Audit report, Worth County Board of Education, Sylvester, Georgia, year ended June 30, 1998

AUDIT REPORT WORTH COUNTY BOARD OF EDUCATION
SYLVESTER, GEORGIA YEAR ENDED JUNE 30, 1998

WORTH COUNTY BOARD OF EDUCATION -TABLEOFCONTENTS-

SECTION I

FINANCIAL

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

EXHIBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS _

6

D

STATEMENT OF REVENUES, EXPENSES AND

CHANGES IN FUND BALANCES

FIDUCIARY FUND TYPE NONEXPENDABLE TRUST FUND

7

E

STATEMENT OF CASH FLOWS

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND

9

F NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

10

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

G

COMBINING BALANCE SHEET

22

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

23

CAPITAL PROJECTS FUND

I

COMBINING BALANCE SHEET

24

J

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

25

DEBT SERVICE FUND

K

COMBINING BALANCE SHEET

26

L

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

27

WORTH COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS-

SECTION I

FINANCIAL

ADDITIONAL FINANCIAL INFORMATION

SCHEDULES

1 SCHEDULE OF REQUIRED SUPPLEMENTARY INFORMATION

28

2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

29

3 SCHEDULE OF STATE REVENUE

31

4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

32

5 SCHEDULE OF EXPENDITURES

LOTTERY PROGRAMS

33

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

6

OVERALL

35

7

BY PROGRAM

36

SECTIONll
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-l33

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

SECTIONN FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

RUSSELL W. HINTON
STATEAUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
June 9,1999

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Worth County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATIONSCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general purpose financial statements of the Worth County Board of Education, as of and for the year ended June 30, 1998, as listed in the table of contents. These general purpose financial statements are the responsibility of the Worth County Board of Education's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in the notes to the general purpose financial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:
The general purpose frnancial statements of the Board did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles,

98ARL-13B

* The Board did not report compensated absences within the general purpose financial statements as
required by generally accepted accounting principles.
* School activity accountsmaintained at the individualschools are not included in the general purpose
financial statements. To conform to generallyaccepted accountingprinciples,these accounts should be included in the general purpose fmancial statements.
The aggregate effects on the general purpose fmancial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements referred to above present fairly, in all material respects, the fmancialposition of the Worth County Board of Education as of June 30,1998, and the results of its operations and the cash flows of its nonexpendable trust fund for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards. we have also issued our report dated June 9, 1999, on our consideration of the Worth County Board of Education'sintemal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants.
The year 2000 supplementary information on Schedule "I" is not a required part of the basic financial statements but is supplementaryinformationrequiredby the GovernmentalAccounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods ofmeasurement and presentation of the supplementaryinformation. However we did not audit the information and do not express an opinion on it. In addition, we do not provide assurance that Worth County Board of Education is or will become year 2000 compliant, that the Board's year 2000 remediation efforts will be successful in whole or in part, or that parties with which Worth County Board of Education does business are or will become year 2000 compliant.
Our audit wasperformed for thepurpose offorming an opinion on the general purpose financial statements of the Worth County Board of Education taken as a whole. The accompanying combining statements (Exhibits G through L) and the financial schedules (Schedules 2 through 7), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, AuditsofStates. LocalGovernments. andNon-Profit Organizations. are presented for purposes of additional analysis and are not a required part of the general purpose financial statements. Such information hasbeen subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and in our opinion, except for the effects of the matters referredto in the third paragraph, such information is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole.
98ARL-13B

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,
~" QeW.~~ Russell W. Hinton State Auditor
RWH:jb 98ARL-13B

WORTHCOUNTYBOARDOF EDUCAnON

The notesto the general purposefinancial statementsare an integralpart of this statement. -2-

EXHIBIT "A"

DEBT SERVICE
FUND
199,259.08

FIDUCIARY FUND TYPES TRUST FUND
1,442.91

ACCOUNTGROUP GENERAL
LONG-TERM DEBT

TOTALS

(Memorandum Only)

JUNE 30,1998

JUNE 30, 1997

$ 2,514,808.18

3,186,016.91

1,674,743.16

2,754,851.47

2,661,146.59

$

199,259,08

2,360,740,92

1,256.74 14,539.64 199,259.08
2,360,740.92

1,153.38 15,786.94 164,262.60
2495,737.40

199,259.08 $

1:442.91

2,560,000.00

9,520,199.19

8,544,103.82

$

2.580.000.00

$

2.580 000.00

449,944.14 $ 2,315,967,71
7,299,20 119,775.33 88,105.24
2,580,000.00
5,539.091.82

435,264,03 2,164,477,70
3.664.71 71,679.50
13.490,00 2.680.000,00
5388595,94

$

199.259.08

$

0.00

$

199259.08 $

$

199,259.08 $

1,000.00
442.91 1.442.91

$

137,159,00

1021

199,259.08 1,000.00

1,258.74 14,539.64 142.190.66

45,752,85 2,546.26
3437,391.13
3,981107.57

164.262,60 1,000.00
1,153.38 15,786.94 22,363.00 49,400.85 2,881,541.11 3,155,507.88

1,442.91 $

2.580.000.00

9,520199.19 $ 8.544.103.82

-3-

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

REVENUES
State Funds Federal Funds Taxes O1her Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Sarvices General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation services Central Support Services O1her Support Services Food Services Operation Community services Operations
Capital Outlay Debt Service
Principal Interest Paying Agent Fees
Total Expenditures
Excessof Revenues over (under) Expenditures
OTHER FINANCING SOURCES IUSES)
Operating Transfers In Operating Transfers Out
Total O1her Financing Sources (Uses)
Excess of Revenues and O1her Financing Sources over (under) Expenditures and O1her Financing Uses
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

$ 16,950,496.63 $ 39,387.36
3,247,011.79 307.081.98
$ 20.543,977.76 $

805,530.73 2,901,344.26
428,541.16
4,135,416.15

$ 12,989,177.13 $
1,094,382.56 544,606.74 512,442.03 218,294.52
1,687,358.35 201,723.55
1,430,310.36 1,128,590.17
118,788.87 11,890.74

1,602,703.86
122,346.21 97,083.84 8,604.58
143,477.06
22,597.96 32,469.62
204,193.30 1,758,765.15
48,343.84

$ 19.937.565.02 $

$

606,412.74 $

4,040,584.22 94.831.93

$

$

-866,363.21

$

-868,363.21 $

$

-259,950.47 $

2,097,977.02

6,639.82
6,639.82
101,471.75 682,282.63
103.36 -1,247.30

FUND BALANCE JUNE 30

$

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

-4-

1,838,026.55 $

782,610.44

EXHIBIT"B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE30, 1998

JUNE30, 1997

$

421,988.00

586,666.10 $ 5,009,05

$

1,013,663.15 $

$
317,141.26 2,347.05
319,466.31 $

18,178,015.36 $ 2,940,731.62 4,150,819.15
742,979.24
26,012,545.37 $

17,190,474.07 2,969,288.64 3,647,572.67 692,696.66
24,500,232.44

$ 14,591,660.99 $ 13,716.079.79

$

903,153.31

1,216.727,77 641,690.58 521,046.61 361;771.56
1,687,358.35 201,723,55
1,452,906,32 1,161,059,79
118,786,87 216,084.04 1,756,765.15
48,343,64 903,153.31

