Audit report, state of Georgia, Department of Education, year ended June 30, 1994

GA A800
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STATE OF GEORGIA DEPARTMENT OF AUDITS
254 WASHINGTON STREET ATLANTA. GEORGIA 30334

AUDIT REPORT STATE OF GEORGIA DEPARTMENT OF EDUCATION YEAR ENDED JUNE 30, 1994

DEPARTMENT OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

EXHIBITS

FINANCIAL STATEMENTS

A COMBINED BALANCE SHEET (STATUTORY BASIS)

ALL FUND TYPES AND ACCOUNT GROUPS

2

B STATEMENT OF CHANGES IN FUND BALANCES

(STATUTORY BASIS)

GOVERNMENTAL FUND TYPE

7

C STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

BUDGET FUND

8

STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

COMPARED TO BUDGET

BUDGET FUND

D

"A" DEPARTMENT OF EDUCATION

12

E

"B" LOTTERY FOR EDUCATION

14

F STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCE

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND

15

G NOTES TO THE FINANCIAL STATEMENTS

16

SUPPLEMENTARY INFORMATION

H COMBINING BALANCE SHEET (STATUTORY BASIS)

BUDGET FUND

30

I COMBINING STATEMENT OF CHANGES IN FUND BALANCES

(STATUTORY BASIS)

BUDGET FUND

31

J COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

BUDGET FUND

32

K COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

FIDUCIARY FUND TYPE - AGENCY FUNDS

36

DEPARTMENT OF EDUCATION -TABLE OF CONTENTS-

SECTION I

FINANCIAL

SUPPLEMENTARY INFORMATION

SCHEDULES

SCHEDULES OF APPROVED BUDGET

1

"A" DEPARTMENT OF EDUCATION

38

2

"B" LOTTERY FOR EDUCATION

40

3 CASH AND CASH EQUIVALENTS

41

4 INVESTMENTS

42

5 SCHEDULE OF GOVERNOR'S EMERGENCY FUND

43

6 SCHEDULE OF FEDERAL REVENUES

44

7 SCHEDULE OF OTHER OPERA TING EXPENSES

46

8 RECONCILIATION OF TRAVEL

47

9 SUMMARY OF SALARIES, TRAVEL, AND PER DIEM AND FEES

48

SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS

SECTION I FINANCIAL
'

CLAUDE L. VICKERS STATE AUDIIDR (404) 656-2174
TAX RATIO (404) 656-0494

~epartmeut nf ~uh-its
254 WASHINGIDN STREET, S.W. ROOM 214
J\tlanbt, eorgia 30334-8400
December 22, 1994

FINANCIAL AUDl"TS (404) 656-2180
PROGRAM AUDl"TS (404) 656-2006

Honorable Zell Miller, Governor Members ofthe General Assembly of Georgia Members ofthe State Board ofEducation
and Honorable Linda C. Schrenko State Superintendent of Schools
INDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have audited the accompanying financial statements (Exhibits A through G) of the Department of Education as ofand for the year ended June 30, 1994. These financial statements are the responsibility of the Department's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in Note 1, these financial statements were prepared on a prescribed basis of accounting that demonstrates compliance with the budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position (statutory basis) ofthe Department ofEducation as of June 30, 1994, and the results of its operations (statutory basis) for the year then ended, on the basis of accounting described in Note 1.

94ARL-l

Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplementary infonnation (Exhibits H through K and Schedules I through 9) is presented for purposes of additional analysis and is not a required part of the financial statements of the Department of Education. Such infonnation has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly presented in all material respects in relation to the financial statements taken as a whole.
Respectfully submitted,
d~' /~
Claude L. Vickers State Auditor
CLV:gp 94ARL-l

FINANCIAL STATEMENTS - 1-

DEPARTMENT OF EDUCATION COMBINED BALANCE SHEET (STATUTORY BASIS)
ALL FUND TYPES AND ACCOUNT GROUPS JUNE 30. 1994

ASSETS Cash and Cash Equivalents
(See Schedule) Investments (See Schedule) Accounts Receivable
State Appropriation Federal Financial Assistance Other
Prepaid Items Inventories
Supply Donated Food
Fixed Assets Equipment
Amount to be Provided for Payment of Accrued Compensated Absences Installment Purchase Commitments

GOVERNMENTAL

FIDUCIARY FUND TYPES

FUND TYPE ----------------------------

-------------- NONEXPENDABLE

BUDGET

TRUST

AGENCY

$ 13,500.00$ 1,001,881.41 $ 119,111.83

$ 89,006,627.92 90,304,396.28 8,748,077.83

$188,059,102.03

$

0.00

$

75,169.94

1,375,823.93

$ 1,450,993.87

Total Assets

$189,510,095.90 $ 13,500.00$ 1,120,993.24
============== ============= =============

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

EXHIBIT "A" Page 1

ACCOUNT GROUPS

GENERAL
FIXED ASSETS

GENERAL LONG-TERM
DEBT

TOTALS (Memorandum Only) JUNE 30, 1994 JUNE 30, 1993

$ 1,015,381.41 $ 1,156,764.59 $ 119,111.83 $ 115,412.31

$ 89,006,627.92 $14,131,473.66
90,304,396.28 94,354,960.47 8,748,077.83 4,138,302.57

$188,059,102.03 $112,624,736.70

$

0.00 $

10,684.40

$ 75,169.94 $ 71,224.13 1,375,823.93 1,330,848.71
$ 1,450,993.87 $ 1,402,072.84

$23,563,489.23

$ 23,563,489.23 $18,440,832.43

$2,912,306.95$ 2,912,306.95 $ 2,592,329.70

172,556.20

172,556.20

24,720.81

$3,084,863.15$ 3,084,863.15$ 2,617,050.51

$23,563,489.23 $ 3,084,863.15 $217,292,941.52 $136,367,553.78
============= ============= ============== ==============

- 3-

DEPARTMENT OF EDUCATION COMBINED BALANCE SHEET (STATUTORY BASIS)
ALL FUND TYPES AND ACCOUNT GROUPS JUNE 30 1 1994

LIABILITIES AND FUND EQUITY
Liabilities Cash Overdraft Accounts Payable Contracts Payable Grants Payable Payroll Withholdings Funds Held for Others Compensated Absences Installment Purchases
Total Liabilities
Fund Equity Investment in General Fixed Assets Fund Balances Reserved Federal Financial Assistance Inventories Supply Donated Food Food Distribution Program Temporary Emergency Food Assistance Program France-Mediaction and Vocational Mission Programs Georgia Academy for the Blind Pupils' Trust Fund - Endowment Corpus Georgia-Lorraine Exchange Program Georgia School for the Deaf School Improvements Legislative Video Program Mellon School/College Collaboration Grant QBE Formula Grants School Nurse Program State Teacher of the Year Program United States Senate Youth Program Vocational Education General Obligation Funds Unreserved Designated Surplus Regular Lottery for Education
Total Fund Equity

GOVERNMENTAL

FIDUCIARY FUND TYPES

FUND TYPE ----------------------------

-------------- NONEXPENDABLE

BUDGET

TRUST

AGENCY

$ 1,930,405.02 8,283,831.15 5,063,122.20
167,865,597.50 356,343.93
$183,499,299.80

$1,120,993.24 $1,120,993.24

$ 1,104,179.48
85,000.00
252,055.47 1,123,768.46
13,227.45
$ 1,228.45
38,719.23 500.00 20.83 0.00 571.93
1,855.54 2,392.32 3,116.90

13,500.00

2,629,643.20 754,516.84
-------------- -------------
$ 6,010,796.10 $ 13,500.00
-------------- -------------

Total Liabilities and Fund Equity

$189,510,095.90 $ 13,500.00$ 1,120,993.24
============== ============= =============

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

EXHIBIT "A" Page 2

ACCOUNT GROUPS

GENERAL
FIXED ASSETS

GENERAL LONG-TERM
DEBT

TOTALS (Memorandum Only)
JUNE 30, 1994 JUNE 30, 1993

$ 1,930,405.02 $ 1,886,913.11

8,283,831.15 2,885,140.06

5,063,122.20 4,402,663.23

167,865,597.50 98,133,739.18

356,343.93

235,830.66

1,120,993.24 1,258,676.90

$ 2,912,306.95 2,912,306.95 2,592,329.70

172,556.20

172,556.20

24,720.81

$ 3,084,863.15 $187,705,156.19 $111,420,013.65

$23,563,489.23

$ 23,563,489.23 $ 18,440,832.43

1,104,179.48
85,000.00
252,055.47 1,123,768.46
13,227.45
13,500.00 1,228.45
38,719.23 500.00 20.83 0.00 571.93
1,855.54 2,392.32 3,116.90

991,187.04
85,000.00
518,111.82 812,736.89
0.00
13,500.00 1,228.45
238,920.00 500.00 11. 79
1,908,260.00 0.00
5,080.77 1,938.83
0.00

