activities

Total Cost of Services

Fiscal

Fiscal

Year 2015

Year 2014

Net Cost of Services

Fiscal

Fiscal

Year 2015

Year 2014

Instruction Support Services:
Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Operations of Non-Instructional Services: Food Services Interest on Short-Term and Long-Term Debt

$ 10,265,894 $ 11,419,143 $ 3,656,890 $

635,582 1,643,708
234,635 359,225 1,234,686
96,914 1,947,074 1,115,737
81,523

627,618 1,295,008
227,641 484,972 1,275,176
95,704 2,076,081 1,240,361
94,548

556,481 607,171
34,311 -84,482 671,675 96,914 1,502,872 1,053,947
6,706

927,954 883,567

1,005,272 886,793

27,010 75,922

3,710,393
544,886 561,373
28,788 40,875 723,397 93,336 1,634,646 1,183,080 10,000
117,204 90,583

Total Expenses

$ 19,426,499 $ 20,728,317 $ 8,205,417 $

8,738,561

Actual expenses decreased about $1.3 million from the prior year while the net costs of providing services only decreased about $533,000. The modest drop in the costs of providing services (as compared to the drop in actual expenses) occurred primarily because program revenues decreased by about $768,675 from the prior year. This decrease in program revenues was a result of the District receiving no E-rate funding for capital outlay purposes in fiscal year 2015 versus receiving $696,000 for that purposes in fiscal year 2014.

ix

WILKINSON COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015
FINANCIAL ANALYSIS OF THE SCHOOL DISTRICT'S FUNDS
Information about the School District's governmental funds is presented starting on Exhibit "C" of this report. Governmental funds are accounted for using the modified accrual basis of accounting. The governmental funds had total revenues of $20.2 million and total expenditures of almost $18.8 million in fiscal year 2015. Total governmental fund balances of $6.2 million at June 30, 2015, increased almost $1.5 million from the prior year. This increase in fund balance resulted primarily because Capital Projects revenues exceeded expenditures by about $1.4 million during fiscal year 2015, largely because sales tax revenues were greater than current year debt service requirements and other amounts expended in the Capital Projects Fund during the fiscal year. The District's intent is to increase the fund balance in the Debt Service Fund to be sufficient to make debt service payments when the principal begins maturing in fiscal year 2021 and beyond on the District's bond debt.
General Fund Budget Highlights
The School District's budget is prepared according to Georgia Law. The most significant budgeted fund is the General Fund. During the course of fiscal year 2015, the School District amended its general fund budget as needed.
The School District budget is adopted at the aggregate level and maintained at the program, function, object, and site levels to facilitate budgetary control. The budgeting systems are designed to control the total budget, but provide flexibility to meet the ongoing programmatic needs. The budgeting systems are also designed to control total site budgets but provide flexibility for site management as well.
For the General Fund, the final actual revenues of $17.8 million exceeded the final budgeted revenues by $3.6 million. This variance was primarily due to actual revenues for State funds exceeding the final budget by almost $0.6 million and Federal funds exceeding the final budgeted amount by $2.5 million.
The General Fund's final actual expenditures of almost $17.7 million were greater than the final budget amount of $16.4 million by roughly $1.2 million. Additionally, the fact that both revenues and expenditures exceeded the final budget was due to the fact the District did not include a significant number of funds reported in the General Fund as a part of its annual operating budget.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
At fiscal year ended June 30, 2015, the School District had $39.7 million invested in capital assets, net of accumulated depreciation, all in governmental activities. These assets are made up of a broad range of items including buildings; land; land improvements; and food service, transportation and maintenance equipment. Table 4 reflects a summary of these balances, net of accumulated depreciation, as compared to the prior fiscal year.
x

WILKINSON COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015

Table 4 Capital Assets at June 30
(Net of Depreciation)

Governmental Activities

Fiscal Year 2015

Fiscal Year 2014

Land Land Improvements Buildings and Improvements Equipment

$

438,939

$

438,939

324,692

390,025

37,362,519

38,104,385

1,588,550

1,840,266

Total

$

39,714,700

$

40,773,615

Additional information about the School District's Capital Assets can be found in the Notes to the Basic Financial Statements.

Long-Term Debt

At June 30, 2015, the School District had $16.5 million in total debt outstanding which consisted of entirely of general obligation debt. Table 5 summarizes the School District's debt as compared to the prior fiscal year.

Table 5 Debt at June 30

Governmental Activities

Fiscal Year 2015

Fiscal Year 2014

General Obligation Bonds

$

16,500,000

$

16,500,000

Additional information about the School District's debt can be found in the Notes to the Basic Financial Statements.
FACTORS BEARING ON THE DISTRICT'S FUTURE
Currently known circumstances that are expected to have a significant effect on financial position or results of operations in future years are as follows:
The School District's operating millage for fiscal year 2015 was 19.66 mills and was unchanged from the prior year. The millage rate produced about $362,000 per mill or about $200,000 less in property tax revenues as compared to the prior year. However, State Revenues increased $619,000 in fiscal year 2015 from the prior year to offset this loss in revenue.
The general economy continues to improve and the District anticipates some growth in State Funding for the near term. The School District continues to anticipate little or no growth in regard to student population in the foreseeable future.

xi

WILKINSON COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 Management believes the District is in sound financial position. The General Fund had an unassigned fund balance of almost $1.5 million at June 30, 2015, which is a modest increase from the prior year. The Board anticipates significant financial challenges going forward due to continuing higher health insurance and benefits cost for employees. In spite of these challenges, the School District will continue to be a good steward of tax dollars while providing a quality educational opportunity. CONTACTING THE SCHOOL DISTRICT'S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens taxpayers, investors and creditors with a general overview of the School District's finances and to show the School District's accountability for the money it receives. If you have questions about this report or need additional financial information, contact Mrs. Kathy Jackson Finance Director, Wilkinson County School District, P.O Box 206, West Main Street Irwinton, Georgia 31042. You may also email your questions to Mrs. Jackson at kathy.jackson@wilkinson.k12.ga.us.
xii

WILKINSON COUNTY BOARD OF EDUCATION

(This page left intentionally blank)

WILKINSON COUNTY BOARD OF EDUCATION STATEMENT OF NET POSITION JUNE 30, 2015
ASSETS
Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Other Inventories Prepaid Items Capital Assets, Non-Depreciable Capital Assets, Depreciable (Net of Accumulated Depreciation)
Total Assets
DEFERRED OUTFLOWS OF RESOURCES
Related to Defined Benefit Pension Plan
LIABILITIES
Accounts Payable Interest Payable Salaries and Benefits Payable Payroll Liabilities Net Pension Liability Long-Term Liabilities
Due in More Than One Year
Total Liabilities
DEFERRED INFLOWS OF RESOURCES
Related to Defined Benefit Pension Plan
NET POSITION
Net Investment in Capital Assets Restricted for
Continuation of Federal Programs Debt Service Capital Projects Unrestricted (Deficit)
Total Net Position

EXHIBIT "A"

GOVERNMENTAL ACTIVITIES

$

133,547.63

6,097,357.40

1,027,417.56 877,562.00 812,930.48 53,358.70 6,714.36 103,707.00 438,939.00
39,275,761.00

48,827,295.13

1,377,109.00

69,090.61 368,152.92 1,809,769.40
32,255.82 10,885,276.00
16,500,000.00
29,664,544.75

3,770,828.00

23,848,263.80
226,327.17 1,277,323.15 3,091,527.95 -11,674,410.69

$

16,769,031.38

The notes to the basic financial statements are an integral part of this statement. - 1 -

WILKINSON COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2015

GOVERNMENTAL ACTIVITIES
Instruction Support Services
Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Operations of Non-Instructional Services School Nutrition Program Interest on Short-Term and Long-Term Debt
Total Governmental Activities
General Revenues Taxes Property Taxes For Maintenance and Operations Sales Taxes Special Purpose Local Option Sales Tax For Capital Projects Other Sales Tax Investment Earnings Miscellaneous
Total General Revenues
Change in Net Position
Net Position - Beginning of Year, Restated
Net Position - End of Year

EXPENSES

CHARGES FOR SERVICES

$ 10,265,893.70 $ 145,789.12

635,581.59 1,643,708.21
234,634.91 359,225.18 1,234,685.64
96,914.10 1,947,073.77 1,115,736.92
81,522.95

3,625.00 6,526.12

927,953.87 883,567.00

56,160.37

$ 19,426,497.84 $ 212,100.61

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

EXHIBIT "B"

PROGRAM REVENUES OPERATING GRANTS AND
CONTRIBUTIONS

CAPITAL GRANTS AND CONTRIBUTIONS

NET (EXPENSES) REVENUES
AND CHANGES IN NET POSITION

$ 6,463,214.93
79,100.29 1,036,537.11
200,324.00 443,707.51 563,011.00
440,577.16 55,263.48 74,816.56
844,783.56 $
$ 10,201,335.60 $

$
807,644.54 807,644.54

-3,656,889.65
-556,481.30 -607,171.10
-34,310.91 84,482.33 -671,674.64 -96,914.10 -1,502,871.61 -1,053,947.32 -6,706.39
-27,009.94 -75,922.46
-8,205,417.09

7,194,857.38
1,602,827.06 35,848.13 20,685.56
197,328.65 9,051,546.78
846,129.69 15,922,901.69
$ 16,769,031.38

- 3 -

WILKINSON COUNTY BOARD OF EDUCATION BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30, 2015

EXHIBIT "C"

ASSETS
Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Other Inventories Prepaid Items

GENERAL FUND

DISTRICT-WIDE CAPITAL PROJECTS FUND

DEBT SERVICE
FUND

TOTAL

$ 174,165.42

$

3.62 $ 174,169.04

1,809,488.56 $ 3,005,216.81

1,282,652.03

6,097,357.40

900,485.01 877,562.00 450,110.06
53,358.70 6,714.36
103,707.00

126,932.55

1,027,417.56 877,562.00 450,110.06 53,358.70 6,714.36 103,707.00

Total Assets
LIABILITIES
Cash Overdraft Accounts Payable Salaries and Benefits Payable Payroll Withholdings Payable
Total Liabilities
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - Property Taxes
FUND BALANCES
Nonspendable Restricted Committed Unassigned
Total Fund Balances