1,076.518.69 636,255.66 474,666.59 361,154.41
1,475,177,06 232,274,51
1,457,528,75 1,455,152.56
122,014.81 259,229.59 1,786,612.84 60,324.15 1,489,911,76

$

120,000.00

183,815.00

676.83

120,000.00 183,815.00
676,83

115,000,00 191,395,00
663.05

$

903,153.31 $

304.491.83 $ 25.185.794.38 $ 24,930,159.42

$

110.509.84 $

14,996.48 $

826,750.99 $

-"129.926.98

$

859,723.39

$

859.723.39

$

866,363.21 $

-866,363.21

$

0.00 $

92,068.57 -92.068.57
0.00

$

970,233.23 $

14,996.48 $

826,750.99 $

-"129,926,98

189,535.36

184,262.60

3,154,057.61

3,561,655.19

103.36 -1.247.30

-1,392.01 3.721.41

$

U59,768.59 $

1.99,259.08 $ 3,979,664.66 $ 3,154p57.61

-5-

WORTH COUNTY BOARD OF EDUCATION COMBINED SIATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - <NON-GAAPBASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30 1998

EXHIBIT"C"

~
State Funds Federal Funds Taxes Other Funds
TotalRevenues
EXPENDITURES
Current Instruction Support seNlce. Pupil seNices Improvement of Instructional Services Educational Media services GeneralAdministration School Administration Business Administration Maintenance and Operation of Plant Student Transportation SeNices Central Support seNice. Other Support $eNices Food seNices Operation Community seNices Operations
Gepltel OUtiay
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES fUSES)
Other Sources QtherUses
Totel Other Financing Sources (Uses)
Exceos of Revenues end Other Flnencln9 Sources over (under) Expenditures end Other F1nandng uses
FUNp BALANCE JULY 1 1997
Adjustments Food Inven10fy - Net Change In Period Donated Commodllles Purchased Food

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

16.179.356.00 $ 3,000.000.00

16,950,496.63 39.387.36
3.247.011.79 307.081.98

19,179,358.00 $ 20,543.977.76

12,941,728.00 $ 12,969.177.13

1,016,559.00 623,681.00 508,447.00 277,077.00
1,515,145.00 189,451.00
1,533,003.00 1,323,950.00
118,317.00 21,281.00

1,094,382.56 544,606.74 512,442.03 218,294.52
1,687,358.35 201,723.55
1,430,310.36 1,128,590.17
118,788.87 11,890.74

3,000.00

20,071,639.00 $ 19,937,565.02

~92,281.00 $

606,412.74

~,400.00 $ ~,400.00 $

~,363.21 ~,363.21

-1.396,881.00 $ 2,255,728.15

-259,950.47 2,097,977.02

FUND BALANCE JUNE 30 1998

$

659,047.15 $ 1,838,026.55

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

851,694.00 $ 2,691,263.00
365,000.00
3,907,957.00 $

805,530.73 2,901,344.26
428,541.16
4,135,416.15

1,468,728.00 $
121,302.00 86,868.00 7,000.00
127,770.00

1,602,703.86
122,345.21 97,083.84
8,604.58 143,477.06

10.100.00 725.00
216.816.00 1,802,752.00
76.896.00

22,597.96 32,469.62
204,193.30 1,758,765.15
48,343.64

$ 3,918,957.00 $ 4,040,564.22

$

-11,000.00 $

94,831.93

$

6,639.82

6,639.82

$

-11,000.00 $

101,471.75

638,228.96

682,282.63

65,719.27

103.36 -1,247.30

692,948.23 $

782,610.44

The notesto the generalpurpose financial statements are an Integral partof this statement. -6-

WORTH COUNTY BOARD OF EDUCATION

EXHIBIT "D"

STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCES

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND

YEAR ENDED JUNE 30,1998

OPERATING REVENUE None Recorded
OPERATING EXPENSES Current Ins1ruction Operating Income (Loss)
NONOPERATING REVENUES Interest Earned Net Income (Loss)
FUND BALANCE JULY 1
FUND BALANCE JUNE 30

CHASES. OSBORN
FUND

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

$

0.00 $

0.00 $

=0.=00_

$

50.00 $

50.00 $

50.00

$

-50,00 $

-50,00 $

-50,00

42,64

42.64

42.83

$

-7,36 $

-7,36 $

-7.17

1,450.27

1,450.27

1,457.44

$

1,442.91 $

1,442,91 $

1,450,27

The notes to the general purposefinancial statementsare an integralpart of this statement. -7 -

WORTH COUNTY BOARD OF EDUCATION STATEMENT OF CASH FLOWS
FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND YEAR ENDED JUNE 30 1998

EXHIBIT"E"

Cash Flows from Operating Actlvitles: Cash Paid for Scholarships
Cash Flows from Investing Activities: Interest Received on Investments
Net Increase (Decrease) in Cash Cash and Cash Equivalents - July 1
Cash and Cash Equivalents - June 30

CHASES. OSBORN
FUND

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

$

-50.00 $

-50.00 $

-50.00

$

42.64 $

42.64 $

42.83

$

-7.36 $

-7.36 $

-7.17

1,450.27

1,450.27

1,457.44

$

1,442.91 $

1,442.91 $

1,450.27

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

WORTH COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 3D. 1998

Note 1: SUMMARY OF SIGNIFICANTACCOUNTING POLICIES

REPORTING ENTITY

The Worth County Board of Education (Board) 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 Board is a primary governmentand consists of all the organizations that compose its legal entity.

FUND ACCOUNTING

The Board uses funds and an account group to report on its financialposition and the results of its operations. Fund accountingis designedto demonstratelegal complianceand to aid financialmanagementby segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountabilityfor certain assets and liabilitiesthatare not recorded in the funds because they do not directly affect expendable available financial resources.

General Fixed Assets are recorded as expenditures in the various funds at the time ofpurchase. A General

Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted

accounting principles,a GeneralFixed Assets AccountGroup shouldbe maintained for reporting the cost of

assets acquired by governmental fund types.

.

Although "school activity accounts"are maintainedat the individualschools,neitherthe assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements.

The general purpose financial statements account for all State, Federal,Taxes and Other funds under control of the Board, in compliancewith generallyacceptedaccountingprinciples applicable to governmental units, unless otherwisedisclosed in these notes. Funds and the accountgrouppresentedin this report are as follows:

GOVERNMENTAL FUND TYPES - are used to accountfor all or most ofa Board's educationalactivities. Governmental Fund Types include:

GENERALFUND - the fund used to accountfor all financialresourcesof the Board except those required to be accounted for in another fund. These transactionsrelateto resources obtained and used for services provided by a board of education.

SPECIALREVENUE FUND- the fund used to accountfor the proceedsof specificrevenuesources (other

than for major capital projects) that are legally restricted to expenditures for specified purposes. These

funds are received primarily from the GeorgiaDepartmentof Educationand from the Federal government

to accomplish specific educational objectives.