$23,563,489.23

2,629,643.20 1,930,232.11

754,516.84

0.00

$ 29,587,785.33 $ 24,947,540.13

$23,563,489.23 $ 3,084,863.15 $217,292,941.52 $136,367,553.78

- 5-

DEPARTMENT OF EDUCATION STATEMENT OF CHANGES IN FUND BALANCES (STATUTORY BASIS)
GOVERNMENTAL FUND TYPE YEAR ENDED JUNE 30, 1994

EXHIBIT "B"

FUND BALANCES - JULY 1
----------------------
Reserved Unreserved
Designated Surplus
ADDITIONS
Adjustments to Prior Year's Accounts Payable Grants Payable
Change in Reserve for Inventory Donated Food Program Food Distribution Program Temporary Emergency Food Assistance Program
Excess of Funds Available over Expenditures Exhibit "C"
Reimbursement of Prior Year's Expenditures Grants Other
DEDUCTIONS
Unreserved Fund Balance (Surplus) Returned to Office of Treasury and Fiscal Services Year Ended June 30, 1992 Year Ended June 30, 1993
Adjustment to Prior Year's Accounts Receivable
Refund of Private Grant Reserved Fund Balance Carried Over from
Prior Year as Funds Available
FUND BALANCES - JUNE 30
(To Exhibit "A")

BUDGET FUND YEAR ENDED JUNE 30, 1994 JUNE 30, 1993

$ 4,562,975.59 $ 2,580,510.90
1,930,232.11 4,933,643.29
-------------- --------------
$ 6,493,207.70 $ 7,514,154.19
-------------- --------------

$ 427,457.23$ 364,502.20 24,B65,747.92 26,813,509.14

-266,056.35

221,505.08

311,031.57 -1,264,162.39

-24,487,383.84 -26,693,108.29

3,731,476.01 4,643,750.33

125,692.48

34,660.61

$ 4,707,965.02 $ 4,120,656.6B

$

0.00 $ 4,933,643.29

1,930,232.11

0.00

27,891.63 126.00

0.00 955.00

3,232,126.B8

207,004.88

-------------- --------------

$ 5,190,376.62 $ 5,141,603.17
-------------- --------------

$ 6,010,796.10 $ 6,493,207.70
============== ==============

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

DEPARTMENT OF EDUCATION STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30. 1994

EXHIBIT "C" Page 1

FUNDS AVAILABLE REVENUES
STATE APPROPRIATION General Appropriation Amended Appropriation Governor's Emergency Fund (See Schedule) Budget Adjustments
Less: Lapsed Funds Total State Appropriation
FEDERAL REVENUES (See Schedule) OTHER REVENUES RETAINED
Audit Contracts Cafeteria Sales Court Settlement Equipment Funding for Vocational Education High
School Program Georgia State Financing and Investment Commission
Funding for Student Information System Project Georgia State Financing and Investment Commission
Grants France-Mediaction and Vocational Mission Programs Indi~ent Care Trust Fund Program Lettie Pate Evans Foundation Next Generation School Grants State Teacher of the Year ~rogram United States Senate Youth-Program
Indirect Services Funding Department of Administrative Services
Lottery Proceeds Atlanta School for the Deaf General Instruction/State Georgia Academy for the Blind Georgia Regional Library for the Blind Georgia School for the Deaf
Reimbursements For Honorariums For Job Training Partnership Act For School Lunch and Milk Program For Telephone Expenses For Workshop Expenses
Rents Received Sales
Photocopies and Publications Recycled Materials Timber Video Fees
Total Other Revenues Retained Total Revenues CARRY-OVER FROM PRIOR YEAR Transfer from Reserved Fund Balance Federal Financial Assistance Inventories Carnegie Corporation Grant Education Commission of the States Grant Georgia-Lorraine Exchange Program Georgia School for the Deaf School Improvements Leg~slative Video Program Mellon School/College Collaboration Grant QBE Formula Grants State Teacher of the Year Program United States Senate Youth Program Total Carry-Over from Prior Year

TOTALS YEAR ENDED JUNE 30. 1994 JUNE 30. 1993

$3,216,277,608.00 $3,031,122,006.00

180,667,171.00

42,787,685.00

405,487.00

203,400.00

-10.030.931.00

0.00

$3,387,319,335.00 $3,074,113,091.00

5.618,469.00

1,500.000.00

$3.381.700.866.00 $3.072.613.091.00

$ 508.786.886.29 $ 492,353.733.46

$

664,571.29 $

597,823.48

0.00

2,658.96

1,196.36

0.00

11,297,168.05

3,853,337.50

5,915,652.18

3,200,000.00

15,003.38 344,305.00
50,000.00 1,943,699.50
0.00 1,000.00

0.00 0.00 50,000.00 0.00 5,200.00 1,000.00

340,000.00

340,000.00

66,696.72

0.00

4,447.00

0.00

99,083.32

0.00

12,275.11

0.00

232,699.54

0.00

532,955.80 0.00
176,266.53 47.65
7,338.92 1,620.00

503,500.00 3,232.00
166,319.67 0.00
1,736.69 10,240.38

77,448.21 0.00 0.00
283.444.70

81,905.51 20.82
238,920.00 273.293.21

$,_.2..2l:..0!6;~6.=9.1:9=.~2~6 $ 9.329.188.22

$3.912.554.671.55 $3.574.296.012.68

$

991,187.04 $

85,000.00

0.00

0.00

1,228.45

238,920.00 500.00 11. 79
1,908,260.00 5,080.77 1,938.83

3,232,126.88 $

77,846.51 94,000.00 20,610.16
2,484.45 1,228.45
0.00 500.00 5,093.79
0.00 3,665.77 1 575.75 207,004.88

Total Funds Available

$3.915.786.798.43 $3.574.503.017.56

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

- 8-

DEPARTMENT OF EDUCATION STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30. 1994

EXHIBIT "C" Page 2

EXPENDITURES PERSONAL SERVICES
Salaries and Wages EmRloyer's Contributions for:
F. I .C.A. Retirement Health Insurance Personal Liability Insurance Unemplo,rnent Compensation Insurance Workers Compensation Insurance Assessments by Merit System
REGULAR OPERATING EXPENSES Motor Vehicle Expenses Supplies and Materials Repairs and Maintenance Rents (Other than Real Estate) Insurance and Bonding Tuition and Scholarships Other Operating Expenses (See Schedule) Duplicating and Rapid Copy Publications and Printing
TRAVEL MOTOR VEHICLE PURCHASES EQUIPMENT
Equipment Purchases Lease/Purchase of Equipment Rental of Equipment
COMPUTER CHARGES Other Costs Supplies and Materials Repairs and Maintenance Rents (Other than Real Estate) Other Operating Expenses (See Schedule) Software Equipment Equipment Purchases Per Diem, Fees and Contracts Per Diem and Fees Contracts Computer Billings, DOAS
REAL ESTATE RENTALS TELECOMMUNICATIONS PER DIEM, FEES AND CONTRACTS
Per Diem and Fees Contracts
CAPITAL OUTLAY Per Diem, Fees and Contracts Per Diem and Fees Contracts

TOTALS YEAR ENDED JUNE 30. 1994 JUNE 30. 1993

$ 26,758,888.05 $ 1,631,831.64 4,009,141.07 3,568,829.80 477,264.00 29,616.00 377,651.00 134,330.66
$_...3...6....,..9.._8..7....,,552.22 $

26,395,797.47 1,616,535.96 3,932,287.90 3,245,426.49
402,865.00 19,042.00
244,191.00 139,478.71 35,995,624.53

$

55,242.37 $

1,408,067.78

1,416,021.38

303,145.17

53,220.24

6,850.00

1,035,530.79

289,861.98

286,371.33

$_ __.4....,8_5._4_...3...1..,1. 04 $

$____96...8_,..5...2..1.00 $ $ _ _ _ _ _ _..__,
113,896.72 $

48,150.73 1,282,678.66
575,924.47 350,770.43
62,854.00 12,189.50 852,282.66 201,526.25 275,709.01 3,662,085.71 903 .051.69
0.00

$

158,244.82$

210,378.85

33,614.77

11,009.95

30,344.30

21,357.82

222,203.89 $

242,746.62

$

770,455.50$

3,625,361.81

30.00

120,720.48

109,377.29

9,781,565.48

215,950.00 2,463,483.87
691,616.90 $___1_7..,..7._7___8__,._561.33 $

$_ __.1...,..4.,a8:=3,;,..4.. 79.24 $ $_ _ ____
1,077,230.59 $

309,406.88 1,816,918.69
40.83 2,230.15 106,925.21 3,736,793.70 71,214.00 1,288,212.71 591,891.50 7,923,633.67 2,153,450.22 967 .551.65

$ 1,424,977.72 $ 1,109,959.43

12,777,429.17

11,582,947.20

$ 14,202,406.89 $ 12,692,906.63

$

0.00 $

5,000.00

38,658.00

48,600.00

$

38,658.00 $

53,600.00

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

DEPARTMENT OF EDUCATION STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30, 1994

EXHIBIT "C" Page 3

TOTALS

YEAR ENDED

JUNE 30, 1994

JUNE 30, 1993

EXPENDITURES

OTHER UTILITIES

$

s_____ 861,s21.os

76__9__.,..1.._s_6._...o....1...