$ 4,375,591.11 $ 3,132,149.36 $ 1,282,655.65 $ 8,790,396.12

$

$

69,090.61

1,809,769.40

32,255.82

1,911,115.83

40,621.41 40,621.41

$

40,621.41

69,090.61

1,809,769.40

32,255.82

1,951,737.24

608,781.88

608,781.88

110,421.36 219,612.81
36,113.36 1,489,545.87
1,855,693.40

3,091,527.95 $ 1,282,655.65

3,091,527.95

1,282,655.65

110,421.36 4,593,796.41
36,113.36 1,489,545.87
6,229,877.00

Total Liabilities, Deferred Inflows of Resources and Fund Balances

$ 4,375,591.11 $ 3,132,149.36 $ 1,282,655.65 $ 8,790,396.12

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

WILKINSON COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET POSITION JUNE 30, 2015

EXHIBIT "D"

Total Fund Balances - Governmental Funds (Exhibit "C")
Amounts reported for Governmental Activities in the Statement of Net Position are different because:
Capital Assets used in Governmental Activities are not financial resources and therefore are not reported as assets in governmental funds. These assets consist of:
Land Land Improvements Buildings and Improvements Machinery and Equipment Accumulated Depreciation
Total Capital Assets
Some liabilities, including net pension obligations, are not due and payable in the current period and, therefore, are not reported in the funds.
Net Pension Liability
Qualified School Construction Bond Interest Subsidy recorded as revenue in the Statement of Activities that do not provide current financial resources are not recorded as revenue on the Governmental Statements.
Deferred Outflows and Inflows of Resources related to pensions are applicable to future periods and, therefore, are not reported in the governmental funds.
Taxes that are not available to pay for current period expenditures are unavailable revenue in the governmental funds.
Property Taxes
Long-Term Liabilities, including Bonds Payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. These consist of:
Bonds Payable
Some liabilities reported in the Statement of Activities do not require the use of current financial resources, and therefore are not reported as liabilities in the Governmental Fund Statements.
Accrued Interest on Long-Term Debt

$ 6,229,877.00

$

438,939.00

1,474,949.00

44,291,854.00

4,643,476.00

-11,134,518.00

39,714,700.00

-10,885,276.00 362,820.42
-2,393,719.00

608,781.88

-16,500,000.00

-368,152.92

Net Position of Governmental Activities (Exhibit "A")

$ 16,769,031.38

The notes to the basic financial statements are an integral part of this statement. - 5 -

WILKINSON COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2015

EXHIBIT "E"

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation
Debt Services Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Transfers In Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning
Fund Balances - Ending

GENERAL FUND

DISTRICT-WIDE CAPITAL PROJECTS FUND

DEBT SERVICE
FUND

TOTAL

$ 7,124,788.95

35,848.13 $ 1,602,827.06

7,543,431.97

2,682,404.63

$

212,100.61

3,644.70

3,615.98

197,328.65

17,799,547.64

1,606,443.04

$
807,644.54 13,424.88

7,124,788.95 1,638,675.19 7,543,431.97 3,490,049.17
212,100.61 20,685.56
197,328.65

821,069.42

20,227,060.10

9,590,384.79
641,528.59 1,679,966.21
225,137.91 334,370.52 1,231,040.00
99,647.10 1,918,221.27
968,693.92 83,664.95
882,803.87

120,983.91
25,436.66 14,894.64 71,495.50

17,655,459.13 144,088.51

232,810.71 1,373,632.33

883,567.00 883,567.00 -62,497.58

9,711,368.70
641,528.59 1,679,966.21
225,137.91 359,807.18 1,245,934.64
99,647.10 1,989,716.77
968,693.92 83,664.95
882,803.87
883,567.00
18,771,836.84
1,455,223.26

144,088.51

-1,345,153.23 -1,345,153.23
28,479.10

1,345,153.23
1,345,153.23 1,282,655.65

1,345,153.23 -1,345,153.23
0.00
1,455,223.26

1,711,604.89

3,063,048.85

0.00

4,774,653.74

$ 1,855,693.40 $ 3,091,527.95 $ 1,282,655.65 $ 6,229,877.00

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

WILKINSON COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2015

EXHIBIT "F"

Total Net Change in Fund Balances - Governmental Funds (Exhibit "E")
Amounts reported for Governmental Activities in the Statement of Activities are different because:
Capital Outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activities, the cost of Capital Assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are:
Capital Outlay Depreciation Expense
Excess of Capital Outlay over Depreciation Expense
Taxes reported in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds.
Some items reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in Governmental Funds. The net adjustments consist of:
Pension Expense
Change in Net Position of Governmental Activities (Exhibit "B")

$ 1,455,223.26

$

50,000.00

-1,108,915.00

-1,058,915.00

70,068.43

379,753.00 $ 846,129.69

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

ASSETS Cash and Cash Equivalents
LIABILITIES Funds Held for Others

WILKINSON COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS JUNE 30, 2015

EXHIBIT "G"
AGENCY FUNDS $ 31,569.49
$ 31,569.49

The notes to the basic financial statements are an integral part of this statement. - 8 -

WILKINSON COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015

EXHIBIT "H"

NOTE 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY
REPORTING ENTITY
The Wilkinson County Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The School District's basic financial statements are collectively comprised of the District-wide financial statements, fund financial statements and notes to the basic financial statements of the Wilkinson County Board of Education.
DISTRICT-WIDE STATEMENTS:
The Statement of Net Position and the Statement of Activities display information about the financial activities of the overall School District, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions.
The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities.
Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the School District related to the administration and support of the School District's programs, such as office and maintenance personnel and accounting) are not allocated to programs.
Program revenues include (a) charges paid by the recipients of goods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
FUND FINANCIAL STATEMENTS:
The fund financial statements provide information about the School District's funds, including fiduciary funds. Eliminations have been made to minimize the double counting of internal activities. Separate statements for each category (governmental and fiduciary) are presented. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column. The School District had no funds reported as nonmajor funds.
The School District reports the following major governmental funds:
General Fund is the School District's primary operating fund. It accounts for and reports all financial resources not accounted for and reported in another fund.
District-wide Capital Projects Fund accounts for and reports financial resources including Education Special Purpose Local Option Sales Tax (ESPLOST) and Bond Proceeds that are restricted, committed or assigned to the expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets.
Debt Service Fund accounts for and reports financial resources that are restricted, committed, or assigned including taxes (sales) legally restricted for the payment of general long-term principal and interest.
- 9 -

WILKINSON COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015

EXHIBIT "H"

The School District reports the following fiduciary fund type:
Agency funds account for assets held by the School District as an agent for various funds, clubs, governments, or individuals.
BASIS OF ACCOUNTING
The basis of accounting determines when transactions are reported on the financial statements. The District-wide governmental and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, sales taxes, grants and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year in which the underlying transaction (sale) takes place. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
The School District uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts.
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The School District considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. The School District considers all intergovernmental revenues to be available if they are collected within 120 days after year-end. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general longterm debt, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities and acquisitions under capital leases are reported as other financing sources.
The School District funds certain programs by a combination of specific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the School District's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues.
RESTATEMENT OF PRIOR YEAR NET POSITION
For fiscal year 2015, the School District made several prior period adjustments due to the adoption of GASB Statement No. 68 and GASB Statement No. 71, as described in "New Accounting Pronouncements" below, which require the restatement of the June 30, 2014, Net Position in Governmental Activities. The result is a decrease in Net Position at July 1, 2014 of $13,658,748.00. This change is in accordance with generally accepted accounting principles.

- 10 -

WILKINSON COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015

EXHIBIT "H"

Net Position, July 1, 2014, as previously reported

$ 29,581,649.69

Prior Period adjustment - Implementation of GASB 68: Net Pension Liability (measurement date) TRS ERS Deferred Outflows - School District's contribution made during fiscal year 2014 TRS ERS

$ -14,523,115.00 -217,738.00
$ 1,056,655.00 25,450.00

-14,740,853.00 1,082,105.00

Net Position, July 1, 2014, as restated

$ 15,922,901.69

NEW ACCOUNTING PRONOUNCEMENTS
In fiscal year 2015, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions. The provisions of this statement establish accounting and financial reporting standards for pensions that are provided to the employees of state and local governmental employers through pension plans that are administered through trusts. The adoption of this statement has a significant impact on the School District's financial statements. As noted above the School District restated beginning Net Position for the cumulative effect of this accounting change.
In fiscal year 2015, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 69, Government Combinations and Disposals of Government Operations. This statement provides specific accounting and financial reporting guidance for combinations in the governmental environment. This statement also requires that disclosures be made by governments about combination arrangements in which they engage and for disposals of government operations. The School District did not have any activities of this type during the fiscal year and the adoption of this statement does not have a significant impact on the School District's financial statements.
In fiscal year 2015, the School District adopted Governmental Accounting Standards Board (GASB) Statement 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - an amendment of GASB No. 68. The objective of this statement is to improve accounting and financial reporting by addressing an issue in Statement No. 68, Accounting and Financial Reporting for Pensions, concerning transition provisions related to certain pension contributions made to defined benefit pension plans prior to implementation of statement. This statement amends paragraph 137 of Statement No. 68 which limited recognition of pension-related deferred inflows of resources at the transition to circumstances in which it is practical to determine the amounts of all deferred outflows of resources and deferred inflows of resources related to pensions. The adoption of this statement has a significant impact on the School District's financial statements. As noted above the School District restated beginning Net Position for the cumulative effect of this accounting change.
CASH AND CASH EQUIVALENTS
Composition of Deposits
Cash and cash equivalents consist of cash 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. Official Code of Georgia Annotated Section 45-8-14 authorizes the School District to deposit its funds in one or more solvent banks, insured Federal savings and loan associations or insured chartered building and loan associations.