.

-10 -

WORm COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIALSTATEMENTS

JUNE30. 1998

Note 1: SUMMARY OF SIGNIFICANTACCOUNTINGPOLICIES
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
DEBT SERVICEFUND - the fund used to accountfor the accumulationof resourcesfor, and the payment of, general long-term principal, interest and paying agent fees.
FIDUCIARY FUND TYPE - the fund used to account for assets held by a government unit in a trustee capacityor as an agent for individuals,privateorganizations, other governmentunits and/or other funds. This fund includes:
NONEXPENDABLETRUSTFUND Chase S. Osborn Fund - the fund usedto accountfor an endowmentof which the corpus is to be invested and preserved intact with the resultantincometo be used to providean award to the Worth County School System spelling champion.
ACCOUNT GROUP
GENERAL LONG-TERMDEBT ACCOUNTGROUP- A financialreportingdeviceused to account for general obligation debt outstanding.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmentalfunds are accountedfor using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmentalfunds. Other liabilities,which are not expectedto be financedfrom available spendable resources, are reported in the General Long-Term Debt Account Group.
All nonexpendabletrust funds are accountedfor on a flow ofeconomicresources measurement focus. With this measurementfocus, all assets andliabilitiesassociatedwith the operationofthese funds are included on the balance sheet. Operating statements present increases (e.g., revenues) and decreases (e.g., expenses) in net total assets.
Governmental funds are accounted for using the modified accrual basis of accounting under which:

- 11 -

WORTH COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Those revenues considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income.
Expenditures are generally recognized when the related fund liability is incurred.
A substantial number of personnel of the Board were employed for a one hundred and ninety day period beginning in late August of 1997 and ending in early June 1998. Employment contracts for these employment periods typically specify that compensation be paid in twelve equal monthly payments beginning in September 1997 and ending in August 1998. State grants to fund the State's share of these contracts are disbursed to the Board in the same twelve month period. In accordance with generally accepted accounting principles, salary and fringe benefit expenditures and the related revenue from the State to fund these contracts are recorded in the fiscal period covered by these financial statements.
The accrual basis of accounting, as required by generally accepted accounting principles, is utilized by nonexpendable trust funds. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred.
BUDGET
The Worth County Board of Education's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure ofthe budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the
aggregate level. The budget for governmental funds wasprepared on a basis other than generally accepted
accounting principles.
The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting ofthe Board afteradvertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.

- 12-

WORTII COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO TIIE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Board in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. 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 Board to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(l) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation ofthe United States government,
(5) Prime banker's acceptances,
(6) The LocalGovernment Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia.
RECEIVABLES
Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when
- 13 -

WORTH COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30.1998

Note 1; SUMMARY OF SIGNIFICANT ACCOUNTING POUCIES

either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

PROPERTY TAXES

The Worth County Board of Commissioners fixed the property tax levy for the 1997 tax year (calendar year) on September 25, 1997 (levy date). Taxes were due on December 20, 1997. The lien datefor property taxes was January 1, 1997. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1998. The Worth County Tax Commissioner bills and collects the property taxes for the Board of Education, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance of taxes collected to the Board.

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

School Operations

~mills

SALES TAXES

Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $891,157.93 and was recorded in the Capital Projects Fund. The State will terminate collection of this tax once an additional $8,895,842.07 has been collected or on September 30, 2002 whichever occurs first.

INVENTORIES

FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time of purchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.

- 14-

WORTH COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
COMPENSATED ABSENCES
Compensated absences represent obligations of the Board relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion of this obligation as this amount is deemed immaterial to the general purpose financial statements.
However, the dollar value of accumulated compensated absences at June 30, which will be payable from future resources is material to the general purpose financial statements and has not been recorded in the General Long-Term Debt Account Group as required by generally accepted accounting principles.
GENERAL OBLIGATION BONDS
The Board issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit of the government The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group.
INTERFUND TRANSACTIONS
The Board has the following types of interfund transactions:
Reimbursements of expenditures/expenses initially made from a fund that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed.
Operating transfers are recorded for all interfund transactions other than reimbursements.
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations or cash flows in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.

- 15 -

WORTH COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 2: DEPOSITS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value ofsecurities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction of the amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of anyone of or any combination of the following:
(1) 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 ofthe counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by thelaws ofthe 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 and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS At June 30, 1998, the bank balances were $6,121,894.84. The amounts of the total bank balances are classified into three categories of credit risk:
Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the Board or by the Board's agent in the Board's name.
- 16 -

WORTH COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 2: DEPOSITS

Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Board's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trnst department or agent but not in the Board's name.)

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

Risk Category

Bank Balance

1

$ 300,000.00

2

5,735,154.62

3

86.740.22

Total

$612189484

Note 3: NON-MONETARY TRANSACTIONS

The Board receives food commodities from theUnited States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities arerecorded at their Federally assigned value. See Note 1 - Inventories

Note 4: RISK MANAGEMENT

The Board is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; natural disaster and unemployment compensation.

The Board has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions and job related illness or injuries to employees. However, the errors or omissions policy excludes coverage for sexual harassment and discrimination. The Board has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any of the past three years.

The Board has elected to self-insure for all losses related to natural disaster. The Board has not experienced any losses related to this risk in the past three years.

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

- 17 -

WORTH COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

1UNE30 1998

Note 4' RISK MANAGEMENT

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

1997 1998

Beginning of Year Liability

Claims and Changes in Estimates

s s

000 s 275600 s

400200 s s 904200

Claims Paid

End of Year Liability

1246.00 s 4268.00 s

2756.00 7530.00

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

Posjtion Covered

Superintendent Principals
Note 5' GENERAL LONG-TERM DEBT

$ 20,000.00 $ 5,000.00 - $ 10,000.00

GENERAL OBUGATION BONDS OUTSTANDING General Obligation Bonds currently outstanding are as follows:

Puxpose

Interest Rates

General Government - Series 1990

6.40"10 - 7.25% $ 2 560 000.00

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

Balance July 1,1997
Deductions Payments
Balance June 30, 1998

General Obligation
Bonds $ 2,680,000.00
120.00000 $ 2.560 000 00

- 18 -

WORTH COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO TIlE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 5' GENERAL LONG-TERM DEBT

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

Fiscal Year
Ended June 30

General Obligation
Bonds

1999 2000 2001 2002 2003 2004 - 2008 2009 - 2011
Total Principal and Interest
Note 6' ON-BEHALF PAYMENTS

$ 219,957.50 306,335.00 307,290.00 307,430.00 306,812.50
1,547,672.50 91814750
s3 913 645 00

TheBoard hasrecognized revenues and expenditures in the amount of$423,273.56 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies.