QBE FORMULA GRANTS: Kindergarten\Grades 1 - 3 Grades 4 - 8 Grades 9 - 12 High School Laboratories Vocational Education Laboratories Special Education Gifted Remedial Education Staff Development and Professional Development Media Indirect Cost Pupil Transportation Local Fair Share Mid-Term Adjustment Reserve Textbook - 7 Year Cycle Textbook - Increased FTE Counts

$ 759,921,314.00$ 751,461,519.00

721,385,180.00 700,793,074.00

297,422,530.00 299,625,646.00

124,988,870.00 107,088,791.00

102,574,758.00 99,674,648.00

278,830,860.00 259,710,473.00

40,026,562.00 35,763,301.00

59,244,823.00

57,541,020.00

28,987,901.00 20,748,780.00

87,721,767.00

85,311,350.00

600,119,184.00 583,201,228.00

126,831,106.00 125,212,107.00

-614,197,789.00 -594,509,675.00

68,563,220.00

62,734,041.00

0.00 -36,919,947.00

0.00

3,526,005.00

$2,682,420,286.00 $2,560,962,361.00

OTHER CATEGORICAL GRANTS: Equalization Formula Sparsity Grants In School Suspension Special Instructional Assistance Middle School Incentive Special Education Low-Incidence Grants

$ 144,854,014.00 $ 153,097,318.00

2,966,091.00

3,452,877.00

20,901,157.00

20,515,623.00

51,051,591.00

42,162,178.00

56,908,600.00

49,852,255.00

411,712.00

415,326.00

$ 277,093,165.00 $

NON-QBE GRANTS: Education of Children of low-Income Families Retirement (H.B. 272 and H.B. 1321) Instructional Services for the Handicapped Tuition for the Multi-Handicapped Severely Emotionally Disturbed School Lunch (Federal) School Lunch (State) Supervision and Assessment of Students and Beginning Teachers and Performance-Based Certification Regional Education Service Agencies Georgia learning Resources System High School Program Special Education in State Institutions Governor's Scholarships Job Training Partnership Act Vocational Research and Curriculum Even Start Salaries and Travel of Public librarians Public Library Materials Talking Book Centers Public library M& 0 Child Care Lunch Program {Federal) Chapter II - Block Grant Flow Through Payment of Federal Funds to Board of Technical and Adult Education Education of Homeless Children/Youth Innovative Programs Technology Grants Next Generation School Grants Limited English - Speaking Students Program Drug-Free School (Federal J Emergency Immigrant Education Program Title II Math/Science Grant (Federal) Robert C. Byrd Scholarship (Federal) Health Insurance - Non-Cert. Personnel and Retired Teachers Pre-School Handicapped Program Mentor Teachers Pre-Kindergarten Program Public Library Construction Nutrition Education Advanced Placement Exams

$ 186,023,794.03 $ 4,950,000.00 54,732,103.21 1,065,437.85
38,965,519.00 187,111,477.77
24,213,192.00 2,032,955.00 7,072,130.00 3,397,225.90
28,379,567.59 3,673,574.00 2,702,000.00
0.00 293,213.00 2,720,906.00 11,183,401.47 5,718,136.33 911,019.00 4,039,390.00 24,579,610.97 9,663,513.00 14,633,712.73 601,772.27 1,524,035.00
0.00 2,945,000.00 7,452,253.00 11,625,942.51
164,514.00 5,162,004.51
273,723.00 90,047,892.00 14,112,004.00
999,940.00 0.00 0.00 0.00
1,056,649.00

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

269,495,577.00
198,714,080.90 4,600,914.00 51,519,022.71 1,529,876.88
37,034,242.39 165,074,766.24
23,265,716.00 2,001,750.00 6,944,268.00 3,190,796.66
25,063,945.08 3,818,413.00 2,378,647.00 2,598,867.47
258,213.00 1,375,167.00 10,762,697.23 4,568,218.54
871,713.00 3,764,427.98 22,464,115.19 10,019,305.67 13,341,906.64
186,752.00 2,348,634.44
375,000.00 0.00
6,009,348.00 12,505,816.87
228,503.17 4,570,112.00
253,000.00 67,167,892.00 11,525,052.00
703,740.00 2,593,489.00
411,994.00 57,032.00 920,000.00

- 10 -

DEPARTMENT DF EDUCATION STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND
YEAR ENDED JUNE 30, 1994

EXHIBIT "C" Page 4

EXPENDITURES Qifil.B.
NON-QBE GRANTS: Family Connection Grants Youth Apprenticeship Grants Serve America
LOTTERY FOR EDUCATION: Pre-Kindergarten for 4-year-olds Personal Services Salaries and Wages Employer's Contributions for: F. I .C.A. Retirement Hea 1th Insurance Personal Liability Insurance Assessments by Merit System Other Costs Supplies and Materials Insurance and Bonding Grants to Counties, Cities and Civil Divisions Other Operating Expenses (See Schedules) Duplicating and Rapid Copy Publications and Printing Travel Equipment Equipment Purchases Computer Charges Software Telecommunications Per Diem, Fees and Contracts Per Diem and Fees Lottery Grants Computer Hardware/Software in Classrooms Next Generation Schools Distant Learning - Hardware and Cabling Postsecondary Options Educational Technology Centers Safe Schools Grant Media Center and Library Equipment Learning Logic Sites Algebra Classrooms Drug and Anti-Violence Education
Total Other Total Expenditures Excess of Funds Available over Expenditures

TOTALS

YEAR ENDED

JUNE 30 1 1994

JUNE 30 1 1993

$ 1,982,199.00 $ 280,272.00 382,597.00

0.00 0.00 356,345.00

$ 756,672.676.14 $ 705,373,781.06

$

170,163.83 $

0.00

2,845.30

0.00

20,414.05

0.00

21,270.60

0.00

2,928.00

0.00

851.64

0.00

19,964.15

0.00

36.00

0.00

35,188,544.98

0.00

1,238.26

0.00

3,136.52

0.00

741.87

0.00

24,822.75

0.00

85,150.13

0.00

4,253.00

0.00

144.04

0.00

18,978.78

0.00

$ 35,565,483.90 $

0.00

32,889,196.00

0.00

1,000,000.00

0.00

14,111,078.00

0.00

545,855.26

0.00

1,236,400.00

0.00

20,000,000.00

0.00

37,450,000.00

0.00

924,000.00

0.00

752,700.00

0.00

1,025,000.00

0.00

$ 145.499.713.16 $

0.00

$3.862.547.361.35 $3.536.601,475.13

$3,940,274,182.27 $3,601,196,125.85

-24,487.383.84 -26,693,108.29

$3,915.786,798.43 $3.574.503.017.56

The notes to the financial statements are an integral part of this statement. - 11 -

DEPARTMENT OF EDUCATION STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET BUDGET FUND
"A" DEPARTMENT OF EDUCATION
YEAR ENDED JUNE 30, 1994

EXHIBIT "D" Page 1

FUNDS AVAILABLE REVENUES
State Appropriation Federal Revenues Other Revenues Retained
CARRY-OVER FROM PRIOR YEAR Transfer from Reserved Fund Balance

BUDGET

ACTUAL

VARIANCE FAVORABLE (UNFAVORABLE)

$3,239,196,636.00 $3,235,446,636.00 $ -3,750,000.00

693,665,934.00 508,786,886.29 -184,879,047.71

24,171,865.00

22,066,919.26

-2,104.945.74

$3,957,034,435.00 $3,766,300,441.55$ -190,733,993.45

0.00

3,232,126.88

3,232,126.88

$3,957,034,435.00 $3,769.532,568.43 $ -187.501.866.57

EXPENDITURES
Personal Services Regular Operating Expenses Travel Motor Vehicle Purchases Equipment Computer Charges Real Estate Rentals Telecommunications Per Diem, Fees and Contracts Capital Outlay Utilities QBE Formula Grants:
Kindergarten\Grades 1 - 3 Grades 4 - 8
Grades 9 - 12 High School laboratories Vocational Education Laboratories Special Education Gifted Remedial Education Staff Development and Professional Development Media Indirect Cost Pupil Transportation Local Fair Share Mid-Term Adjustment Reserve Other Categorical Grants: Equalization Formula Sparsity Grants In School Suspension Special Instructional Assistance Middle School Incentive Special Education Low - Incidence Grants Non-QBE Grants: Education of Children of Low-Income Families Retirement (H.B. 272 and H.B. 1321)
Instructional Services for the Handicapped Tuition for the Multi-Handicapped Severely Emotionally Disturbed School Lunch (Federal) School lunch (State)