- 11 -

WILKINSON COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015

EXHIBIT "H"

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 of Georgia 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 of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,
(5) Prime banker's acceptances,
(6) The local government investment pool (Georgia Fund 1) administered by the State of Georgia, Office of the State Treasurer,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia.
The School District does not have a formal policy regarding investment policies that address credit risks, custodial credit risks, concentration of credit risks, interest rate risks or foreign currency risks.
RECEIVABLES
Receivables consist of amounts due from property and sales taxes, grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the basic financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
PROPERTY TAXES
The Wilkinson County Board of Commissioners adopted the property tax levy for the 2014 tax digest year (calendar year) on October 24, 2014 (levy date) based on property values as of January 1, 2014. Taxes were due on December 31, 2014 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2014 tax digest are reported as revenue in the governmental funds for fiscal year 2015. The Wilkinson County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2015, for maintenance and operations amounted to $7,124,788.95.

- 12 -

WILKINSON COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015

EXHIBIT "H"

The tax millage rate levied for the 2014 tax year (calendar year) for the Wilkinson County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

19.66 mills

Additionally, Title Ad Valorem Tax revenue, at the fund reporting level, which is included in property tax revenues shown above, amounted to $294,573.72 during fiscal year ended June 30, 2015.
SALES TAXES
Education Special Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $1,602,827.06 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years. The most recent authorization expires on March 31, 2018.
INVENTORIES
Food Inventories
On the basic financial statements, inventories of donated food commodities used in the preparation of meals are reported at their Federally assigned value and purchased foods inventories are reported at cost (first-in, first-out). The School District uses the consumption method to account for inventories whereby donated food commodities are recorded as an asset and as revenue when received, and expenses/expenditures are recorded as the inventory items are used. Purchased foods are recorded as an asset when purchased and expenses/expenditures are recorded as the inventory items are used.
PREPAID ITEMS
Payments made to vendors for services that will benefit periods subsequent to June 30, 2015, are recorded as prepaid items.
CAPITAL ASSETS
Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund financial statements at the time of purchase (including ancillary charges). On the District-wide financial statements, all purchased capital assets are valued at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at estimated fair market value on the date donated. Disposals are deleted at depreciated recorded cost. The cost of normal maintenance and repairs that do not add to the value of assets or materially extend the useful lives of the assets is not capitalized. Depreciation is computed using the straight-line method. The School District does not capitalize book collections or works of art. During fiscal year 2015, no events or changes in circumstances affecting a capital asset that may indicate impairment were known to the School District.

- 13 -

WILKINSON COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015

EXHIBIT "H"

Capitalization thresholds and estimated useful lives of capital assets reported in the District-wide statements are as follows:

Capitalization Policy

Estimated Useful Life

Land Land Improvements Buildings and Improvements Equipment Intangible Assets Construction in Progress

All $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 100,000.00
All

N/A 15 to 80 years 10 to 80 years
3 to 20 years individually determined
N/A

Depreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives, with the exception of intangible assets which are amortized.

Amortization of intangible assets such as water, timber, and mineral rights, easements, patents, trademarks, copyrights and internally generated software is computed using the straight-line method over the estimated useful lives of the assets.

DEFERRED OUTFLOWS/INFLOWS OF RESOURCES
In addition to assets, the Statement of Net Position and/or the balance sheet will report a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of resources that applies to a future period(s) and therefore will not be recognized as an outflow of resources (expense/expenditure) until then. Under the full accrual method of accounting, the School District has reported deferred outflows of resources related to a defined benefit pension plan, as discussed in Note 16 - Retirement Plans.

In addition to liabilities, the Statement of Net Position and/or the balance sheet will report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of resources that applies to a future period(s) and therefore will not be recognized as an inflow of resources (revenue) until that time. Under the full accrual method of accounting, the School District has reported the actuarial changes in the School District's proportionate share of the governmental nonemployer cost sharing benefit pension plan, as discussed in Note 16 - Retirement Plans. This item is reported only in the District-wide Statement of Net Position. Additionally, the School District has only one type of item, which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reporting only in the governmental funds balance sheet. The governmental funds report unavailable revenues from property taxes and grants and these amounts are deferred and will be recognized as an inflow of resources (revenue) in the period in which the amounts become available.

GENERAL OBLIGATION BONDS
The School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. In the District-wide financial statements, bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Bond issuance costs are recognized as an outflow of resources in the fiscal year in which the bonds are issued.

- 14 -

WILKINSON COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015

EXHIBIT "H"

In the fund financial statements, the School District recognizes bond premiums and discounts, as well as bond issuance costs during the fiscal year bonds are issued. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the Statement of Net Position.
PENSIONS
For purposes of measuring the Net Pension Liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Teachers' Retirement System of Georgia (TRS), the Employees' Retirement System of Georgia (ERS) and the Public School Employees Retirement System (PSERS) and additions to/deductions from TRS/ERS/PSERS fiduciary net position have been determined on the same basis as they are reported by TRS/ERS/PSERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. See Note 16 - Retirement Plans.
NET POSITION
The School District's Net Position in the District-wide Statements is classified as follows:
Net Investment in Capital Assets - This represents the School District's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of Net Investment in Capital Assets.
Restricted Net Position - This represents resources for which the School District is legally or contractually obligated to spend resources for bus replacement, continuation of Federal programs, debt service and capital projects in accordance with restrictions imposed by external third parties.
Unrestricted Net Position - Unrestricted Net Position is the net amount of the assets, deferred outflows of resources, liabilities and deferred inflows of resources that are not included in the determination of Investment of Capital Assets and Restricted net position. Included in the Net deficit reported is the School District's Net Pension liability of $10,885,276.00 which is required for financial reporting.
FUND BALANCES
The School District's fund balances are classified as follows:
Nonspendable Amounts that cannot be spent either because they are in a nonspendable form or because they are legally or contractually required to be maintained intact.
Restricted Constraints are placed on the use of resources are either (1) externally imposed conditions by creditors, grantors, contributors, or laws and regulations of other governments or (2) imposed by law through constitutional provisions or enabling legislation.
Committed Amounts that can be used only for specific purposes pursuant to constraints imposed by formal action of the Board of Education. The Board of Education is the School District's highest level of decision-making authority, and the formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution approved by the Board. Committed fund balance also should incorporate contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements.

- 15 -

WILKINSON COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015

EXHIBIT "H"

Assigned Amounts that are constrained by the School District's intent to be used for specific purposes, but are neither restricted nor committed. The intent should be expressed by (1) the Board of Education or (2) the budget or finance committee, or the Superintendent, or designee, to assign amounts to be used for specific purposes.

Unassigned The residual classification for the General Fund. This classification represents fund balances that have not been assigned to other funds and that have not been restricted, committed, or assigned to specific purposes within the General Fund.

Fund Balances of the Governmental Funds at June 30, 2015, are as follows

Nonspendable Inventories Prepaid Assets
Restricted Bus Replacement Continuation of Federal Programs Capital Projects Debt Services
Committed School Activity Accounts
Unassigned

$ 103,707.00 6,714.36 $

110,421.36

$ 157,393.00 62,219.81
3,091,527.95 1,282,655.65

4,593,796.41

36,113.36 1,489,545.87

Fund Balance, June 30, 2014

$ 6,229,877.00

When multiple categories of fund balance are available for expenditure, the School District will start with the most restricted category and spend those funds first before moving down to the next category with available funds.
USE OF ESTIMATES
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates.
NOTE 3: BUDGETARY DATA
The budget is a complete financial plan for the School District's fiscal year, and is based upon careful estimates of expenditures together with probable funding sources. The budget is legally adopted each year for the General Fund. There is no statutory prohibition regarding over expenditure of the budget at any level. The budget for the General Fund, excluded certain Federal and State Sponsored Programs, along with the various school activity (principal) accounts and is prepared and adopted by function. The legal level of budgetary control was established by the Board at the aggregate function level. The budget for the General Fund was prepared in accordance with accounting principles permitted by the State of Georgia, but not in accordance with accounting principles generally accepted in the United States of America.

- 16 -

WILKINSON COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015

EXHIBIT "H"

The budgetary process begins with the School District's administration presenting an initial budget for the Board's review. The administration makes revisions as necessary based on the Board's guidelines and a tentative budget is approved. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality, as well as the School District's website. At the next regularly scheduled meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final budget. The approved budget is then submitted, in accordance with provisions of Official Code of Georgia Annotated 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 yearend.
The Superintendent is authorized by the Board to approve adjustments of no more than 5% of the amount budgeted for expenditures in any budget function for any fund. The Superintendent shall report any such adjustments to the Board. If expenditure of funds in any budget function for any fund is anticipated to be more than 5% of the budgeted amount, the Superintendent shall request Board approval for the budget amendment. Under no circumstance is the Superintendent or other staff person authorized to spend funds that exceed the total budget without approval by the Board.
See Schedule 6 General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual for a detail of any over/under expenditures during fiscal year 2015.
BUDGETARY/GAAP BASIS RECONCILIATION
In the General Fund, accounting principles used in developing budgets on a budgetary basis differ from those used in preparing financial statements in conformity with generally accepted accounting principles (GAAP).
The primary differences between the budget basis and GAAP basis are:
1. Revenues and Expenditures for certain Federal and State Sponsored Programs along with School Activity Accounts are not included in the Board's Amended Budget.