Georgia Department ofEducation Paid to the State Merit System of Personnel Administration For Health Insurance of Non-Certified Personnel In the amount of $344,702.92

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (IRS) Employer's Cost In the amount of$13,142.64

Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $65,428.00

Note 7' SIGNIFICANT COMMITMENTS

Thefollowing is an analysis of significant outstanding construction or renovation contracts executed by the Board as of June 30, 1998, together with funding available:

- 19 -

WORTH COUNTY BOARD OF EDUCATION

EXHffiIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE30. 1998

Note 7: SIGNIFICANT COMMITMENTS

Project

Unearned Executed Contracts

Funding Available From State

97-759-042

$ 36275562 $ 4321220

The amounts described in this note are not reflected in the general purpose financial statements.

Note 8: CONTINGENT LIABILITIES

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

The Board was a defendant in a legal proceeding pertaining to a matter incidental to the performance of routine Board operations. The ultimate disposition of this proceeding was resolved in the subsequent fiscal year and was not material to the general purpose financial statements.

Note 9: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (IRS)

TRS PLAN DESCRIPTION Substantiallyall teachers,administrativeand clericalpersonnelemployedby local school systemsare covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

TRS CONTRffiUTIONS REQUIRED AND MADE Employeesofthe Board who are coveredby TRS arerequiredby State statuteto contribute5% of their gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordancewith State statuteand as advisedby their independentactuary. The required employercontribution rate is 11.81% and employercontributionsfor the currentfiscalyear and the preceding two fiscal years are as follows:

- 20-

WORTH COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

ruNE 30,1998

Nore9: RETIREMENT PLANS
Fiscal Year
1998 1997 1996

Percentage Contributed
100% 100% 100%

Required Contribution
$ 1,659,200.23 $ 1,524,980.66 $ 1,420,805.69

- 21 -

WORTH COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30 1998

EXHIBIT"G"

ASSETS
Cash and Cash Equivalents
Invesbnents
Accounts Receivable
Inventories Food Donated Commodities Purchased Food

SCHOOL FOOD
SERVICES FUND
$ 882.524.07
224.743.15
22,465.04

LOTTERY PROGRAMS
54,205.37

FEDERAL PROGRAMS
272,487.06

TOTALS JUNE 30, 1998 JUNE 30, 1997

745.729.44

831,030.55

224.743.16

294,952.10

468,478.14

1.256.74 14.539.54

1.256.74 14.539.54

1.153.38 15.786.94

Total Assets

$ 945.528.65 $ 54,205.37 $ 272,487.06 $ 1.282.221.08 $ 1.316,449.01

LIABILITIES AND FUND EQUITY
~
cash Overdraft Accounts Payable salaries Payable Expired Grant Balances Payable DelamKI Revenua

$ 59.869.54 101.089.34 4.517.70

Total Liabllllies FUNPEQUITY

165.476.68

Fund Balances

Reserved

For Continuation of Federal Programs

Food

Donated Commodllles

$

Purchased Food

Unraserved

Designated for Georgia Academy Contract

Undeslgnaled

1.256.74 14.539.54
754,255.59

Total Fund Equity

780,051.97

12.340.87 51.864.50
54.205.37

89,549.59 41,374.30 138.047.90
856.80
269.928.59 $

89.549.59 113.554.81 291.001.74
5.374.50
499,610.54 $

219.115.89 118.715.26 279.180.52
3.654.71 13.490.00
634.166.38

$
0.00 0.00 $

10.21 $
2.548.26 0.00
2,556.47

10.21
1.256.74 $ 14.539.54
2.548.26 754.255.59
. 782.610.44

1.153.38 15.786.94
665.342.31 682.282.83

Total U8bllities 8nd Fund Equty

945.528.85 $ 54.205.37 $ 272.487.06

1.282.221.08 $ 1,316.449.01

See nolesto the general purpose financlal statements.

-22 -

WORTH COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30 1998

EXHIBIT"H"

REVENUES
StateFunds FederalFunds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil services Improvement of Instructional Services Educational MediaServices GeneralAdministration Maintenance andOperation of Plant Student Transportation services Olller Support 5ervices Food services Operation Community Services Operations
Total Expenditures
Excess of Ravenuas over (under) Expenditures
OTHER FINANCING SOURCES
Operating Transfars In
Excess of Revenues and Other FInancing Sources over (under) Expendilures
FUND BALANCE JULY 1
Food Inventory - Net Change In PerIod Donated Commodities Pur1:hased Food

SCHOOL FOOD
SERVICES FUND

LOTIERY PROGRAMS

FEDERAL PROGRAMS

TOTALS YEAR ENDED JUNE 30. 1998 JUNE 30. 1997

115,576.00 $ 641.095.01 $ 48.859.72

1.371,921.45

1.529.422.81

363,641.16

65.000.00

1.851.038.61 $ 641.095.01

1.643.282.53

805.530.73 2,901.344.26
428.641.16
4.135,416.15

865.635.44 2.904.268.13
366.966.58
4.136.890.15

1.758,765.15

513.030.07
57.252.57 3.142.81
30.197.46 21.920.84 15,551.26

$ 1.758.785.15

641,095.01

$ 92,273.46 $

0.00

1,089.673.79

1.602.703.86

65.092.64 93.941.03
8.604.58 113.279.60
677.12 16,918.36 204.193.30
48,343.64

122.345.21 97,083.84 8.604.58
143.477.06 22.597.96 32.469.62
204,193.30 1.758,765.15
48,343.64

1.640,724.06 $ 4.040,584.22

2,558.47 $

94,831.93

1,534.008.58
130.960.76 104.661.03
5.723.74 162.241.77
3.237.59 46.732.25 233.985.80 1.766.812.84 60.324.15
4.068.688.51
68.201.64

6,639.82
98.913.26 682,282.63
103.36 -1,247.30

0.00 $ 0.00

2.558.47 0.00

6,639.82
101,471.75 682,282.63
103.36 -1,247.30

4.872.72
73,074.36 606,878.87
-1,392.01 3,721.41

FUND BALANCE JUNE 30

$ 760,051.97 $

0.00 $

2,558.47

782,610.44 $ 682.282.63

See notesto the general purpose financial statements.

-23 -

WORTH COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30 1998.

EXHIBIT "I"

ASSETS Cashand CashEquivalents Accounts Receivable

REGULAR 1,017,577.93

SPECIAL PURPOSE LOCAL OPTION SALES TAX
215989.40

LOTIERY PROJECT
162,771.37
43,212.20

TOTALS

JUNE 30, 1998

JUNE30 1997

1,180,349.30

231,966.39

259,201.60

30248.47

Total Assets

1,017577.93

215989.40 $

205983.57 $ 1 439,550.90

252214.98

LIABILITIES AND FUND EqUITY
LIABILITIES
cash Oventraft Accounts Payable ContractsPeyable Retainagas Peyable
Total Liabilities
FUND EQUITY
FLI1dBelances ReseMld For SPLOST Projects For Sla1e capi1a1Outlay Projects Unreserved Undesignated
Total Fund Equity
Total Liabilities and Fund Equity

69,802.63 3,996.11
73798.74 $

103.00 119,775.33
86105.24
205983.57

69,802.63 4,099.11
119,775.33 86105.24
279782.31

1,000.00 71,679.50
72679.50

1017577.93 1017577.93 $

142,190.66
0.00 142190.66 $

$
0.00 0.00

142,190.66 $
1,017577.93
1159768.59 $

22,363.00 167172.36 189535.36

1017577.93 $

215989.40 $

205,983.57

1439550.90 $

262,214.86

See notestothe generalpurpose financial statements.