$ 37,493,212.00$ 36,987,552.22 $

5,728,749.00

4,854,311.04

1,282,649.00

968,521.00

117,900.00

113,896.72

532,453.00

222,203.89

18,626,419.00 17,778,561.33

1,476,911.00

1,483,479.24

1,278,638.00

1,077,230.59

15,762,792.00 14,202,406.89

50,000.00

38,658.00

881,922.00

861,521.05

505,659.78 874,437.96
314,128.00 4,003.28
310,249.11 847,857.67
-6,568.24 201,407.41
1,560,385.11 11,342.00
20,400.95

759,921,314.00 721,385,180.00
297,422,530.00 124,988,870.00 102,574,758.00 278,830,860.00 40,026,562.00 59,244,823.00
28,992,874.00 87,721,767.00 600,119,184.00 128,798,307.00
-614,197,789.00 68,646,330.00

759,921,314.00
721,385,180.00
297,422,530.00 124,988,870.00 102,574,758.00 278,830,860.00
40,026,562.00 59,244,823.00
28,987,901.00 87,721,767.00 600,119,184.00 126,831,106.00 -614,197,789.00 68,563,220.00

0.00 0.00
0.00 0.00
0.00 0.00 0.00 0.00 4,973.00
0.00 0.00 1,967,201.00
0.00 83,110.00

144,854,014.00 3,609,604.00 20,901,157.00 51,051,591.00 56,822,863.00
416,000.00

144,854,014.00 2,966,091.00 20,901,157.00 51,051,591.00
56,908,600.00 411,712.00

0.00
643,513.00 0.00 0.00
-85,737.00 4,288.00

192,531,488.00 4,950,000.00
55,060,784.00 2,047,671.00
38,966,173.00 314,456,650.00
24,332,066.00

186,023,794.03
4,950,000.00
54,732,103.21 1,065,437.85
38,965,519.00 187,111,477.77
24,213,192.00

6,507,693.97 0.00
328,680.79 982,233.15
654.00 127,345,172.23
118,874.00

The notes to the financial statements are an integral part of this statement. - 12 -

DEPARTMENT OF EDUCATION STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET BUDGET FUND
"A" DEPARTMENT OF EDUCATION YEAR ENDED JUNE 30 1 1994

EXHIBIT "D" Page 2

EXPENDITURES
Non-QBE Grants: Supervision and Assessment of Students and Beginning Teachers and Performance-Based Certification Regional Education Service Agencies Georgia Learning Resources System High School Program Special Education in State Institutions Governor's Scholarships Vocational Research and Curriculum Even Start Salaries and Travel of Public Librarians Public Library Materials Talking Book Centers Public Library M& 0 Child Care Lunch Program (Federal) Chapter II - Block Grant Flow Through Payment of Federal Funds to Board of Technical and Adult Education Education of Homeless Children/Youth Innovative Programs Next Generation School Grants Limited English - Speaking Students Program Drug-Free School (Federal) Transition Program for Refugees Emergency Immigrant Education Program Title II Math/Science Grant (Federal) Robert C. Byrd Scholarship (Federal) Health Insurance - Non-Cert. Personnel and Retired Teachers Pre-School Handicapped Program Mentor Teachers Nutrition Education Advanced Placement Exams Family Connection Grants Youth Apprenticeship Grants Serve America

1lliQfilI

ACTUAL

VARIANCE FAVORABLE (UNFAVORABLE)

$ 2,062,000.00 $ 2,032,955.00 $

7,072,186.00

7,072,130.00

3,417,151.00

3,397,225.90

33,159,328.00

28,379,567.59

3,991,103.00

3,673,574.00

2,702,000.00

2,702,000.00

298,270.00

293,213.00

2,780,622.00

2,720,906.00

11,198,623.00

11,183,401.47

7,701,969.00

5,718,136.33

911,019.00

911,019.00

4,039,390.00

4,039,390.00

31,496,955.00

24,579,610.97

10,783,825.00

9,663,513.00

17,198,206.00 631,607.00
2,450,000.00 3,000,000.00 7,452,253.00 12,213,181.00
119,012.00 223,824.00
5,203,464.00 273,723.00

14,633,712.73 601,772.27
1,524,035.00 2,945,000.00 7,452,253.00 11,625,942.51
0.00 164,514.00
5,162,004.51 273,723.00

90,047,892.00
14,112,300.00 1,000,000.00
68,500.00 1,048,000.00 1,988,102. 00
280,272.00
402,382.00

90,047,892.00
14,112,004.00 999,940.00
0.00 1,056,649.00 1,982,199.00
280,272.00
382,597.00

29,045.00 56.00
19,925.10 4,779,760.41
317,529.00 0.00
5,057.00 59,716.00 15,221.53 1,983,832.67
0.00 0.00 6,917,344.03 1,120,312.00
2,564,493.27 29,834.73
925,965.00 55,000.00 0.00
587,238.49 119,012.00
59,310.00 41,459.49
0.00
0.00 296.00
60.00 68,500.00 -8,649.00
5,903.00 0.00
19,785.00

$3,957.034,435.00 $3.794.774,469.11 $ 162.259,965.89

Excess of Funds Available over Expenditures

$ -25.241.900.68 $ -25.241.900.68

The notes to the financial statements are an integral part of this statement. - 13 -

DEPARTMENT OF EDUCATION STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET BUDGET FUND
"B" LOTTERY FOR EDUCATION YEAR ENDED JUNE 30. 1994

EXHIBIT "E"

FUNDS AVAILABLE
REVENUES
State Appropriation
EXPENDITURES
Pre-Kindergarten for 4-year-olds Computer Hardware/Software in Classrooms Next Generation Schools Distant Learning - Hardware and Cabling Postsecondary Options Educational Technology Centers Safe Schools Grant Media Center and Library Equipment Learning Logic Sites Algebra Classrooms Drug and Anti-Violence Education
Excess of Funds Available over Expenditures

BUDGET

ACTUAL

VARIANCE FAVORABLE (UNFAVORABLE)

$148,122,699.00 $146,254,230.00$ -1,868,469.00
============== -------------- --------------

$ 36,346,000.00 $ 35,565,483.90 $

33,087,500.00 32,889,196.00

1,000,000.00 1,000,000.00

14,138,078.00 14,111,078.00

1,585,221.00

545,855.26

1,236,400.00 1,236,400.00

20,000,000.00 20,000,000.00

38,027,500.00 37,450,000.00

924,000.00

924,000.00

753,000.00

752,700.00

1,025,000.00 1,025,000.00

780,516.10 198,304.00
0.00 27,000.00 1,039,365.74
0.00 0.00 577,500.00 0.00 300.00 0.00

$148,122,699.00 $145,499,713.16$ 2,622,985.84
============== -------------- --------------
$ 754,516.84$ 754,516.84

The notes to the financial statements are an integral part of this statement. - 14 -

DEPARTMENT OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND YEAR ENDED JUNE 30. 1994

EXHIBIT "F"

REVENUES Interest Earned
EXPENDITURES None Recorded
Excess of Revenues over Expenditures OTHER FINANCING USES
Operating Transfers Out Excess of Revenues over Expenditures and Other Financing Uses FUND BALANCE JULY 1, 1993
FUND BALANCE JUNE 30, 1994

ENDOWMENT CORPUS
PUPILS' TRUST FUND -
GEORGIA ACADEMY FOR THE BLIND

$

823.50

0.00

$

823.50

-823.50

$

0.00

13,500.00

$

13,500.00

================

The notes to the financial statements are an integral part of this statement. - 15 -