2. Payments made by the State of Georgia for school district employee retirement benefits are recognized as revenues and expenditures under GAAP but are not included in the Board's Amended Budget.
Thus, there is an accounting basis difference between the budget and actual Statement of Revenues, Expenditures and Changes in Fund Balances in the General Fund that is reconciled as follows:

Actual Revenues, GAAP Basis

$

Various Fund Revenues omitted from Budget

$ -2,020,685.67

On-Behalf Benefit Contribution omitted from Budget

-38,288.00

17,799,547.64 -2,058,973.67

Actual Revenues, Budgetary Basis

$ 15,740,573.97

Actual Expenditures, GAAP Basis

Various Fund Revenues omitted from Budget

$

On-Behalf Benefit Contribution omitted from Budget

-2,118,479.02 -38,288.00

Actual Expenditures, Budgetary Basis

$

17,655,459.13 -2,156,767.02 15,498,692.11

Revenues Over Expenditures, Budgetary Basis

241,881.86

Revenues Over Expenditures, GAAP Basis

144,088.51

- 17 -

WILKINSON COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015

EXHIBIT "H"

NOTE 4: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS
Official Code of Georgia Annotated (O.C.G.A.) 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 of the public funds being secured after the deduction of the amount of deposit insurance. If a depository elects the pooled method (O.C.G.A. Section 45-8-13.1) the aggregate of the market value of the securities pledged to secure a pool of public funds shall be not less than 110 percent of the daily pool balance.
Acceptable security for deposits consists of any one of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and
(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 or securities guaranteed 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
Custodial credit risk is the risk that in the event of a bank failure, the School District's deposits may not be returned to it. The School District does not have a deposit policy for custodial credit risk. At June 30, 2015, the School District had deposits with a carrying amount of $165,117.12, and a bank balance of $1,026,320.68. The bank balances insured by Federal depository insurance were $500,000.00 and the bank balances collateralized with securities held by the pledging financial institution or by the pledging financial institution's trust department or agent in the School District's name were $526,317.06.

- 18 -

WILKINSON COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015

EXHIBIT "H"

CATEGORIZATION OF INVESTMENTS
At June 30, 2015, the carrying value of the School District's total investments was $6,097,357.40. The School District's investments as of June 30, 2015, are presented below. All investments are presented by investment type.

Investment Type

Fair Value

Investment Maturity

1 - 5 Years

6 - 10 Years

Debt Securities

U. S. Treasuries Certificate of Indebtedness

State and Local Governments (SLGS)

$ 1,282,652.00 $

Investment Pools Office of State Treasurer Georgia Fund 1

4,814,705.40

100,000.00 $ 1,182,652.00

Total Investments

$ 6,097,357.40

The Georgia Fund 1 (local government investment pool) administered by the State of Georgia, Office of the State Treasurer is not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office of the State Treasurer for the Georgia Fund 1 (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. Additional information on the Georgia Fund 1 is disclosed in the State of Georgia Comprehensive Annual Financial Report. This audit can be obtained from the Georgia Department of Audits and Accounts at www.audits.ga.gov/SGD/CAFR.html
The Primary Liquidity Portfolio consists of Georgia Fund 1 which is not registered with the SEC as an investment company and does not operate in a manner consistent with the SEC's Rule 2a-7 of the Investment Company Act of 1940. The investment is valued at the pool's share price, $1.00 per share. The pool is an AAAf rated investment pool by Standard and Poor's. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2015, was 56 days.
Interest Rate Risk
Interest rate risk is the risk that changes in interest rates of debt investment will adversely affect the fair value of an investment. The School District does not have a formal policy for managing interest rate risk.
Custodial Credit Risk
Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, the School District will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The School District does not have a formal policy for managing custodial credit risk.
At June 30, 2015, $1,282,652.00 of the School District's applicable investments were uninsured or unregistered, with securities held by the counterparty, or by its trust department or agent, but not in the School District's name.

- 19 -

WILKINSON COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015

EXHIBIT "H"

NOTE 5: NON-MONETARY TRANSACTIONS
The School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 2 Inventories.

NOTE 6: CAPITAL ASSETS
The following is a summary of changes in the Capital Assets during the fiscal year:

Governmental Activities Capital Assets, Not Being Depreciated:
Land

Balances July 1, 2014

Increases

Decreases

Balances June 30, 2015

$ 438,939.00 $

0.00 $

0.00 $

438,939.00

Capital Assets, Being Depreciated: Land Improvements Buildings and Improvements Equipment

1,474,949.00 44,291,854.00
4,593,476.00

50,000.00

1,474,949.00

44,291,854.00

0.00

4,643,476.00

Less: Accumulated Depreciation: Land Improvements Buildings and Improvements Equipment

1,084,924.00 6,187,469.00 2,753,210.00

65,333.00 741,866.00 301,716.00

1,150,257.00 6,929,335.00 3,054,926.00

Total Capital Assets, Being Depreciated, Net

40,334,676.00 -1,058,915.00

0.00

39,275,761.00

Governmental Activity Capital Assets - Net

$ 40,773,615.00 $ -1,058,915.00 $

0.00 $ 39,714,700.00

Current year depreciation expense by function is as follows:

Instruction

Support Services

Educational Media Services

$

General Administration

School Administration

Maintenance and Operation of Plant

Student Transportation Services

Food Services

15,727.00 11,736.00 22,479.00 21,313.00 156,830.00

$ 825,382.00
228,085.00 55,448.00
$ 1,108,915.00

- 20 -

WILKINSON COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015

NOTE 7: INTERFUND TRANSFERS
Interfund transfers for the year ended June 30, 2015, consisted of the following:

Transfer to

Transfers From District-wide
Capital Projects

Debt Service Fund

$

1,345,153.23

EXHIBIT "H"

Transfers are used to move sales tax revenues collected by the Capital Projects Fund to the Debt Service Fund to provide funds required to pay debt service.

NOTE 8: RISK MANAGEMENT
The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; acts of God and unemployment compensation.

The School District has obtained commercial insurance for risk of loss associated with torts, assets, errors or omissions and acts of God. 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 is self-insured with regard to unemployment compensation claims. The School District accounts for claims with expenses/expenditures and the related liability is reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated.

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

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

2014 $ 2015 $

0.00 $ 0.00 $

21,835.00 $ 0.00 $

21,835.00 $ 0.00 $

0.00 0.00

The School District participates in the Georgia Education Workers' Compensation Trust, a public entity risk pool organized on December 1, 1991, to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The School District pays an annual premium to the Trust for its general workers' compensation insurance coverage. Specific excess of loss insurance coverage is provided through an agreement by the Trust with the Safety National Casualty Company to provide coverage for potential losses sustained by the Trust in excess of $1.0 million loss per occurrence, up to the statutory limit. Employers' Liability insurance coverage is also provided with limits of $2.0 million. The Trust covers the first $1.0 million of each Employers Liability claim with Safety National providing additional Employers Liability limits up to a $2.0 million per occurrence maximum. Safety National Casualty Company also provides $2.0 million in aggregate coverage to the Trust, attaching at 110% of the loss fund and based on the Fund's annual normal premium.

- 21 -

WILKINSON COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015

EXHIBIT "H"

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

Position Covered

Amount

Superintendent

$ 50,000.00

NOTE 9: SHORT-TERM DEBT
The School District issues tax anticipation notes in advance of property tax collections, depositing the proceeds in its General Fund. This short-term debt is to provide cash for operations until property tax collections are received by the School District. Article IX, Section V, Paragraph V of the Constitution of the State of Georgia limits the aggregate amount of short-term debt to 75% of the total gross income from taxes collected in the preceding year and requires all short-term debt to be repaid no later than December 31 of the calendar year in which the debt was incurred.

Short-term debt activity for the fiscal year is as follows:

Beginning Balance

Issued

Redeemed

Ending Balance

Tax Anticipation Notes

$

0.00 $ 600,000.00 $ 600,000.00 $

0.00

NOTE 10: LONG-TERM LIABILITIES

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

Purpose

Interest Rates

General Government - Series 2011 (QSCB)

4.58% - 5.78%

Amount $ 16,500,000.00

The changes in Long-Term Liabilities during the fiscal year ended June 30, 2015, were as follows:

Balance July 1, 2014

Additions

Governmental Activities

Balance

Deductions

June 30, 2015

Due Within One Year

G.O. Bonds

$ 16,500,000.00 $

0.00 $

0.00 $ 16,500,000.00 $

0.00

- 22 -

WILKINSON COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015

EXHIBIT "H"

At June 30, 2015, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30: 2016 2017 2018 2019 2020 2021 - 2025 2026 - 2027

General Obligation Debt

Principal

Interest

$
$ 10,460,000.00 6,040,000.00

883,567.00 883,567.00 883,567.00 883,567.00 883,567.00 2,967,985.50 770,753.00

Total Principal and Interest

$ 16,500,000.00 $

8,156,573.50

In fiscal 2011, the Wilkinson County Board of Education sold $16,500,000.00 of Qualified School Construction Bonds (QCSB) for the purpose of constructing a new Primary/Elementary School in the District. Under Federal Law, these bonds are eligible to receive an interest subsidy from the U.S. Government which will materially offset the School District's liability to make full interest debt service amortization payments as scheduled. To qualify for this subsidy the School District is required to periodically file appropriate documents with the Internal Revenue Service. The amount of interest due on QCSB bonds included in the above amortization schedule is $8,156,573.50. The interest subsidy received by the School District from the U.S Government in fiscal year 2015 funded all but $75,922.46 of interest expense due on the series 2011 QCSB bonds in fiscal year 2015.
NOTE 11: ON-BEHALF PAYMENTS
The School District has recognized revenues and costs in the amount of $38,288.00 for retirement contributions paid on the School District's behalf by the following State Agencies.
Office of State Treasurer Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $38,288.00
Funds paid on behalf of the School District are reported in governmental funds. See Note 16 Retirement Plans for the State support related to the Net Pension Liability.
NOTE 12: SIGNIFICANT CONTINGENT LIABILITIES
Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any costs which are disallowed under grant terms. The School District believes that such disallowances, if any, will be immaterial to its overall financial position.
The School District is a defendant in various legal proceedings pertaining to matters incidental to the performance of routine School District operations. The ultimate disposition of these proceedings is not presently determinable, but is not believed to be material to the basic financial statements.