-24-

WORTHCOUNTYBOARDOF EDUCATION COMBININGSTATEMENTOF REVENUES EXPENDITURES AND CHANGESIN FUND BALANCES
CAPITAL PROJECTSFUNp YEAR ENDEDJUNE 30 1998

EXHIBIT"J"

REGULAR

SPECIAL PURPOSE LOCAL OPTION SALES TAX

LOTTERY PROJECT

TOTALS YEAR ENDED JUNE 30,1998 JUNE 30 1997

~
StateFunds Taxes OtherFunds
Total Revenues

405.57 405.57

586,666.10 4603.48
591269.58 $

421,988.00 $ 421988.00 $

421,988.00 $ 586,666.10
5009.05
s 1013663.15

36,962.47 3510.94
40473.41

EXPENDITURES

Capital Outlay Rents OtherPurchased Services Supplies Land and Land Improvements Building and Building Improvements Equipment

$

0.00

500.00

17,907.00

1,907.45

$

2,601.50

2,601.50

3,495.00

26,220.59

874,331.22

900,551.81 1,462,263.31

3,839.00

Total Expenditures

0.00 $

26,220.59 $ 876932.72

903153.31

1489,911.76

Excess 01Revenuesover (under) Expenditures

405.57 $

565048.99 $ -454,944.72

110509.84 -I 449438.35

OTHER FINANCINGSOURCES(USES>

OparatingTransfers In OparatingTransfers OUt

850,000.00 $

$ 432,581.72 $ 1,282,581.72 $

-422 858.33

-422 858.33

87,195.85

Total Other Financing Sources(Uses)

850000.00 $ -422 858.33 $ 432581.72 $ 859723.39 $

87,195.85

Excess 01Reven.- and Other FinancingSources over (under) Expendituresand Other FinancingUses

850,406.57 $

142,190.66 $ -22,363.00 $ 970,233.23 $ -1,382,242.50

FUNp BALANCEJULY 1

167,172.38

0.00

22363.00

189,535.38 1 551 777.86

FUND BALANCEJUNE 30

S 1 017577.93 S

142190.66 $

0.00 $ 1159,768.59 $ 189535.38

See notes to the generalpurpose financial statements.

-25-

WORTH COUNTY BOARD OF E"DUCATION
COMBINING BALANCE SHEET DEBT SERVICE FUND JUNE 30 1998

EXHIBIT"K"

Cash and Cash Equivalents Accounts Receivable

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

JUNE 30, 1998

JUNE 30, 1997

$

199,259.08 $

0.00 $

199,259.08 $

180,400.30

3,862.30

Total Assets

$

199,259.08 $

0.00 $

199,259.08 $~_..:.1:8;4;,2=6=2;.6;0.

FUND EQUITY

Fund Balances Reserved For Debt Service Unreserved Undesignated

$

199,259.08

0.00 $

$ 0.00

199,259.08 $ 0.00

184,262.60 0.00

Total Fund Equity $

199,259.08 $

0.00 $

199,259.08 $ _ _",:,:;:~~~

See notes to the general purpose financial statements.

-26 -

WORTH COUNTYBOARDOF EDUCATION COMBININGSTATEMENTOF REVENUES EXPENDITURES AND CHANGESIN FUND BALANCES
DEBT SERVICEFUND YEAR ENDEDJUNE 30 1998

EXHIBIT"L"

See notesto the generalpurposefinancial statements.

-27-

WORTH COUNTY BOARD OF EDUCATION

SCHEDULE" 1"

SCHEDULE OF REOUIRED SUPPLEMENTARYlNFORMATION

YEAR 2000 DISCLOSURES

YEAR ENDED JUNE 30, 1998

At June 30, 1998,the Worth County Board of Educationhad no outstandingcontractualcommitments for the purpose of making computer systems and other electronic equipment year 2000 compliant. The year 2000 issue is the result of shortcomingsin many electronicdata processingsystemsand other equipment that make operationsbeyondyear 1999troublesome. The year2000 issue is of primaryconcernfor the Board's financial accounting system. The following stages have been identified as necessary to implement a year 2000 compliant systems.
Awareness Stage - Encompassesestablishinga budget and project plan for dealing with the year 2000 issue.
Assessment Stage - The actual process of identifying all of its systems and individual components of the systems to check for compliance.
Remediation Stage - When changes are made to systems and equipment.
Validationffesting Stage - The process of ensuring that the changes made to systems and equipment will produce a year 2000 compliant system.
It will be necessary for the Board to progress through all four of these stages for each computer and/or electronic system, not alreadyyear 2000 compliant,in orderto assurethat these systemswill not be adversely affected. As ofJune 30, 1998,the financialaccountingsystemwas determinedto be at the Awareness Stage.
The Board's financial accounting software (GENESIS) and hardware (Wang VS) are owned by the State (Georgia Department ofEducation). These systemshave been determinedto be criticalto the Board's ability to successfullyconduct operations. As ofJune 30, 1998,the State had not contracted for the remediation of either the Wang VS operating system or the GENESIS accounting software. In the subsequent period, the Georgia Department of Education remediated the Wang VS operating system and the updated operating system was installed at all GENESIS sites as of December 9,.1998. The Georgia Department ofEducation has remediated the GENESIS software and conducted tests at nine pilot sites. The remediated GENESIS softwarehasbeen providedto all boardsofeducationcurrentlyutilizing the GENESIS accounting software.

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

WORTHCOUNTYBOARDOF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERALAWARDS
YEARENDEDJUNE30 1998

SCHEDULE"2"

FUNDINGAGENCY PROGRAMiGRANT
Agriculture, U. S. Departmentof Direct Foodand NutritionProgram SummerSchool Food service Programfor Children 1997 Grant Food DistributionProgram Alternative10CommodityDonations 1998Granl Pass-Throughfrom GeorgiaDepartmentof Education Foodand NutritionProgram Food services SChool Breakfast Program 1998 Grant NationalSchoolLunch Program 1998 Grant Food DistributionProgram(1) Pass Throughfrom Officeof SchoolReadiness Foodand NutritionProgram SummerSchool Food service Programfor Children 1998 Grant
Total U. S. Departmentof AgriClJlture
Education,U. S. Departmentof Pass-Throughfrom GeorgiaDepartmentof Education Elementaryand SocondaryEducationAct Tille I Grants to Local EducationalAgencies 1997 Summer 1998 Grant 1998 Summer Tille 11 EisenhowerProfessionalDevelopment 1997Granl 1998Gnm1 Tille VI InnovativeEducationProgram Strategies 1998 Grant Goals 2000 State and Local EducationSystemicImprovementGrants 1997 Grant 1998 Grant Individualswith Disabilil1es EducationAct Part B SpecialEducation Flow Through 1998 Grant Preschool 1998 Grant VocationalEducation Basic Grants10States High School Program Basic Grant 1998 Grant
Total U. S. Departmentof Education
Healthand Humanservices, U. S. Department of PassThroughfrom GeorgiaDepartmentof HumanResources ChildCare SchoolAge Program Contract42793-71537 Contract427-93-81554 safeand DNg.Frae Schools
Total U. S. Departmentof Healthand HumanResources