DEPARTMENT OF EDUCATION NOTES TO THE FINANCIAL STATE:MENTS
JUNE 30, 1994

EXHIBIT "G"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY The Department ofEducation, an organizational unit of the State of Georgia, is part ofthe executive branch ofthe government ofthe State of Georgia. The State Board ofEducation is composed of one member from each Congressional District in the State, appointed by the Governor and confirmed by the Senate. The Board adopts and prescribes rules, regulations and policies as may be necessary for operating of public education in Georgia.
The State School Superintendent is elected by qualified voters of the State. The Superintendent is the Executive Officer of the State Board of Education and the Administrative Officer of the Department of Education. The Superintendent is responsible for the operation and the enforcement ofthe rules, regulations, policies and standards adopted by the State Board ofEducation.
The Department ofEducation does not have authority to determine the amount of funding it will receive from the State of Georgia for any given fiscal year. Such authority is vested in the General Assembly of Georgia. The Department also does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, the Department ofEducation is included within the State of Georgia reporting entity for financial reporting purposes because ofthe significance of its legal, operational and financial relationships with the State ofGeorgia. These reporting entity relationships are defined in Section 2100 ofthe Governmental Accounting Standards Board Codification of Governmental Accounting and Financial Reporting Standards.
FUND ACCOUNTING The Department ofEducation uses funds and account groups to report on its financial position and the results ofits operations determined in conformity with accounting practices prescribed or permitted by statutes and regulations ofthe State ofGeorgia. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group, on the other hand, is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect net expendable available financial resources. Funds and account groups presented in the accompanying financial statements are as follows:
GOVERNMENTAL FUND TYPE
BUDGET FUND - The fund used to account for activities and functions as set forth in the Amended Appropriations Act of 1993-1994. The Budget Fund is similar in nature to a General Fund as identified in generally accepted accounting principles in that the Budget Fund is used to account for all activities except those required to be accounted for in some other fund.
FIDUCIARY FUND TYPES
NONEXPENDABLE TRUST FUND - The fund used to account for assets, revenues and expenditures utilized in accordance with the provisions of a trust established by individual agreement. Nonexpendable
- 16 -

DEPARTMENT OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXlilBIT "G"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FUND ACCOUNTING
FIDUCIARY FUND TYPES NONEXPENDABLETRUSTFUND trust funds are used when only the revenues earned on the principal (corpus) ofthe trust may be expended for the purposes designated in the trust agreement and the principal of the trust agreement must remain intact.
AGENCY FUNDS - The funds used to account for assets held for use by other funds, governments, or individuals.
ACCOUNT GROUPS
GENERAL FIXED ASSETS - The account group used to account for fixed assets used in governmental fund type operations. Fixed assets purchased are recorded at historical cost. Donated fixed assets are recorded at fair market value on the date donated. Disposals are deleted at recorded values. No depreciation has been provided on general fixed assets.
GENERAL LONG-TERM DEBT - The account group used to report the noncurrent portions of certain governmental long-term liabilities, such as claims, judgments and compensated absences, which will be paid from future resources.
BASIS OF ACCOUNTING MEASUREMENT FOCUS
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. Governmental funds should be accounted for using the current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements ofthese funds present increases (i.e., revenues) and decreases (i.e., expenditures) in net current assets. Nonexpendable trust funds, on the other hand, should be accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and all liabilities are included on the balance sheet. Operating statements of these funds present increases, (i.e., revenues) and decreases (i.e., expenses) in net total assets. In accordance with accounting practices prescribed or permitted by the State of Georgia, the Nonexpendable Trust Fund utilizes the current financial resources measurement focus.
GOVERNMENTAL FUND TYPE BUDGET FUND
Except as disclosed in the following paragraphs, units of government of the State of Georgia record their Budget Fund revenues and expenditures in accordance with the modified accrual basis of accounting. Under
the modified accrual basis ofaccounting, revenues are recognized when susceptible to accrual (i.e., when they
become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Revenues that are accrued include primarily State appropriations, Federal
- 17 -

DEPARTMENT OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXIilBIT "G"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING GOVERNMENTAL FUND TYPE BUDGET FUND
grants and entitlements, and certain amounts earned under operating agreements with other parties. Further, the modified accrual basis ofaccounting calls for expenditures, other than accrued interest of general long-term debt, to be recorded when the related fund liability is incurred.
Contractual obligations for services which have not been performed and for goods which have not been delivered at the end of the fiscal year are recognized as expenditures and liabilities in the accompanying
(
financial statements. This accounting practice causes expenditure-driven grant revenues to be accrued based in part on the unexecuted portion of contracts for goods and services. The recognition of encumbrances as expenditures and liabilities is in conformity with accounting practices prescribed or permitted by statutes and regulations ofthe State ofGeorgia, but is not consistent with generally accepted accounting principles, which provide for the recording of encumbrances as a reservation offund balance. Further, revenue recognition for expenditure-driven grants should be based upon expenditures determined in accordance with generally accepted accounting principles.
Prior period adjustments and certain other items are reported as additions to and deductions from fund balances ofthe Budget Fund in the accompanying financial statements. This presentation is in accordance with accounting practices prescribed or permitted by statutes and regulations ofthe State of Georgia, but differs from generally accepted accounting principles in that immaterial adjustments should be reported as current period revenues and expenditures.
FIDUCIARY FUND TYPES NONEXPENDABLE TRUST FUND
The Nonexpendable Trust Fund is maintained in accordance with the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Revenues that are accrued include primarily interest income. Expenditures are recorded when the related fund liability is incurred. This basis of accounting differs from generally accepted accounting principles in that nonexpendable trust funds should be maintained on the accrual basis of accounting.
A statement ofCash Flows is not presented for the Nonexpendable Trust Fund in the accompanying financial statements as required by generally accepted accounting principles.
AGENCY FUNDS The Agency Funds are custodial in nature in that assets are equally offset by liabilities to other funds, governmental units, or individuals. The modified accrual basis of accounting is utilized for recognizing assets and liabilities.
- 18 -

DEPARTMENT OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXlilBIT "G"

NOTE 1: SUM!vfARY OF SIGNIFICANT ACCOUNTING POLICIES
BUDGET Appropriation allotments to the Department of Education are on the basis of budgets submitted by the Department and approved by the Legislature and the Governor. The budgets are compiled in the same manner as all State departments and expenditures are classified by budget unit object classes as provided in Act No. 608 ofGeorgia Laws 1993 (as approved April 28, 1993) and amended by Act No. 622 of Georgia Laws 1994 (as approved February 8, 1994), which is an appropriated budget and is referred to in these notes as the Amended Appropriations Act of 1993-1994.
CASH AND CASH EQUIVALENTS Cash and Cash Equivalents include currency on hand, demand deposits with banks and other financial institutions, and cash management pools that have the general characteristics of demand deposit accounts in that the Department may deposit additional cash at any time and also may withdraw cash at any time without prior notice or penalty.
INVESTMENTS Investments are defined as those financial instruments with terms of three months or more from the date of purchase and certain other securities held for the production of revenue. Investments are stated at cost.
INVENTORIES SUPPLY
Inventories of supplies are valued at first-in, first-out (FIFO) on the Combined Balance Sheet (Statutory Basis). The consumption method is used to account for the use of inventories. Under the consumption method, the costs of inventories are recorded as expenditures when consumed rather than when purchased.
DONATED FOOD Inventories are shown on the Combined Balance Sheet (Statutory Basis) at a value established by the U. S. Department ofAgriculture.
RESERVED FUND BALANCE Reserves represent those portions of fund equity not appropriable for expenditure or legally segregated for a specific future use. The following is a brief description of the reserves reflected in the accompanying financial statements:
FEDERAL FINANCIAL ASSISTANCE The residual portion ofFederal financial assistance revenues not yet expended or encumbered. This amount is restricted for expenditure in future years. This accounting treatment differs from generally accepted accounting principles in that the unearned portion of Federal financial assistance should be reflected as deferred revenue.

- 19 -

DEPARTMENT OF EDUCATION NOTES TO THE FINANCIAL STATE1\1ENTS
JUNE 30, 1994

EXHIBIT "G"

NOTE I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RESERVED FUND BALANCE INVENTORIES SUPPLY Reported inventories, under the consumption method, are offset by a portion of State funds to provide working capital for managing a reasonable level of inventories.
DONATED FOOD Donated food inventories are equally offset by an amount to indicate that they do not constitute "available expendable resources" even though they are a component of net current assets. The fund balance reserve is based on values established by the U.S. Department of Agriculture.
FRANCE-MEDIACTION AND VOCATIONAL MISSION PROGRAMS The residual portion ofa grant awarded by the French Government not yet expended or encumbered. This amount is restricted for expenditures in future years.
GEORGIA ACADEMY FOR THE BLIND - PUPILS' TRUST FUND The fund used to account for the principal of an endowment to be preserved intact and invested with the resultant income to be transferred to the Fiduciary Fund Type - Agency Funds (Student Activities Account Georgia Academy for the Blind).
GEORGIA-LORRAINE EXCHANGE PROGRAM The residual portion ofa grant awarded by the French Government not yet expended or encumbered. This amount is restricted for expenditure in future years.
GEORGIA SCHOOL FOR THE DEAF - SCHOOL IMPROVEMENTS The proceeds from timber sales not yet expended or encumbered. This amount is restricted for expenditure in future years.
LEGISLATIVE VIDEO PROGRAM The residual portion of a grant awarded by various associations not yet expended or encumbered. This amount is restricted for expenditure in future years.
MELLON SCHOOUCOLLEGE COLLABORATION GRANT The residual portion ofa grant awarded by the Council of Chief State School Officers not yet expended or encumbered. This amount is restricted for expenditure in future years.
SCHOOL NURSE PROGRAM The residual portion of a grant awarded by the Department of Human Resources not yet expended or encumbered. This amount is restricted for expenditure in future years.