- 23 -

WILKINSON COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015

EXHIBIT "H"

NOTE 13: RELATED PARTY TRANSACTIONS
James S. Price, the stepfather of Kathy Jackson, the bookkeeper of Wilkinson County Board of Education, contracted with the School District to rent personal equipment and to purchase supplies. Mr. Price was paid $1,040.00.
Johnny Jackson, the husband of Kathy Jackson and a music teacher employed by the School District, retired in May 2015. The School District elected to purchase music equipment from Mr. Jackson at a cost of $11,000.00.
NOTE 14: SUBSEQUENT EVENTS
Subsequent to fiscal year end, the School District borrowed $600,000.00 on a short-term Tax Anticipation Note from the local bank for cash flow purposes. This loan was repaid by the School District on December 31, 2015. The costs associated with this loan, including interest, were $2,617.81.
NOTE 15: POST-EMPLOYMENT BENEFITS
GEORGIA SCHOOL PERSONNEL POST-EMPLOYMENT HEALTH BENEFIT FUND
Plan Description. The Georgia School Personnel Post-employment Health Benefit Fund (School OPEB Fund) is a cost-sharing multiple-employer defined benefit post-employment healthcare plan that covers eligible former employees of public school systems, libraries and regional educational service agencies. The School OPEB Fund provides health insurance benefits to eligible former employees and their qualified beneficiaries through the State Employees Health Benefit Plan administered by the Department of Community Health. The Official Code of Georgia Annotated (O.C.G.A.) assigns the authority to establish and amend the benefit provisions of the group health plans, including benefits for retirees, to the Board of Community Health (Board). The Department of Community Health, which includes the School OPEB Fund, issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.
Funding Policy. The contribution requirements of plan members and participating employers are established by the Board in accordance with the current Appropriations Act and may be amended by the Board. Contributions of plan members or beneficiaries receiving benefits vary based on plan election, dependent coverage, and Medicare eligibility and election. For members with fewer than five years of service as of January 1, 2012, contributions also vary based on years of service. On average, members with five years or more of service as of January 1, 2012 pay approximately 25% of the cost of the health insurance coverage. In accordance with the Board resolution dated December 8, 2011, for members with fewer than five years of service as of January 1, 2012, the State provides a premium subsidy in retirement that ranges from 0% for fewer than 10 years of service to 75% (but no greater than the subsidy percentage offered to active employees) for 30 or more years of service. The subsidy for eligible dependents ranges from 0% to 55% (but no greater than the subsidy percentage offered to dependents of active employees minus 20%). No subsidy is available to Medicare eligible members not enrolled in a Medicare Advantage Option. The Board of Community Health sets all member premiums by resolution and in accordance with the law and applicable revenue and expense projections. Any subsidy policy adopted by the Board may be changed at any time by Board resolution and does not constitute a contract or promise of any amount of subsidy.
Participating employers are statutorily required to contribute in accordance with the employer contribution rates established by the Board. The contribution rates are established to fund all benefits due under the health insurance plans for both active and retired employees based on projected "payas-you-go" financing requirements. Contributions are not based on the actuarially calculated annual required contribution (ARC) which represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years.

- 24 -

WILKINSON COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015

EXHIBIT "H"

The combined active and retiree contribution rates established by the Board for employers participating in the School OPEB Fund were as follows for the fiscal year ended June 30, 2015:

For certificated teachers, librarians and regional educational service agencies and certain other eligible participants:

July 1, 2014 June 30, 2015 $945.00 per member per month

For non-certificated school personnel:

July 1, 2014 June 30, 2015 $596.20 per member per month

No additional contribution was required by the Board for fiscal year 2015 nor contributed to the School OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the School plan for other post-employment benefits and are subject to appropriation.

The School District's combined active and retiree contributions to the health insurance plans, which equaled the required contribution, for the current fiscal year and the preceding two fiscal years were as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2015 2014 2013

100% 100% 100%

$

1,835,772.20

$

1,858,339.00

$

1,654,501.84

NOTE 16: RETIREMENT PLANS
Wilkinson County Board of Education participates in various retirement plans administered by the State of Georgia, as further explained below.

TEACHERS' RETIREMENT SYSTEM OF GEORGIA (TRS)
Plan Description: All teachers of the District as defined in 47-3-60 of the Official Code of Georgia Annotated (O.C.G.A.) and certain other support personnel as defined by 47-3-63 are provided a pension through the Teachers' Retirement System of Georgia (TRS). TRS, a cost-sharing multiple- employer defined benefit pension plan, is administered by the TRS Board of Trustees (TRS Board). Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. The Teachers' Retirement System of Georgia issues a publicly available separate financial audit report that can be obtained at www.trsga.com/publications.
Benefits Provided: TRS provides service retirement, disability retirement, and death benefits. Normal retirement benefits are determined as 2% of the average of the employee's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. An employee is eligible for normal service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. Ten years of service is required for disability and death benefits eligibility. Disability benefits are based on the employee's creditable service and compensation up to the time of disability. Death benefits equal the amount that would be payable to the employee's beneficiary had the employee retired on the date of death. Death benefits are based on the employee's creditable service and compensation up to the date of death.

- 25 -

WILKINSON COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015

EXHIBIT "H"

Contributions: Per Title 47 of the O.C.G.A., contribution requirements of active employees and participating employers, as actuarially determined, are established and may be amended by the TRS Board. Pursuant to O.C.G.A. 47-3-63, the employer contributions for certain full-time public school support personnel are funded on behalf of the employer by the State of Georgia. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees were required to contribute 6% of their annual pay during fiscal year 2015. The school district's contractually required contribution rate for the year ended June 30, 2015 was 13.15% of annual School District payroll.

Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2015 2014 2013

100% 100% 100%

$

1,150,496.00

$

1,059,036.00

$

962,851.00

EMPLOYEES' RETIREMENT SYSTEM
Plan description: The Employees' Retirement System of Georgia (ERS) is a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly during the 1949 Legislative Session for the purpose of providing retirement allowances for employees of the State of Georgia and its political subdivisions. ERS is directed by a Board of Trustees. Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. ERS issues a publicly available financial report that can be obtained at www.ers.ga.gov/formspubs/formspubs.
Benefits provided: The ERS Plan supports three benefit tiers: Old Plan, New Plan, and Georgia State Employees' Pension and Savings Plan (GSEPS). Employees under the old plan started membership prior to July 1, 1982 and are subject to plan provisions in effect prior to July 1, 1982. Members hired on or after July 1, 1982 but prior to January 1, 2009 are new plan members subject to modified plan provisions. Effective January 1, 2009, new state employees and rehired state employees who did not retain membership rights under the Old or New Plans are members of GSEPS. ERS members hired prior to January 1, 2009 also have the option to irrevocably change their membership to GSEPS.
Under the old plan, the new plan, and GSEPS, a member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 60 or 30 years of creditable service regardless of age. Additionally, there are some provisions allowing for early retirement after 25 years of creditable service for members under age 60.
Retirement benefits paid to members are based upon the monthly average of the member's highest 24 consecutive calendar months, multiplied by the number of years of creditable service, multiplied by the applicable benefit factor. Annually, postretirement cost-of-living adjustments may also be made to members' benefits, provided the members were hired prior to July 1, 2009. The normal retirement pension is payable monthly for life; however, options are available for distribution of the member's monthly pension, at reduced rates, to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS.

- 26 -

WILKINSON COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015

EXHIBIT "H"

Contributions: Member contributions under the old plan are 4% of annual compensation, up to $4,200.00, plus 6% of annual compensation in excess of $4,200.00. Under the old plan, the state pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these state contributions are included in the members' accounts for refund purposes and are used in the computation of the members' earnable compensation for the purpose of computing retirement benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation. The School District's contractually required contribution rate, actuarially determined annually, for the year ended June 30, 2015 was 21.96% of annual covered payroll for old and new plan members and 18.87% for GSEPS members. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability.

Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2015 2014 2013

100%

$

36,345.00

100%

$

26,816.00

100%

$

15,517.00

PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM (PSERS)
Plan description: PSERS is a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly in 1969 for the purpose of providing retirement allowances for public school employees who are not eligible for membership in the Teachers' Retirement System of Georgia. The ERS Board of Trustees, plus two additional trustees, administers PSERS. Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. PSERS issues a publicly available financial report that can be obtained at www.ers.ga.gov/formspubs/formspubs.

Benefits provided: A member may retire and elect to receive normal monthly retirement benefits after completion of ten years of creditable service and attainment of age 65. A member may choose to receive reduced benefits after age 60 and upon completion of ten years of service.

Upon retirement, the member will receive a monthly benefit of $14.75, multiplied by the number of years of creditable service. Death and disability benefits are also available through PSERS. Additionally, PSERS may make periodic cost-of-living adjustments to the monthly benefits. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contribution, the member forfeits all rights to retirement benefits.
Contributions: The general assembly makes an annual appropriation to cover the employer contribution to PSERS on behalf of local school employees (bus drivers, cafeteria workers, and maintenance staff). The annual employer contribution required by statute is actuarially determined and paid directly to PSERS by the State Treasurer in accordance with O.C.G.A. 47-4-29(a) and 60(b). Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability.
Individuals who became members prior to July 1, 2012 contribute $4 per month for nine months each fiscal year. Individuals who became members on or after July 1, 2012 contribute $10 per month for nine months each fiscal year. The State of Georgia, although not the employer of PSERS members, is required by statute to make employer contributions actuarially determined and approved and certified by the PSERS Board of Trustees.