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

10.559 10.550
10.553 10.555
10.550
10.559

89.434.66 $ 92,458.00

89,434.66 (2)

N/A

297,318.44

(2)

N/A

818,157.77

1,594,777.91 (3)

N/A

7,715.54

7,715.54

NlA

66.837.04

66.837.04

1.371.921.45 $ 1 758.765.15

84.010 84.010 84.010
84.281 84.281
84.298
84.276 84.276
84.027 84.173
84.048

NlA $

8,561.92 $

NlA

997,860.27

NlA

27,127.99

NlA

6,061.16

NlA

24,922.99

NlA

29,631.27

NlA

-5,353.29

NlA

78,468.36

8.561.92 997,860.27
27,127.99
6,061.16 24,922.99
29,631.27
5,353.29 78,458.15

NlA

179,292.32

179,292.32

NlA

30,357.44

30,357.44

NlA

36.178.69

36.178.69

1,423815.70 $

1.423.805.49

93.037 93.037 84.186

NlA $

2,574.42 $

NlA

45,769.22

NlA

35.779.31

84122.95

2,574.42 45,769.22 35,779.31
84,122.95

-29-

WORTH COUNTYBOARDOF EDUCATION SCHEDULEOF EXPENDITURES OF FEDERALAWARDS
YEAR ENDEDJUNE 30 1998

SCHEDULE"2"

FUNDINGAGENCY PROGRAM/GRANT

CFDA NUMBER

Labor. U. S. Department of Pass-Through fromSouthwest Georgia Regional Development Center JobTraining Partnership Act 96-B-97 96-B-98

17.250 17.250

Tolal U. S. Departmentof Labor

OtherFederalAssistance

Defense. U. S. Department of Direct Departmentof the Army R.O.T.C. Program

PASSTHROUGH
ENTITY 10
NUMBER
N/A N/A

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

11.670.72 $ 9.813.44
21.484.16

11,670.72 9,813.44
21484.16

39.387.36

(4)

TotalFederalFinancial Assistance NlA = Not Available

2.940.731.62 $_..3;.2: 88,17~7~.7~5

Notesto the Schedule of ExPenditures ofFederalAwards

(1) The amounls shown tor the Food DistributionProgramrepresenlsIhe Federallyassi9nedvalue of nonmonelary asslstance fordonated commodities received and/orconsumed bythe system during the current fiscal year.
(2) Expendtturestor the Alternatives10Commodijy Donationsand the SChool BreakfastProgramwere nol maintained separalely and are includedin the 1998 NationalSChool Lunch Program.
(3) Expendtturestor this program indude Stele. and/orOther Funds. Expenditures are notmaintained by fund source.
(4) Funds eamed on this program do not require reporting of expendttures.
Major Programs are identJfied by an asterisk (") In front of the CFDA number.
The Boarddid not provide FederalAssislence to any Subredpienl

The accompanyingschedule of expendtturesof Federalawardsindudes the Federalgranl activttyof the
Worth County Board of Education and is presentedon the modifiedaeaual basis of accountingwhich
is thesamebasisof accounting usedin thepresentation ofthe financial statements torthe governmental funds.

See notesto the generalpurpose financial statements.

-30-

WORTH COUNTYBOARDOF EDUCATION SCHEDULEOF STATE REVENUE YEARENDEDJUNE 30 1998

SCHEDULE"3"

AGENCYIFUNDING
GRANTS Education, Georgia Department of Quality Basic Education GeneralandCareerEducation Programs Special Education Programs Remedial EducationProgram MediaCenterPrograms StaffDevelopment Programs Indirect Cost Pupil Transportation Regular BusReplacement Middle School IncentiveProgram SpeciallnstruClionalAssistance In-School Suspension Counselors Grades4 and5 Technology Training LocalFairShare Deferred Summer Salaries(Prior Year) Deferred Summer Salaries (CurrantYear) EducationalEqualizationFundingGrant Food services Vocational Education Olhar Stale Programs Ad Valorem Tax Adjustment Alternative Program AI-Risk Summer SchoolProgram Environmental Science Program HealthInsurance Innovative Programs MentorTeacher Program Preschool HendicappedProgram Remedial Summer School Program Teachers' Retirement Lottery Programs Altemetive School Program ExceptionalGrowth-CapitalOutlay InstructionalTechnology AasiativeTechnology Classroom Technology
Humsn Resources,Georgia Departmentof Family Connection
OfIice of School Readiness Pril-Kindergarlen Program
OfIice of Treasury end FIScalservices Public School EmployeesRetirement

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

9,392,635.00 1,410,649.00
378,121.00 392,742.00 120,287.00 2,598,775.00
768,281.00 235,785.00 366,281.00 393,106.00
81,703.00 39,858.00 67,684.00 -1,396,229.00 -1,853,604.00 1,982,887.00 1,155,277.00
99,980.28
101,968.00 124,300.00
17,688.74 500.00
344,702.92 3,077.12 1,692.00
45,885.00 8,115.93 13,142.84
65,428.00

115,576.00
4,132.00 $
125,469.00 7,519.00
48,859.72 503,975.01

421,988.00

9,392,635.00 1,410,649.00
378,121.00 392,742.00 120,287.00 2,598,775.00
768,281.00 235,785.00 366,281.00 393,106.00 81,703.00 39,858.00 57,684.00 -1,396,229.00 -1,853,604.00 1,982,887.00 1,155,277.00 115,576.00 99,980.28
101,988.00 124,300.00
17,666.74 500.00
344,702.92 3,077.12 1,692.00
45,885.00 8,115.93 13,142.64
4,132.00 421,988.00
125,469.00 7,519.00
46,859.72
503,975.01
65,428.00

16 950 496.63 $

805,530.73 $

421988.00 $ 18178,015.36

see notesto the generalpurpose financial statements.

-31-

WORTH COUNTYBOARDOF EDUCATION SCHEDULEOF APPROVEDLOCAL OPTIONSALESTAX PROJECTS
YEAR ENDEDJUNE 30 1998

SCHEDULE"4"

ORIGINAL ESTIMATED
COST (1)

Repaymentof principal and Interest

on the outstandingWorth County,

(Georgia)School District General

ObligationSeries 1990 maturingon

January 6, 1998and thereafter

$

3,510,733.75 $

Constructionand equippingof capital outiay projectsfor the Worth County School District consisting of twelve (12) additionalclassroomsand expansionof the music area at Worth County Middle School, six (6) additionalclassroomsand needed renovationsat Sylvester Elementary School and an audltol1um

5,050,000.00

Renovations,additions, expansions. Improvemenls,modificationsand equippingall other existing school facilities of Worth County School District end including Sumner School propertyto, include the acquisitionof all property.boIh real and personal necessarytherefor

1,226.266.25

CURRENT ESTIMATED
COST (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

3,510,733.75 $

304,491.83 $

5,050,000.00

864,568.72

1,226,266.25

18,564.59

AMOUNT EXPENDED
IN PRIOR YEARS
0.00
0.00

$

9:787,000.00 $

9.787,000.00 $

1,207,645.14 $

~ 0.0~ 0

(1) The Board's original cost estimateas specified In the resolutioncaRing for the Impositionof the Local Option Sales Tax.
(2) The Board's current estimate of lotaI cost for each project. Includesall cost from proJecllnception to completion.
(3) The _ of Worth Countyapprovedthe Impositionof a 1% sales taxto fund the aboveprojects. Amounts expendedfor these projects may Includesales tax proceeds,state, local propertytaxes sndlor other funds over the life of the project.

see notes to the general purposefinancial statements.