-20-

DEPARTMENT OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXHIBIT "G"

NOTE I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RESERVED FUND BALANCE STATE TEACHER OF THE YEAR PROGRAM The residual portion ofa grant awarded by the Council of Chief State School Officers not yet expended or encumbered. This amount is restricted for expenditure in future years.
UNITED STATES SENATE YOUTH PROGRAM The residual portion of a grant awarded by the William Randolph Hearst Foundation not yet expended or encumbered. This amount is restricted for expenditure in future years.
VOCATIONAL EDUCATION GENERAL OBLIGATION FUNDS The residual portion of refunds from local school systems due to the Georgia State Financing and Investment Commission at fiscal year end. This amount is restricted for payment to the Georgia State Financing and Investment Commission.
COMPENSATED ABSENCES Compensated absences represent obligations of the Department relating to employee's rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting accumulating annual leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion ofthis obligation as this amount will not be liquidated with expendable available financial resources. Funds are provided in the appropriation of funds each year to the Department to cover the cost of annual leave paid to terminated employees.
The liability for compensated absences at year end is reported in the General Long-Term Debt Account Group for governmental funds.
MEMORANDUM ONLY - TOTAL COLUMNS Total columns on the Combined Balance Sheet (Statutory Basis) are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position 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.
COMPARATIVE DATA Comparative total data for the prior year have been presented in the accompanying financial statements in order to provide an understanding ofchanges in the Department's financial position and operations. However, comparative data have not been presented in all statements because their inclusion would make certain statements unduly complex and difficult to understand.
NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds of the State of Georgia cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu of a surety bond, the depository may pledge as
- 21 -

DEPARTMENT OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXIIlBIT "G"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES collateral any one or more ofthe following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59:
(1) Bonds, bills, notes, certificates ofindebtedness or other direct obligations ofthe United States or of the State of Georgia.
(2) Bonds, bills, notes, certificates ofindebtedness or other obligations ofthe counties or municipalities ofthe State of Georgia.
(3) Bonds ofany public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose.
(4) Industrial revenue bonds and bonds of development authorities created by the laws ofthe State of Georgia.
(5) Bonds, bills, certificates of indebtedness, notes, 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 Banlc, the Federal Intermediate Credit Banlc, the Central Banlc for Cooperatives, the Fann Credit Banlcs, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
(6) Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation.
As authorized in the Official Code of Georgia Annotated Section 50-17-53, the State Depository Board has adopted policies which allow agencies ofthe State of Georgia the option of exempting demand deposits from the collateral requirements.
CATEGORIZATION OF DEPOSITS For purposes of analysis of custodial credit risk, cash deposits consist of all banlc balances which include demand deposits and/or interest bearing accounts. These banlc balances are categorized below in order to provide information about the extent to which such deposits are exposed to custodial credit risk.
Category 1 - Amounts covered by depository insurance or collateralized with securities (at market value) held by the Department or by its agent in the Department's name.
Category 2 - Amounts collateralized with securities (at market value) held by the financial institution's trust department or agent in the Department's name.

- 22-

DEPARTMENT OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXIIlBIT "G"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS

CATEGORIZATION OF DEPOSITS Category 3 - Amounts collateralized with securities (at market value) held by the financial institution or by its trust department or agent, but not in the Department's name, and amounts uncollateralized.

Canying ~

Bank Balance

Risk Categories

2

3

Cash Deposits

S -967 949 23 S 2 964 970 86 S 972.776 00 S 87 969,91 S I 904.224,95

CATEGORIZATION OF INVESTMENTS Investments are stated at cost. The carrying amount shown below is maintained in an investment pool by the Office of Treasury and Fiscal Services.

Type ofInvestment

Carrying Amount

Market Value

State Investment Pool

$ 170,689.00 $ 170,689.00

NOTE 3: OPERATING LEASES

The Department ofEducation has entered into certain agreements to lease real property and equipment which
are classified as operating leases. These leases generally contain provisions that, at the expiration date ofthe
original term ofthe lease, the Department has the option ofrenewing the lease on a year-to-year basis. Future
minimum commitments for operating leases as ofJune 30, 1994, are listed below. Amounts are included only for multi-year leases and for cancellable leases for which an option to renew for the subsequent fiscal year has been exercised.

Fiscal Year Ending June 30

1995

$ 136 827.75

Expenditures for rental of real property and equipment under operating leases for the year ended June 30, 1994, totaled $512,054.75.

NOTE 4: INSTALLMENT PURCHASE COMMITMENTS

The Department of Education acquires certain property and equipment through multi-year installment purchases with varying terms and options. The majority ofthese agreements contain fiscal funding clauses in accordance with O.C.G.A. 50-5-64 which prohibits the creation of a debt to the State of Georgia for the
payment ofany sums under such agreements beyond the fiscal year of execution if appropriated funds are not available. If renewal of such agreements is reasonably assured, however, installment purchases requiring

- 23 -

DEPARTMENT OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXIIlBIT "G"

NOTE 4: INSTALLMENT PURCHASE COMMITMENTS

appropriation by the General Assembly of Georgia are considered noncancellable for financial reporting purposes.

At June 30, 1994, future minimum commitments under installment purchases are as follows:

Fiscal Year Ending June 30

1995 1996 1997 1998 1999

$ 57,167.88 48,767.62 44,917.52 35,698.32 12,291.24

Total Future Minimum Commitments

$ 198,842.58

Less: Amounts Representing Interest

26,286.38

Present Value ofFuture Minimum Commitments

$ 172,556.20

NOTE 5: CHANGES IN GENERAL FIXED ASSETS

In accordance with the statutory definition of moveable personal property as defined in Official Code of

Georgia Annotated Section 50-16-161, only those items with an acquisition cost of$1,000.00 or greater are

reflected in the General Fixed Assets Account Group.



The following is a summary of changes of equipment in the General Fixed Assets Account Group during the fiscal year:

Balance July 1, 1993

$18,440,832.43

Additions Deductions

5,529,641.28 406,984.48

Balance June 30, 1994

$23,563,489.23

NOTE 6: GENERAL LONG-TERM DEBT

CHANGES IN GENERAL LONG-TERM DEBT A summary of changes in General Long-Term Debt for the year ended June 30, 1994, follows:

- 24-

DEPARTMENT OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXHIBIT "G"

NOTE 6: GENERAL LONG-TERM DEBT

Compensated Absences

Installment Purchase Commitments

Total

Balance July 1, 1993

$2,592,329.70 $ 24,720.81 $ 2,617,050.51

Additions Annual Leave Earned and Utilized (Net) Salaries Salary Related Fringe Benefits (*) Current Year Purchases
Deductions

113,018.14 206,959.11

178,512.00 30,676.61

113,018.14 206,959.11 178,512.00
30,676.61

Balance June 30, 1994

$ 2.912,306.25 $ 172,SS~.20 $ 3,Q84,863.1S

(*) Includes related fringe benefits applicable to compensated absences at July 1, 1993.

NOTE 7: DEFERRED COMPENSATION PLAN

The State ofGeorgia offers its employees a deferred compensation plan in accordance with Internal Revenue Code Section 457. The plan, available to employees of the State of Georgia and county health departments, permits such employees to defer a portion of their salary until future years. Participants choose the option or options in which they wish to participate. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. All amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property, or rights are (until paid or made available to the employee or other beneficiary) solely the property or rights ofthe State ofGeorgia subject only to the claims of the State's general creditors. Participant's rights under the plan are equal to those of a general creditor of the State of Georgia in an amount equal to the fair market value ofthe deferred account ofeach participant. Financial information relative to the plan is presented in the financial report ofthe State Personnel Board - Merit System ofPersonnel Administration for the year ended June 30, 1994.

NOTE 8: RETIREMENT PLANS

EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA The Department ofEducation participates in the Employees' Retirement System of Georgia, a single-employer, defined benefit pension plan. The Employees' Retirement System of Georgia was established by the General Assembly of Georgia for the purpose of providing retirement allowances for employees of the State of Georgia. The Retirement System is funded through a combination of employee and employer contributions.