- 27 -

WILKINSON COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015

EXHIBIT "H"

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions
At June 30, 2015, the School District reported a liability of $10,885,276.00 for its proportionate share of the Net Pension Liability for TRS ($10,655,626.00) and ERS ($229,650.00).
The Net Pension Liability was measured as of June 30, 2014. The total pension liability used to calculate the Net Pension Liability was based on an actuarial valuation as of June 30, 2013. An expected total pension liability as of June 30, 2014 was determined using standard roll-forward techniques. The School District's proportion of the Net Pension Liability was based on contributions to TRS and ERS during the fiscal year ended June 30, 2014.
At June 30, 2014, the School District's TRS proportion was 0.084343%, which was an increase of 0.000996% from its proportion measured as of June 30, 2013. At June 30, 2014, the School District's ERS proportion was 0.006123%, which was an increase of 0.001636% from its proportion measured as of June 30, 2013.
At June 30, 2015, the School District did not have a PSERS liability for a proportionate share of the Net Pension Liability because of a Special Funding Situation with the State of Georgia, which is responsible for the Net Pension Liability of the plan. The amount of the State's proportionate share of the Net Pension Liability associated with the School District is $158,752.00.
The PSERS Net Pension Liability was measured as of June 30, 2014. The total pension liability used to calculate the Net Pension Liability was based on an actuarial valuation as of June 30, 2013. An expected total pension liability as of June 30, 2014 was determined using standard roll-forward techniques. The State's proportion of the Net Pension Liability associated with the School District was based on actuarially determined contributions paid by the State during the fiscal year ended June 30, 2014.
For the year ended June 30, 2015, the School District recognized pension expense of $762,530.00 for TRS, $44,558.00 for ERS and $13,787.00 for PSERS and revenue of $13,787.00 for PSERS. The revenue is support provided by the State of Georgia.
At June 30, 2015, the School District reported deferred outflows of resources and deferred inflows of resources related to pension from the following sources:

Net difference between projected and actual earnings on pension plan investments

TRS Deferred Outflows of Resources

Deferred Inflows of Resources

$ 3,714,777.00

ERS

Deferred

Deferred

Outflows of

Inflows of

Resources

Resources

$ 56,051.00

Changes in proportion and differences

between School District contributions

and proportionate share of

contributions

$

141,413.00

$ 48,855.00

School District contributions subsequent to the measurement date

1,150,496.00

36,345.00

Total

$ 1,291,909.00 $ 3,714,777.00 $ 85,200.00 $ 56,051.00

- 28 -

WILKINSON COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015

EXHIBIT "H"

Wilkinson County Board of Education contributions subsequent to the measurement date of June 30, 2014 for TRS and ERS are reported as deferred outflows of resources and will be recognized as a reduction of the Net Pension Liability in the year ended June 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Year Ended June 30:

TRS

ERS

2016 2017 2018 2019 2020

$ -896,555.00 $ 16,522.00

$ -896,555.00 $

4,307.00

$ -896,555.00 $ -14,013.00

$ -896,556.00 $ -14,012.00

$

12,857.00

Actuarial assumptions: The total pension liability as of June 30, 2014 was determined by an actuarial valuation as of June 30, 2013, using the following actuarial assumptions, applied to all periods included in the measurement:

Teachers' Retirement System:

Inflation

3.00%

Salary increases

3.75 7.00%, average, including inflation

Investment rate of return

7.50%, net of pension plan investment expense, including inflation

Mortality rates were based on the RP-2000 Combined Mortality Table for Males or Females set back two years for males and set back three years for females.

The actuarial assumptions used in the June 30, 2013 valuation were based on the results of an actuarial experience study for the period July 1, 2004 June 30, 2009.

Employees' Retirement System:

Inflation

3.00%

Salary increases

5.45 9.25%, average, including inflation

Investment rate of return

7.50%, net of pension plan investment expense, including inflation

Mortality rates were based on the RP-2000 Combined Mortality Table for the periods after service retirement, for dependent beneficiaries, and for deaths in active service, and the RP-2000 Disabled Mortality Table set back eleven years for males for the period after disability retirement.

The actuarial assumptions used in the June 30, 2013 valuation were based on the results of an actuarial experience study for the period July 1, 2004 June 30, 2009.

- 29 -

WILKINSON COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015

EXHIBIT "H"

Public School Employees Retirement System:

Inflation

3.00%

Salary increases

N/A

Investment rate of return

7.50%, net of pension plan investment expense, including inflation

Mortality rates were based on the RP-2000 Combined Mortality Table set forward one year for males for the period after service retirement, for dependent beneficiaries, and for deaths in active service, and the RP-2000 Disabled Mortality Table set back two years for males and set forward one year for females for the period after disability retirement.

The long-term expected rate of return on TRS, ERS and PSERS pension plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target asset allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Asset class
Fixed income Domestic large stocks Domestic mid stocks Domestic small stocks International developed market stocks International emerging market stocks
Total
* Rates shown are net of the 3.00% assumed rate of inflation

Target allocation
30.00% 39.70%
3.70% 1.60% 18.90% 6.10%
100.00%

Long-term expected real rate of return*
3.00% 6.50% 10.00% 13.00% 6.50% 11.00%

Discount rate: The discount rate used to measure the total TRS, ERS and PSERS pension liability was 7.50%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and nonemployer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the TRS, ERS and PSERS pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

- 30 -

WILKINSON COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015

EXHIBIT "H"

Sensitivity of the Wilkinson County Board of Education's proportionate share of the Net Pension Liability to changes in the discount rate: The following presents the School District's proportionate share of the Net Pension Liability calculated using the discount rate of 7.50%, as well as what the School District's proportionate share of the Net Pension Liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.50%) or 1-percentage-point higher (8.50%) than the current rate:
Teachers' Retirement System:

School District's proportionate share of the Net Pension Liability

1% Decrease (6.50%)

Current Discount Rate

1% Increase (8.50%)

$ 19,636,888.00 $ 10,655,626.00 $ 3,259,742.00

Employees' Retirement System:
School District's proportionate share of the Net Pension Liability

1% Decrease (6.50%)

Current Discount Rate
(7.50%)

$ 334,876.00 $ 229,650.00 $

1% Increase (8.50%)
140,079.00

Pension plan fiduciary net position: Detailed information about the pension plan's fiduciary net position is available in the separately issued TRS, ERS and PSERS financial report which is publically available at www.trsga.com/publications and http://www.ers.ga.gov/formspubs/formspubs.html.

- 31 -

(This page left intentionally blank)

WILKINSON COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY TEACHERS' RETIREMENT SYSTEM OF GEORGIA
FOR THE YEAR ENDED JUNE 30, 2015
School District's proportion of the net pension liability School District's proportionate share of the net pension liability School District's covered-employee payroll School District's proportionate share of the net pension liability
as a percentage of its covered employee payroll Plan fiduciary net position as a percentage of the total pension liability

SCHEDULE "1"
2015 0.084343% $ 10,655,626.00 $ 8,624,072.00
123.56% 84.03%

This schedule is intended to show information for 10 years. Additional years will be displayed as they become available. Schedule includes all significant plans and funds administered by Wilkinson County Board of Education.
- 33 -

WILKINSON COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
FOR THE YEAR ENDED JUNE 30, 2015
School District's proportion of the net pension liability School District's proportionate share of the net pension liability School District's covered-employee payroll School District's proportionate share of the net pension liability
as a percentage of its covered employee payroll Plan fiduciary net position as a percentage of the total pension liability

SCHEDULE "2"

2015

0.0061233%

$

229,650.00

$

145,265.00

158.09% 77.99%

This schedule is intended to show information for 10 years. Additional years will be displayed as they become available. Schedule includes all significant plans and funds administered by Wilkinson County Board of Education.
- 34 -

(This page left intentionally blank)

WILKINSON COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CONTRIBUTIONS TEACHERS' RETIREMENT SYSTEM OF GEORGIA
FOR THE YEAR ENDED JUNE 30

Contractually required contribution Contributions in relation to the contractually required contribution Contribution deficiency (excess) School District's covered-employee payroll Contributions as a percentage of covered-employee payroll

2015

2014

2013

$ 1,150,496.00 $ 1,059,036.00 $ 962,852.00

$ 1,150,496.00 $ 1,059,036.00 $ 962,852.00

$

0.00 $

0.00 $

0.00

$ 8,749,019.01 $ 8,624,071.66 $ 8,438,667.84

13.15%

12.28%

11.41%

- 36 -

SCHEDULE "3"

2012

2011

2010

2009

2008

2007

2006

$ 883,002.00 $ 920,848.00 $ 943,854.06 $ 879,141.00 $ 828,625.59 $ 804,225.00 $ 763,717.00

$ 883,002.00 $ 920,848.00 $ 943,854.06 $ 879,141.00 $ 828,625.59 $ 804,225.00 $ 763,717.00

$

0.00 $

0.00 $

0.00

0.00

0.00

0.00

0.00

$ 8,589,513.62 $ 8,957,665.37 $ 9,690,493.43 $ 9,473,502.16 $ 8,929,155.06 $ 8,666,217.67 $ 8,265,335.50

10.28%

10.28%

9.74%

9.28%

9.28%

9.28%

9.24%

- 37 -

WILKINSON COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CONTRIBUTIONS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
FOR THE YEAR ENDED JUNE 30

Contractually required contribution Contributions in relation to the contractually required contribution Contribution deficiency (excess) School District's covered-employee payroll Contributions as a percentage of covered-employee payroll

2015

2014

2013

$ 36,345.00 $ 26,816.00 $ 15,517.00

$ 36,345.00 $ 26,816.00 $ 15,517.00

$

0.00 $

0.00 $

0.00

$ 165,505.46 $ 145,265.44 $ 104,140.94

21.96%

18.46%

14.90%

- 38 -

SCHEDULE "4"

2012

2011

2010

2009

2008

2007

2006

$ 11,577.00 $ 12,578.00 $ 12,651.00 $ 9,053.00 $ 5,000.00 $ 4,074.00 $ 4,051.00

$ 11,577.00 $ 12,578.00 $ 12,651.00 $ 9,053.00 $ 5,000.00 $ 4,074.00 $ 4,051.00

$

0.00 $

0.00 $

0.00 $

0.00 $

0.00

0.00

0.00

$ 99,544.28 $ 120,826.13 $ 121,527.38 86,964.46 48,030.74 $ 39,135.45 $ 38,914.51

11.63%

10.41%

10.41%

10.41%

10.41%

10.41%

10.41%

- 39 -

WILKINSON COUNTY BOARD OF EDUCATION NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED JUNE 30, 2015

SCHEDULE "5"

Teachers' Retirement System

Changes of assumptions: In 2010 and later, the expectation of retired life mortality was changed to the RP2000 Mortality Tables rather than the 1994 Group Annuity Mortality Table, which was used prior to 2010. In 2010, rates of withdrawal, retirement, disability and mortality were adjusted to more closely reflect actual experience. In 2010, assumed rates of salary increase were adjusted to more closely reflect actual and anticipated experience.
Method and assumptions used in calculations of actuarially determined contributions: The actuarially determined contribution rates in the schedule of contributions are calculated as of June 30, three years prior to the end of the fiscal year in which contributions are reported. The following actuarial methods and assumptions were used to determine the contractually required contributions for year ended June 30, 2015 reported in that schedule:

Valuation date Actuarial cost method Amortization method Remaining amortization period Asset valuation method Inflation rate Salary increases Investment rate of return

June 30, 2012 Entry age Level percentage of payroll, open 30 years Seven-year smoothed market 3.00% 3.75 7.00%, including inflation 7.50%, net of pension plan investment
expense, including inflation

Employees' Retirement System
Changes of assumptions: There were no changes in assumptions or benefits that affect the measurement of the total pension liability since the prior measurement date.