- 32-

WORTH COUNTY BOARD OF EDUCATION
SCHEpULE OF EXPENDITURES
LOillRY PROGRAMS
YEAR ENDED JUNE 30 1998

SCHEDULE "5"

EXPENDITURES
Current Instruction Support Services PupilServices Improvement of Instructional Services GeneralAdministration Maintenance and Operation of Plant Student Transportation services

ALTERNATIVE SCHOOL PROGRAM

INSTRUCTIONAL TECHNOLOGY

A5SISTIVE

CLASSROOM

TECHNOLOGY

TECHNOLOGY

PRE-KINDERGARTEN PROGRAM

TOTAL

4,132.00 $

7,519.00 $

125,469.00 $

375,910.07 $
57,252.57 3,142.81 30,197.46
21,920.84 15551.26

513,030.07
57,252.57 3,142.81
30,197.48 21,920.84 15551.26

Total Expenditures

4132,00 $

7519.00 $

125469.00 $

5~0::l3,,97:.:5:;l.0:.l.' $_....:::6:4:.1:,.0:9:.5:.:0.:1.

RECAP:
Salariesand Benefits Pre-KIndergarten Program
Other Expenditures AltemativeSChool Program
Instructional Technology Assistive Technology ~ Technology
Pre-Kinderg.rten PrognIm

424,500.98
4,132.00
7,519.00 125,469.00
79,474.03

841095.01

see notes to thegeneral purpose financial statements.

WORTH COUNTYBOARDOF EDUCATION ANALYSIS OF MINIMUMEXPENDITURE REQUIREMENTS - OVERALL
GENERALFUND- QUALITYBASIC EDUCATION PROGRAMS YEAR ENDEDJUNE 30 1998

SCHEDULE '"6'"

Note: (1) Salaryaccruals(July and August 1998DeferredSalaries)reported as expenditures in the GenerelPurposeFinancialStatements are not includedon this analysisin orderto complywith program guidelines.
(2) Salaryaccruals(July and August 1997DeferredSalaries)reported es expenclitures in the prior year GeneralPurposeFinancial Statementsare includedon this analysises required by program guidelines.
See notesto the generalpurposefinancial statements. - 35 -

WORTHCOUNTYBOARDOF EDUCATION ANAlYSIS OF MINIMUMEXPENDITURE REQUIREMENTS _BY PROGRAM
GENERAL FUND - QUAlITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30 1998

GENERALAND CAREEREDUCATIONPROGRAMS Kindergarten(")
Sub-Tctal- K-3 Grades4-5rJ Gredes6-BrJ Gredese-12r)
r) High Schcol Laboretorles r) Voc:atlonal Education Laboratories
Total General and CareerEducationPrograms SPECIAL EDUCATIONPROGRAMS
RegUlar Programs Category I rJ CategoryllrJ Calegc<yIII rJ CetegorylV(") Calegc<yVrJ Sub-Total - Regular CaIegc<y VI (Gifted) rJ Total Speciel Educotion Pnlgre...
REMEDIALEDUCATION PROGRAM M Total Four-. Welgh1BdP"'llrema
MEDIA CENTERPROGRAMS Salaries aperetiona Total MedIa Center ProgratM
TOII:IFourteenWeightedand Media CenterPrograms
STAFF PE\IElQPMENT PROGRAMS
Colt of Inltructlon Professional Development
Total Staff Development Programs (*) Identifies Fourteen Weighted Programs. (1) Salary eccruals (July end Augusl199B DeIerred
Salaries) rvported as expendituresIn the General
Purpose Financial S1atements are not included on thla analylilin order to complywith program
gUklelines. See notes to the general purpose financial statements.

- 36 -

ALLOTMENTSFROMDEPARTMENTOF EDUCATlQN

REQUIRED

ORIGINAL ~

ORIGINAL

MID-TERM

969,579.00 2,529,102.00 3,498,681.00 eo 1,188,695.00 eo 2,157,998.00 eo 1,559,467.00 eo
484,154.00 eo 503,640.00 eo 9,392,635.00

872,621.10 2,276,191.80 3,148,812.90 1,069,825.50 1,942,198.20 1,403,520.30
435,738.60 453,276.00 8,453,371.50

0.00 0.00
0.00

1,299,281.00

1,169,352.90 $

0.00

1,299,281.00 eo 111,368.00 90
1,410,649.00 378,121.00 90
11,181 ,405.00

1,189,352.90 100,231.20
1,269,584.10 340,308.90
10,063,284.50

318,424.00 BO 74.318.00 BO
392,742.00

288,581.60 68,886.20
353,467.80

$ 11.574.147.00

10.416,732.30

0.00
0.00 0.00 0.00
0.00 0.00
0.00

34,920.00 85,367.00

34,920.00

0.00

85,367.00

0.00

120,287.00 100 $

120,287.00 $

0.00

(2) Salaryeccruola (July end August 1997 Deferred Salaliel) reportedas expendltuntsIn the prior year GeneralPurposeFinancialStatements Brelncluded on 1I1iaanalysia as required by program guiclefines.

SCHEDULE 7"

TOTAL REQUIRED

ACTUAL EXPENDITURES SAlARIES (1)(2) OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED AllOTMENT

672.621.10

941.815.41

28,149.37

969,964.78

2.278.191.60

2,334,468.80

108,823.47

2,443,292.27

3,148,812.90

3,276.284.21

136,972.84

3,413,257.05

0.00

1.066.625.50

1,168,404.92

79.714.80

1,248.119.72

0.00

1,942,198.20

1.944.337.39

109,697.50

2,054,034.89

0.00

1,403,520.30

1.566.211.83

89,313.93

1.655,525.46

0.00

435.736.60

467.767.06

18.655.92

506.422.96

0.00

453,276.00

484,734.62

65,531.12

850.265.74

0.00

8,453.371.50

8.927.739.73

499.886.11

9.427.625.64

1,169.352.90

475,957.19 844,379.03 127.626.04
16.000.01

In.'
9,121.20
8,131.99 13.936.37
2,073.69

In,4' 485,078.39 852.511.02 141.564.41
18,073.70

1.189.352.90

1.263.964.27

33,440.88

1.297.404.93

0.00

100.231.20

157.941.77

9,324.56

187.266.35

0.00

1.269.564.10

1.421.906.04

42,765.24

'.484.671.28

340.308.90

547.810.90

5,070.93

552,881;83

0.00

10.083.264.50

10.697.458.87

547.722.28

11.445,178.95

268.581.80

390.649.74

390,649.74

0.00

88.888.20

79.761.00

79.761.00

0.00

353.487.80 $

390.849.74

79.761.00

470.430.74

$ 10.416,732.30

11.288.106.41

627,503.28 $ 11 .915.809.69 S

0.00

34,920.00 65,387.00
120,287.00

53.473.12 66,844.91

53.473.12 66.844.91

120,318.03

120,318.03 $

0.00

- 37 -

SECTION II COMPUANCE AND INTERNAL CONTROL REPORTS

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 9,1999

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Worth County Board of Education
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of Worth County Board of Education as of and for the year ended June 30,1998, and have issued our report thereon dated June 9,1999. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether Worth County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of
laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Worth County Board ofEducation's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over fmancial reporting. However, we noted certain matters involving the intemal control over financial reporting and its operation
98YB-40