-25 -

DEPARTMENT OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXHIBIT "G"

NOTE 8: RETIREMENT PLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA Employees are required to contribute a graduated percentage ofannual compensation. Employer contributions are for a specified percentage ofactive member payroll determined annually by an actuarial valuation. During the year ended June 30, 1994, the Department contributed $3,476,246.06 to the Employees' Retirement System ofGeorgia. Participation in the Retirement System is not segregated by employee groups ofindividual governmental units and the Department has no further liability under the retirement system other than future employer contributions as established for each fiscal year. Information relative to the plan description, funding status and historical trends is presented in the financial report ofthe Employees' Retirement System of Georgia for the year ended June 30, 1994.
TEACHERS RETIREMENT SYSTEM OF GEORGIA The Department ofEducation participates in the Teachers Retirement System ofGeorgia, a single-employer, defined benefit pension plan. The Teachers Retirement System of Georgia was established by the General Assembly of Georgia for the purpose of providing retirement allowances for employees of the State of Georgia. The Retirement System is funded through a combination of employee and employer contributions. Employees are required to contribute a graduated percentage ofannual compensation. Employer contributions are for a specified percentage ofactive member payroll determined annually by an actuarial valuation. During the year ended June 30, 1994, the Department contributed $553,309.06 to the Teachers Retirement System of Georgia. Participation in the Retirement System is not segregated by employee groups of individual governmental units and the Department has no further liability under the retirement system other than future employer contributions as established for each fiscal year. Information relative to the plan description, funding status and historical trends is presented in the financial report ofthe Teachers Retirement System of Georgia for the year ended June 30, 1994.
GEORGIA DEFINED CONTRIBUTION PLAN The State ofGeorgia also provides retirement coverage for temporary, seasonal, and part-time employees who are not eligible for membership in the Employees' Retirement System of Georgia referred to above through a single-employer defined contribution plan. The Georgia Defined Contribution Plan was established by the General Assembly of Georgia and is administered by the Board of Trustees of the Employees' Retirement System of Georgia. Covered employees are required to contribute 7.5% of their gross salary, with no matching contribution by the employer. A member who terminates employment may apply for a refund of contributions and interest. Benefits are based solely on the amount contributed by the employee plus investment earnings. Upon discretion ofthe Board ofTrustees, members who leave employment with less than $3,500.00 credited to their account may be required to make a lump-sum withdrawal. Members are eligible to retire at the age of65 with the option ofreceiving a periodic payment based on mortality tables and interest accumulation as adopted by the Board of Trustees of the Employees' Retirement System of Georgia. Information relative to the plan description and funding status is presented in the financial report of the Employees' Retirement System ofGeorgia for the year ended June 30, 1994.

- 26-

DEPARTMENT OF EDUCATION NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXIIlBIT "G"

NOTE 9: LEAVE POLICIES
Employees earn ten hours of sick leave each month with a maximum accumulation of ninety days. Unused accumulated sick leave does not vest with the employee and is forfeited upon retirement or termination of employment.
Employees earn annual leave ranging from ten to fourteen hours each month depending upon the employees' length ofcontinuous State service with a maximum accumulation offorty five days. Employees are paid for unused accumulated annual leave upon retirement or termination of employment. See Note 1 - Compensated Absences
Certain employees who retire with one hundred and twenty days or more of forfeited annual and sick leave are entitled to additional service credit in the Employees' Retirement System of Georgia.
NOTE 10: NONMONETARY TRANSACTIONS
The Georgia State Financing and Investment Commission (GSFIC), a unit of State government, is responsible for the issuance of state debt and for the investment and accounting for proceeds derived from the issuance of state debt. In addition, GSFIC-is authorized to acquire and construct projects for the benefit of units of State government or to contract with units of State government for the construction or acquisition of capital outlay projects. During the fiscal year ended June 30, 1994, the Georgia State Financing and Investment Commission paid $188,931,303.63 to various vendors for approved projects related to the Department of Education.
Certain programs administered by the Federal government provide donated commodities to the Department ofEducation in lieu of monetary assistance. An analysis of nonmonetary assistance received and the values assigned by the Federal government during the year under review is reflected below:

Agriculture, U. S. Department of Food Distribution Temporary Emergency Food Assistance

$ 28,985,373.00 $ 5,161,804.00

In accordance with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, the revenues and expenditures associated with the nonmonetary assistance are not reflected on Exhibit "C", Statement ofFunds Available and Expenditures.

NOTE 11: CONTINGENCIES

Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. This could result in refunds to the grantor agency for any expenditures which are disallowed under grant terms. The amount of expenditures which may be disallowed by the grantor cannot be determined at this time although the Department expects such amounts, if any, to be immaterial to its overall financial position.

- 27 -

DEPARTMENT OF EDUCATION NOTES TO THE FINANCIAL STATE:MENTS
JUNE 30, 1994

EXlflBIT "G"

NOTE 11: CONTINGENCIES
Litigation, claims and assessments filed against the Department ofEducation, if any, are generally considered to be actions against the State of Georgia. Pursuant to the Official Code of Georgia Annotated, the Department ofAdministrative Services maintains a program of purchased insurance and self- insurance which provides coverage for such litigation, claims and assessments. Accordingly, significant litigation, claims and assessments pending against the State ofGeorgia are disclosed in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 1994.
NOTE 12: BONDING INFORMATION
The State Superintendent of Schools and all employees ofthe Department ofEducation are bonded under a Public Employees Blanket Bond written by Employers Insurance ofWausau, their Bond No. 1450-00-110723, on which the premium was paid to October 1, 1994. Under this agreement the Public Employee Dishonesty Coverage insures the Department to a maximum of$1,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees. The Faithful Performance ofDuty Coverage insures the Department to a maximum of $100,000.00 against loss sustained from failure of its employees to perform faithfully their duties or to account properly for all monies and property received by virtue of their position or employment.
All employees ofthe Department ofEducation are also bonded under a Commercial Crime Policy written by the United States Fire Insurance Company, their Policy No. 626011675 2, on which the premium was paid to October 1, 1994. Under this additional public employee dishonesty coverage, the policy insures the Department to a maximum of $4,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees.

- 28 -

SUPPLEMENTARY INFORMATION -29-

DEPARTMENT OF EDUCATION COMBINING BALANCE SHEET (STATUTORY BASIS)
BUDGET FUND JUNE 30, 1994

EXHIBIT "H"

ASSETS Cash and Cash Equivalents Accounts Receivable
State Appropriation Federal Financial Assistance Other
Inventories Supply Donated Food

"A" DEPARTMENT OF
EDUCATION

"B" LOTTERY FOR EDUCATION

TOTAL

$ 506,485.32 $ 506,485.32

$16,094,251.92 $72,912,376.00$ 89,006,627.92

90,304,396.28

90,304,396.28

8,748,077.83

8,748,077.83

$115,146,726.03$ 72,912,376.00 $188,059,102.03

$ 75,169.94 1,375,823.93
-------------$---1-,4-5--0-,9-9--3-.8--7

$ 75,169.94 1,375,823.93
-------------$---1-,4--5-0-,9--9-3-.8--7

Total Assets

$116,597,719.90 $ 73,418,861.32 $190,016,581.22
============== ============== ==============

LIABILITIES AND FUND EQUITY

Liabilities Cash Overdraft Accounts Payable Contracts Payable Grants Payable Payroll Withholdings Total Liabilities

$ 2,436,890.34 8,206,137.02 $

$ 77,694.13

2,436,890.34 8,283,831.15

5,063,122.20

5,063,122.20

95,282,190.16 72,583,407.34 167,865,597.50

-----3-5-3-,1--0-0-.9--2 -------3-,2-4--3-.0-1- -----3-5-6-,3--4-3-.9--3

$111,341,440.64$ 72,664,344.48 $184,005,785.12

Fund Equity Fund Balances Reserved Federal Financial Assistance Inventories Supply Donated Food Food Distribution Program Temporary Emergency Food Assistance Program France-Mediaction and Vocational Mission Programs Georgia-Lorraine Exchange Program Georgia School for the Oeaf School Improvements Legislative Video Program Mellon School/College Collaboration Grant School Nurse Program State Teacher of the Year Program United States Senate Youth Program Vocational Education General Obligation Funds Unreserved Designated Surplus Regular Lottery for Education Total Fund Equity

$ 1,104,179.48 85,000.00 252,055.47
1,123,768.46 13,227.45 1,228.45 38,719.23 500.00 20.83 571.93 1,855.54 2,392.32 3,116.90

$ 1,104,179.48 85,000.00 252,055.47
1,123,768.46 13,227.45 1,228.45 38,719.23 500.00 20.83 571.93 1,855.54 2,392.32 3,116.90

2,629,643.20

2,629,643.20

-------------- $-----7-5-4-,5--1-6-.8--4 -----7-5-4-,-5-1-6-.8--4

$---5-,2-5--6-,2--7-9-.2--6 $-----7-5-4-,-5-1-6-.8--4 $---6-,0--1-0-,7--9-6-.1--0

Total Liabilities and Fund Equity

$=1=1=6=,=5=9=7=,7==1=9=.9==0

$==7=3=,4==1=8=,8==6=1=.3=2=

$190,016,581.22
==============

See notes to the financial statements.