Method and assumptions used in calculations of actuarially determined contributions: The actuarially determined contribution rates in the schedule of contributions are calculated as of June 30, three years prior to the end of the fiscal year in which contributions are reported. The following actuarial methods and assumptions were used to determine the contractually required contributions for year ended June 30, 2015 reported in that schedule:

Valuation date Actuarial cost method Amortization method Remaining amortization period Asset valuation method Inflation rate Salary increases
Investment rate of return

June 30, 2012 Entry age Level dollar, open 30 years Seven-year smoothed market 3.00% 2.725% 4.625% for FY 2012-2013, 5.45% - 9.25% for FY2014+ 7.50%, net of pension plan investment
expense, including inflation

- 40 -

WILKINSON COUNTY BOARD OF EDUCATION GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL
YEAR ENDED JUNE 30, 2015

SCHEDULE "6"

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation
Total Expenditures
Excess of Revenues over (under) Expenditures
Fund Balances - Beginning
Adjustments

NONAPPROPRIATED BUDGETS

ORIGINAL (1)

FINAL (1)

ACTUAL AMOUNTS

VARIANCE OVER/UNDER

$ 7,064,788.00 $ 7,064,788.00 $ 7,124,788.95 $

60,000.95

35,848.13

35,848.13

6,947,497.00

6,947,497.00

7,543,431.97

595,934.97

179,615.00

2,682,404.63

2,502,789.63

212,100.61

212,100.61

2,500.00

2,500.00

3,644.70

1,144.70

197,328.65

197,328.65

14,014,785.00 14,194,400.00 17,799,547.64

3,605,147.64

9,353,261.00
351,511.00 513,107.00 233,440.00 356,842.00 1,234,258.00 101,759.00 1,700,452.00 1,158,393.00
8,806.00
15,011,829.00
-997,044.00
1,735,049.09

9,881,645.00
352,111.00 1,261,809.00
233,440.00 357,796.00 1,234,258.00 101,759.00 1,700,452.00 1,203,653.00
88,865.00
16,415,788.00
-2,221,388.00
1,735,049.09
-8,563.04

9,590,384.79
641,528.59 1,679,966.21
225,137.91 334,370.52 1,231,040.00
99,647.10 1,918,221.27
968,693.92 83,664.95
882,803.87
17,655,459.13
144,088.51
1,711,604.89

291,260.21
-289,417.59 -418,157.21
8,302.09 23,425.48
3,218.00 2,111.90 -217,769.27 234,959.08 5,200.05 -882,803.87
-1,239,671.13
2,365,476.51
-23,444.20
8,563.04

Fund Balances - Ending

$ 738,005.09 $ -494,901.95 $ 1,855,693.40 $ 2,350,595.35

Notes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual

(1) Original and Final Budget amounts do not include the budgeted revenues or expenditures of various programs reported as a part of the General Fund. The actual revenues and expenditures of these programs were as follows:

Special Education Race to the Top ROTC Program Early Reading Program Principals Accounts Pre-School Program School Food Services

Revenues

Expenditures

$

333,410.00 $

364,141.24

2,615.94

2,615.94

50,465.87

67,228.06

9,782.01

323,661.25

325,495.20

411,584.58

483,766.60

898,948.03

865,449.97

$ 2,020,685.67 $ 2,118,479.02

See notes to the basic financial statements.

- 41 -

WILKINSON COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2015

SCHEDULE "7"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program
Total U.S. Department of Agriculture
Education, U. S. Department of School Improvement Grants Cluster Pass-Through From Georgia Department of Education ARRA - School Improvement Grants School Improvement Grants
Total School Improvement Cluster
Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Special Education Grants to States Preschool Grants
Total Special Education Cluster
Other Programs Direct Early Reading First Pass-Through From Georgia Department of Education ARRA - Race-to-the-Top Incentive Grants Career and Technical Education - Basic Grants to States Improving Teacher Quality State Grants Mathematics and Science Partnerships Rural Education Title I Grants to Local Educational Agencies
Total Other Programs
Total U. S. Department of Education
Defense, U. S. Department of Direct Department of the Army R.O.T.C. Program

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

EXPENDITURES IN PERIOD

* 10.553 * 10.555

N/A

N/A

$

(2) 848,804.01 (1)
848,804.01

84.388

N/A

84.377

N/A

87,834.14 647,136.89
734,971.03

84.027

N/A

84.173

N/A

84.359

84.395

N/A

84.048

N/A

84.367

N/A

84.366

N/A

84.358

N/A

* 84.010

N/A

351,829.24 12,312.00
364,141.24
9,782.01 6,014.95 23,272.00 88,274.16 2,615.94 28,884.59 595,581.20 754,424.85 1,853,537.12
67,228.06

Total Expenditures of Federal Awards

$

2,769,569.19

N/A = Not Available

Notes to the Schedule of Expenditures of Federal Awards

(1) Includes the Federally assigned value of donated commodities for the Food Donation Program in the amount of $44,584.49.

(2) Expenditures for the funds earned on the School Breakfast Program ($195,847.42) were not maintained separately and are included in the 2015 National School Lunch Program.

Major Programs are identified by an asterisk (*) in front of the CFDA number.

The School District did not provide Federal Assistance to any Subrecipient.

The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Wilkinson County Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements.

See notes to the basic financial statements.

- 42 -

WILKINSON COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2015
AGENCY/FUNDING
GRANTS Bright From the Start: Georgia Department of Early Care and Learning Pre-Kindergarten Program
Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades - Early Intervention (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program 20 Days Additional Instruction Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Mid-term Adjustment Hold-Harmless Amended Formula Adjustment Categorical Grants Pupil Transportation Regular Nursing Services Sparsity Vocational Supervisors Other State Programs Food Services Math and Science Supplements Preschool Handicapped Program Teacher of the Year Vocational Education
Office of the State Treasurer Public School Employees Retirement

SCHEDULE "8"
GOVERNMENTAL FUND TYPE GENERAL FUND
$ 411,584.58
415,689.00 84,339.00
1,128,967.00 372,622.00 450,991.00 184,859.00 959,818.00 801,743.00 305,722.00 842,124.00 63,086.00 18,406.00 68,968.00 43,973.00 160,432.00 51,440.00 25,958.00
330,701.00 449,765.00 346,886.00 218,605.00 -802,226.00
405,361.00 45,000.00 39,827.00 6,534.00
25,209.00 25,472.14
7,079.00 1,014.25 15,195.00
38,288.00
$ 7,543,431.97

See notes to the basic financial statements.

- 43 -

WILKINSON COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2015

SCHEDULE "9"

PROJECT 2008 SPLOST

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT YEAR (3) (4)

AMOUNT EXPENDED IN PRIOR YEARS (3) (4)

(i) Renovating, extending, repairing, adding to and equipping

Wilkinson County Primary/Elementary School, including grounds

and paving improvements;

$

3,000,000.00 $

3,000,000.00

$

359,831.53

(ii) adding to and equipping Wilkinson County Middle/High School including grounds and pavement improvements, and ROTC facilities;

3,000,000.00

3,000,000.00 $

21,495.50

690,535.32

(iii) repairing and improving the oxidation ponds at both schools;

120,000.00

121,077.68

121,077.68

(iv) acquiring and installing system-wide instructional and administrative technology, safety and security equipment;

1,496,000.00

1,910,088.77

1,910,088.77

(v) acquisition of school buses, maintenance vehicles;

1,064,000.00

1,064,000.00

826,935.46

(vi) acquisition of music, vocational, and physical/ education/athletic equipment;

120,000.00

120,000.00

24,449.99

19,734.63

(vii) acquisition of fine arts equipment and furnishings, to include lighting and sound equipment;

100,000.00

100,000.00

(viii) purchase of textbooks and library books;

1,000,000.00

1,000,000.00

30,947.42

762,401.96

(ix) acquiring any necessary property therefore, both real and personal (the "Projects");

2,000,000.00

2,000,000.00

1,808,734.16

(x) paying expenses incident to accomplish the foregoing.

100,000.00

177,037.02

177,037.02

PROJECT 2011 SPLOST

$ 12,000,000.00 $ 12,492,203.47 $

76,892.91 $ 6,676,376.53

(i) acquiring, constructing, and equipping a new Primary/Elementary school in Wilkinson County;

$ 6,410,145.00 $ 22,741,475.98

32,000.00 $ 22,709,475.98

(ii) rehabilitating, repairing, renovating, extending, and improving existing School District buildings and facilities;

1,000,000.00

1,000,000.00

(iii) site acquisition, site development, and preparation for new School District buildings and facilities;

89,855.00

89,855.00

(iv) acquiring and installing system-wide technology, safety, instructional and administrative technology, safety and security and security equipment;

1,000,000.00

1,000,000.00 $

123,918.08

98,148.94

(v) acquiring textbooks, school furnishings, school buses, vehicles and transportation equipment;

900,000.00

900,000.00

(vi) acquiring any necessary property, both real and personal (the "Projects");

500,000.00

500,000.00

(vii) paying costs incident to accomplishing the foregoing.