that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in our judgement, could adversely affect Worth County Board of Education's ability to record, process, summarize and report fmancial data consistent with assertions of management in the fmancial statements. Reportable conditions are described in the accompanying Schedule of Findings and Questioned Costs as items FS-98-7591-01 and FS-98-759l-02.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the intema1 control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, all of the reportable conditions described above are also considered to be material weaknesses.
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
Respectfully submitted,

RWH;jb 98YB-40

Russell W. Hinton State Auditor

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W. Suite 214 Atlanta, Georgia 30334-8400
June 9,1999

Honorable Roy E. Barnes. Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Worth County Board of Education
REPORT ON COMPLIANCE WITH REOUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-I 33
Ladies and Gentlemen:
Compliance
We have audited the compliance of Worth County Board of Education with the types of compliance requirements described in the U.S. Office ofManagement and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 1998. Worth County Board ofEducation's major Federal programs are identified in the accompanying Schedule ofFindings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Worth County Board of Education's management. Our responsibility is to express an opinion on Worth County Board of Education's compliance based on our audit.
We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133,Audits ofStates, Local Governments. and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Worth County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Worth County Board of Education's compliance with those requirements.

98SA-IO

In our opinion,the Worth CountyBoardof Educationcomplied,in all materialrespects,with the requirements referredto above that are applicableto each of its major Federal programs for the year ended June 30, 1998.
Internal Control Over Compliance
The management of Worth County Board of Education is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicableto Federal programs. In planning and performing our audit, we considered Worth County Board ofEducation'sinternal controlover compliancewith requirementsthat could have a direct and material effect on a major Federal program in order to determineour auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133.
Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internalcontrolcomponentsdoes not reduceto a relativelylow level of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federalprogrambeing audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involvingthe internal controlover complianceand its operationthat we consider to be material weaknesses.
This report is intended for the information of management,the Federal cognizant agency, Federal awarding agenciesand pass throughentities. This restrictionis not intendedto limitthe distributionof this report which is a matter of public record.
Respectfu1ly submitted,

RWH:jb 98SA-IO

Russell W. Hinton State Auditor

SECTIONill AUDlTEE'SRESPONSETO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

WORTH COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE30,1998

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

7591-93-01 7591-93-02 7591-93-04 FS-7591-97-01 FS- 7591-97-02 FS-7591-97-03

Further Action Not Warranted Further Action Not Warranted Further Action Not Warranted Partially Resolved-See Corrective ActionlResponses Previously Reported Corrective Action Implemented Unresolved-See Corrective ActionlResponses

CORRECTIVE ACTIONIRESPONSES

CASH AND CASH EQUIVALENTS Inadequate Separation of Duties Finding Control Number: FS-7591-97-01

Procedures were implemented during the 1998 fiscal year to provide for adequate separation of duties in the performance of accounting functions and related procedures. This corrective action partially resolved this finding, In June, 1999, the Superintendent's Secretary began maintaining a log to safeguard blank checks and to provide check signers access to the check signing machine only as authorized.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7591-97-03

The management oftheWorth CountyBoard ofEducation has not implemented a plan to maintain a system-wide General Fixed Asset Account Group within the formal accounting records. We feel that it is not cost beneficial to record these assets.

SECTIONIV FINDINGS AND QUESTIONED COSTS

WORTH COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30. 1998

SUMMARY OF AUDITOR'S RESULTS

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

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

Cash and Cash Equivalents

General Fixed Assets

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

3. Noncompliance Material to the Financial Statements The audit ofthe Worth County Board ofEducation disclosed no instances ofnoncompliance that were deemed to be material to the financial statements.

4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Worth County Board ofEducation did not disclose any reportable conditions in internal control over major programs.

5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Worth County Board of Education's report on compliance with
requirements applicable to major programs wasunqualified.

6. Audit Findings Required to be Reported by Section .51OCa) of OMB Circular A- I 33 The Worth County Board of Education's audit did not disclose audit findings required to be reported by section .5IO(a) ofOMB Circular A-133.

7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program 10.559 Food and Nutrition Program - Summer School Food Service - Program for Children

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

9. Low Risk Auditee The Worth County Board of Education was audited as a low risk auditee based on a waiver granted by the U. S. Department of Education.

-I -

WORTH COUNTY BOARD OF EDUCATION
SCHEDULE OFFINDINGS AND QUESTIONED COSTS YEAR ENDED ruNE 30 1998
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS Inadequate Separation ofDuties Reportable Condition- Material Weakness Repeated from Prior Year Finding Control Number: FS-759l-98-01
An examination of the internal accounting control procedures revealed that the Board did not maintain adequate separation of employee duties in the performance of the following accounting functions and procedures relative to Cash and Cash Equivalents:
* The record keeping function is not separated from the check writing function, as a result individuals
responsible for record keeping and check preparation have access to blank checks and the check signing machine.
Separation of duties involving key accounting functions is the basis for achieving an adequate system of internal control. These deficiencies were a result of management's decision to limit the number of administrative staff made responsible for accounting functions. Management should periodically review this decision to determine ifemployees duties can be reassigned to achieve a higher degree ofinternal control with existing staff.
Management's Response:
We concur with this finding. During fiscalyear 1999, the Board implemented a procedure to separate the record keeping function from the check writing function. The Superintendent's secretary maintains a log to safeguard blank checks and to provide check signers access to the check signing machine only as authorized. Thiscorrective action provides for adequate separation ofemployee duties in the performance of accounting functions and related procedures.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition- Material Weakness Repeated from Prior Year Finding Control Number: FS-7591-98"()2
The Worth County Board ofEducation did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general purpose financial statements ofthe Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the Board
- 2-

WORTH COUNTY BOARD OF EDUCATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED TIJNE 30 1998
IT FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated from Prior Year Finding Control Number: FS-7591-98-02 and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained on all additions and deletions to the General Fixed Assets Account Group. Management's Response: We concur with this recommendation. Due to current staffing limitations and budgetary considerations prohibiting the hiring of additional administrative staff, the Board has decided not to pursue the recording of general fixed assets on the financial statements.
ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
- 3-