100,000.00

316,967.48

316,967.48

$ 10,000,000.00 $ 26,548,298.46 $

155,918.08 $ 23,124,592.40

$ 22,000,000.00 $ 39,040,501.93 $

232,810.99 $ 29,800,968.93

TOTAL COMPLETION
COST

EXCESS PROCEEDS NOT
EXPENDED

ESTIMATED COMPLETION
DATE
9/30/2012 (5)
3/31/2015 3/31/2015
3/31/2015 3/31/2015 3/31/2015 3/31/2015 3/31/2015 3/31/2015 3/31/2015
9/30/2012
3/31/2018 3/31/2018
3/31/2018 3/31/2018 3/31/2018 3/31/2018

(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax.

(2) The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion.

(3) The voters of Wilkinson County approved the imposition of a 1% sales tax to fund the above projects and retire associated debt. Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the projects.

(4) In addition to the expenditures shown above, the School District has incurred interest to provide advance funding for the above projects as follows:

(5) Expenditures for the Primary/Elementary School Building will require the passing of two more SPLOST referendums to retire bond debt.

Prior Years

$ 3,238,476.73

Current Year

883,567.00

Total

$ 4,122,043.73

See notes to the basic financial statements.

- 44 -

WILKINSON COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)
ALLOTMENTS AND EXPENDITURES BY PROGRAM YEAR ENDED JUNE 30, 2015

SCHEDULE "10"

DESCRIPTION
Direct Instructional Programs Kindergarten Program Kindergarten Program-Early Intervention Program Primary Grades (1-3) Program Primary Grades-Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades-Early Intervention (4-5) Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category II Category III Category IV Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL)
TOTAL DIRECT INSTRUCTIONAL PROGRAMS
Media Center Program Staff and Professional Development

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

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

$

518,822.00 $ 666,068.79 $ 5,604.12 $ 671,672.91

104,898.00

62,924.46

62,924.46

1,398,238.00 1,011,680.34

15,391.63

1,027,071.97

468,664.00

201,511.69

201,511.69

561,376.00

791,700.20

9,158.75

800,858.95

237,303.00

213,196.07

213,196.07

1,202,783.00 1,778,082.99

26,725.88

1,804,808.87

985,884.00 1,484,158.23

17,240.15

1,501,398.38

386,775.00

248,454.66

7,852.00

256,306.66

1,058,348.00

695,157.12

695,157.12

522,701.43 121,456.92

644,158.35

61,728.74

36,393.85

98,122.59

79,373.00

620.97

1,209.66

1,830.63

24,370.00

1,072.47

1,072.47

85,762.00

153,709.15

153,709.15

51,525.00

5,918.07

5,918.07

7,164,121.00 7,897,612.91 242,105.43

8,139,718.34

200,012.00 31,199.00

196,401.22 11,937.23

28,736.69 63,688.96

225,137.91 75,626.19

TOTAL QBE FORMULA FUNDS

$

7,395,332.00 $ 8,105,951.36 $ 334,531.08 $ 8,440,482.44

(1) Comprised of State Funds plus Local Five Mill Share. (2) Allotments do not include the impact of the State amended formula adjustment.

See notes to the basic financial statements.

- 45 -

(This page left intentionally blank)

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

(This page left intentionally blank)

Greg S. Griffin
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
October 19, 2016

Honorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Wilkinson County Board of Education
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited, 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, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Wilkinson County Board of Education as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise Wilkinson County Board of Education's basic financial statements, and have issued our report thereon dated October 19, 2016.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered Wilkinson County Board of Education's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Wilkinson County Board of Education's internal control. Accordingly, we do not express an opinion on the effectiveness of the Wilkinson County Board of Education's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

2015YB-30

(This page left intentionally blank)

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. We did identify a certain deficiency in internal control, described in the accompanying Schedule of Findings and Questioned Costs as item FS 2015-001, that we consider to be a significant deficiency.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Wilkinson County Board of Education's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
We noted certain matters that we have reported to management of Wilkinson County Board of Education in a separate letter dated October 19, 2016.
Wilkinson County Board of Education's Response to Findings
Wilkinson County Board of Education's response to the findings identified in our audit is described in the accompanying Schedule of Findings and Questioned Costs. Wilkinson County Board of Education's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Respectfully submitted,

GSG:cb 2015YB-30

Greg S. Griffin State Auditor

(This page left intentionally blank)

Greg S. Griffin
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
October 19, 2016

Honorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Wilkinson County Board of Education

INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133

Ladies and Gentlemen:

Report on Compliance for Each Major Federal Program

We have audited Wilkinson County Board of Education's compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2015. Wilkinson 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.

Management's Responsibility

Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs.

Auditor's Responsibility

Our responsibility is to express an opinion on compliance for each of Wilkinson County Board of Education's major federal programs based on our audit of the types of compliance requirements referred to above. 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 A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types 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 on compliance for each major federal program. However, our audit does not provide a legal determination of Wilkinson County Board of Education's compliance.

2015SA-10

(This page left intentionally blank)

Opinion on Each Major Federal Program
In our opinion, the Wilkinson County Board of Education complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2015.
Report on Internal Control over Compliance
Management of Wilkinson County Board of Education is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered Wilkinson County Board of Education's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Wilkinson County Board of Education's internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose.
Respectfully submitted,

GSG:er 2015SA-10

Greg S. Griffin State Auditor

(This page left intentionally blank)

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

(This page left intentionally blank)

WILKINSON COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2015
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
No matters were reported.
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.

(This page left intentionally blank)

SECTION IV FINDINGS AND QUESTIONED COSTS

(This page left intentionally blank)

WILKINSON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2015

I SUMMARY OF AUDITOR'S RESULTS

Financial Statements

Type of auditor's report issue: Governmental Activities; General Fund; Capital Projects Fund; Debt Service Fund; Aggregate Remaining Fund Information

Internal control over financial reporting: Material weakness identified? Significant deficiency identified?

Noncompliance material to financial statements noted:

Federal Awards

Internal Control over major programs: Material weakness identified? Significant deficiency identified?

Type of auditor's report issued on compliance for major programs: All major programs

Any audit findings disclosed that are required to be reported in accordance with OMB Circular A-133, Section 510(a)?

Identification of major programs:

CFDA Numbers Name of Federal Program or Cluster

84.010 10.553, 10.555

Title I, Part A Child Nutrition Cluster

Dollar threshold used to distinguish between Type A and Type B programs:

Auditee qualified as low-risk auditee?

Unmodified No Yes No
No None Reported
Unmodified No
$300,000.00 No

-1-

WILKINSON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2015

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FS 2015-001 Control Categories:
Internal Control Impact: Compliance Impact:

Inadequate Internal Control Procedures over School Activity Accounts Cash and Cash Equivalents Revenues/Receivables/Receipts Expenditures/Liabilities/Disbursements Significant Deficiency None

Description: The accounting procedures of the School District were insufficient to provide for adequate internal controls over the school activity accounts.

Criteria: The School District's management is responsible for designing and maintaining internal controls that provide proper separation of duties and reasonable assurance that transactions are processed according to established procedures.

Condition: The following errors were noted with the School District's school activity accounts:

Cash and Cash Equivalents The School District did not have adequate internal controls in place to ensure that the bank reconciliation function was separate from the record keeping function. Two bank reconciliations were not reconciled in a timely manner. The timeliness of two bank reconciliations could not be determined because they were not dated or signed by the preparer.

Revenues/Receivables/Receipts The School District did not have adequate internal controls in place to ensure proper separation of duties and proper documentation of receipts. During a test of twenty five receipts, the following problems were noted: o Adequate receipt documentation was not maintained for twelve deposits tested; o Two gate reconciliations did not reflect evidence of supervisory review or approval and one basketball camp receipt packet had no sponsor, preparer or supervisor signature; o Two receipts were not deposited in a timely manner; o Two receipts were deposited by the same person who received the funds.

Expenditures/Liabilities/Disbursements The School District did not have adequate internal controls in place to ensure proper separation of duties and to ensure expenditures were properly approved, adequately documented and the purchase policies of the School District were followed. During a test of twenty seven disbursements, the following problems were noted: o Eight expenditures did not have evidence of receipt of goods; o Three expenditures did not have an invoice or supporting documentation for the amount paid; o Three expenditures were incurred in the prior year but were paid in the period under review; o One expenditure was not approved. Auditor noted four employees that were paid volunteering stipends through purchased professional services vendor checks from the boys basketball account.

-2-

WILKINSON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2015
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
Cause: In discussing this deficiency with the School District, they stated that the errors were made due to the school employees not following the School District's policies and procedures. In addition, the schools do not have adequate personnel in order to be able to separate the duties.
Effect or Potential Effect: Errors and/or irregularities were not detected in a timely manner.
Recommendation: The School District should implement necessary procedures to ensure that the key accounting functions of custody and record keeping are separated. In addition, the School District should implement procedures to ensure that disbursements and receipts of funds within the school activity accounts are adequately documented and recorded in the financial records. The School District should evaluate payments made to employees through purchased professional services vendor checks for compliance with guidelines of the Internal Revenue Service (IRS). The employees should have been paid through the normal payroll process for these extra duties being performed, and the School District should consult with the IRS to determine whether any additional payroll taxes are owed on the amounts paid. The School District should also establish a monitoring process to provide reasonable assurance that transactions are processed according to established procedures.
Views of Responsible Officials and Corrective Action Plans: We concur with this finding. The majority of this finding relates to School Activity accounts. On August 19, 2016 we met with the principals and bookkeepers from all schools to remind them of all procedures that are in place and to make sure that everyone is following them. We also discussed the importance of the controls that are in place. We addressed the issues of timely reporting, timely deposits, proper documentation for expenditures and receipts and once again stressed the importance of employees not being paid for any reason out of school activity accounts (it must go through payroll). As a follow up from the meeting, the finance director is making monthly phone calls to the bookkeepers as a reminder of the meeting and asking if anyone has any questions or concerns. Because of the monthly phone calls and the staff meeting, we believe that the procedures will be adhered to more closely going forward.
Contact Person: Kathy L. Jackson, Finance Director Telephone: 478-946-5521 Ext 223 E-mail: Kathy.jackson@wilkinson.k12.ga.us
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
-3-