- 30 -

DEPARTMENT OF EDUCATION COMBINING STATEMENT OF CHANGES IN FUND BALANCES (STATUTORY BASIS)
BUDGET FUND YEAR ENDED JUNE 30, 1994

EXHIBIT "I"

"A" DEPARTMENT OF
EDUCATION

"B" LOTTERY FOR
EDUCATION

TOTAL

FUND BALANCES - JULY 1

Reserved Unreserved
Designated Surplus

$ 4,562,975.59 1,930,232.11 $

$ 4,562,975.59 0.00 1,930,232.11

$ 6,493,207.70$

0.00 $ 6,493,207.70

ADDITIONS

Adjustments to Prior Year's Accounts Payable Grants Payable
Change in Reserve for Inventory Donated Food Program Food Distribution Program Temporary Emergency Food Assistance Program
Excess of Funds Available over Expenditures Exhibit "J"
Reimbursement of Prior Year's Expenditures Grants Other

$ 427,457.23 24,865,747.92

$ 427,457.23 24,865,747.92

-266,056.35 311,031.57
-25,241,900.68 $
3,731,476.01 125,692.48

-266,056.35 311,031.57
754,516.84 -24,487,383.84
3,731,476.01 125,692.48

$ 3,953,448.18$ 754,516.84$' 4,707,965.02

DEDUCTIONS

Unreserved Fund Balance (Surplus) Returned to Office of Treasury and Fiscal Services Year Ended June 30, 1993
Adjustment to Prior Year's Accounts Receivable
Refund of Private Grant Reserved Fund Balance Carried Over from
Prior Year as Funds Available
FUND BALANCES - JUNE 30

$ 1,930,232.11
27,891.63 126.00
3,232,126.88
--------------
$ 5,190,376.62
--------------

$ 1,930,232.11
27,891.63 126.00
3,232,126.88
--------------
$ 5,190,376.62
--------------

(To Exhibit "H") See notes to the financial statements.

$ 5,256,279.26$ 754,516.84$ 6,010,796.10
============== ============== ==============
- 31 -

DEPARTMENT OF EDUCATION COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30. 1994

EXHIBIT "J" Page 1

"A" DEPARTMENT OF
EDUCATION

"B" LOTTERY FOR
EDUCATION

TOTAL

FUNDS AVAILABLE

REVENUES

STATE APPROPRIATION General Appropriation Amended Appropriation Governor's Emergency Fund Budget Adjustments

$3,153,523,530.00 $ 85,434,351.00 405,487.00 -166.732.00

62,754,078.00 $3,216,277,608.00 95,232,820.00 180,667,171.00
405,487.00 -9.864.199.00 -10.030.931.00

Less: Lapsed Funds

$3,239,196,636.00 $ 148,122,699.00 $3,387,319,335.00

3,750,000.00

1,868.469.00

5,618,469.00

Total State Appropriation

$3.235.446.636.00 $ 146.254.230.00 $3.381.700.866.00

FEDERAL REVENUES

$ 508.786.886.29

$ 508.786.886.29

OTHER REVENUES RETAINED

Audit Contracts

$

Court Settlement

Equipment Funding for Vocational Education

High School Program

Georgia State Financing and Investment

Commission

Funding for Student Information System Project

Georgia State Financing and Investment

Commission

Grants

France-Mediaction and Vocational Mission

Programs

lndi9ent Care Trust Fund Program

Lettie Pate Evans Foundation

Next Generation School Grants

United States Senate Youth Program

Indirect Services Funding

Department of Administrative Services

Lottery Proceeds (State Schools)

Atlanta School for the Deaf

General Instruction/State

Georgia Academy for the Blind

Georgia Regional Library for the Blind

Georgia School for the Deaf

Reimbursements

For Honorariums

For School Lunch and Milk Program

For Telephone Expenses

For Workshop Expenses

Rents Received

Sales of Photocopies and Publications

Video Fees

664,571.29 1,196.36
11,297,168.05 5,915,652.18 15 003.38 344:305.00 50,000.00 1,943,699.50 1,000.00 340,000.00 66,696.72 4,447.00 99,083.32 12,275.11 232,699.54 532,955.80 176,266.53 47.65 7,338.92 1,620.00 77,448.21 283,444.70

$

664,571.29

1,196.36

11,297,168.05
5,915,652.18
15,003.38 344,305.00
50,000.00 1,943,699.50
1,000.00 340,000.00
66,696.72 4,447.00
99,083.32 12,275.11 232,699.54 532,955.80 176,266.53
47.65 7,338.92 1,620.00 77,448.21 283,444.70

Total Other Revenues Retained

$ 22,066,919.26

$ 22,066,919.26

Total Revenues CARRY-OVER FROM PRIOR YEAR

$3.766.300.441.55 $ 146.254.230.00 $3.912.554.671.55

Transfer from Reserved Fund Balance Federal Financial Assistance Inventories Georgia-Lorraine Exchange Program Georgia School for the Deaf School Improvements Legislative Video Program Mellon School/College Collaboration Grant QBE Formula Grants State Teacher of the Year Program United Stated Senate Youth Program Total Carry-Over from Prior Year

$

991,187.04

85,000.00

1,228.45

238,920.00 500.00 11. 79
1,908,260.00 5,080.77 1,938.83

$ 3,232,126.88

$

991,187.04

85,000.00

1,228.45

238,920.00 500.00 11. 79
1,908,260.00
51.,098308..7873

$_ __..3......2..3.~2..,.,_1__2__6__.__8__8_

Total Funds Available

$3,769.532.568.43 $ 146.254.230.00 $3.915.786.798.43

See notes to the financial statements.

- 32 -

DEPARTMENT DF EDUCATION COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30, 1994

EXHIBIT "J" Page 2

EXPENDITURES PERSONAL SERVICES
Salaries and Wages Employer's Contributions for:
F.I.C.A. Retirement Health Insurance Personal Liability Insurance Unemplo.yment Compensation Insurance Workers Compensation Insurance Assessments by Merit System
REGULAR OPERATING EXPENSES Motor Vehicle Expenses Supplies and Materials Repairs and Maintenance Rents (Other than Real Estate) Insurance and Bonding Tuition and Scholarships Other Operating Expenses (See Schedule) Duplicating and Rapid Copy Publications and Printing
TRAVEL MOTOR VEHICLE PURCHASES EQUIPMENT
Equipment Purchases Lease/Purchase of Equipment Rental of Equipment
COMPUTER CHARGES Other Cqsts Supplies and Materials Repairs and Maintenance Rents (Other than Real Estate) Other Operating Expenses (See Schedule) Software Equipment Equipment Purchases Per Diem, Fees and Contracts Per Diem and Fees Contracts Computer Billings, DOAS
REAL ESTATE RENTALS TELECOMMUNICATIONS PER DIEM, FEES AND CONTRACTS
Per Diem and Fees Contracts
CAPITAL OUTLAY Per Diem, Fees and Contracts Contracts
QI!:!IB UTILITIES
See notes to the financial statements.

"A"
DEPARTMENT OF EDUCATION

"8"
LOTTERY FOR EDUCATION

TOTAL

$ 26,758,88.05 1 , 631 , 831. 64 4,009,141.07 3,568,829.80 477,264.00 29,616.00 377,651.00 134,330.66
$ 36,987,552.22

$

55,242.37

1,408,067.78

1,416,021.38

303,145.17

53,220.24

6,850.00

1,035,530.79

289,861.98

286,371.33

$ 4,854,311.04

$_ _ _9__6"""8_.,_.,5""21._.""'o_o_

$_ _ _11..3...,..8...9....6_._7__2__

$

158,244.82

33,614.77

30,344.30

$_ _ _2. ,.2"""2.......2.._.03.._._.8_9_

$

770,455.50

3,625,361.81

30.00

120,720.48

109,377.29

9,781,565.48

215,950.00 2,463,483.87
691,616.90

$ 17,778,561.33

$ 1,483,479.24

$ 1,077 .230.59

$ 1,424,977.72 12,777,429.17
$ 14,202,406.89

$_ _......::,3.::..8._6.,'""'5.::.8.'""o~o $_ _ _8__6__1_..,..5..,...21_._o_..5..

$ 26,758,888.05 1,631,831.64 4,009,141.07 3,568,829.80 477,264.00 29,616.00 377,651.00 134,330.66
$ 36,987,552.22

$

55,242.37

1,408,067.78

1,416,021.38

303,145.17

53,220.24

6,850.00

1,035,530.79

289,861.98

286,371.33

$ 4,854,311.04

$_____96_.8...._5.2..1.=-._o_o 1
$_ _...,1...:1..._3..,8,..,.9.6...._.7. -2

$

158,244.82

33,614.77

30,344.30

$_ __....22-:2...,...2.._0_3--._8__9_

$

770,455.50

3,625,361.81

30.00

120,720.48

109,377.29

9,781,565.48

215,950.00 2,463,483.87
691,616.90

$ 17,778,561.33

$ 1,483,479.24

$ 1,077,230.59

$ 1,424,977.72 12,777,429.17
$ 14,202,406.89

$_ _......::,3,...8..,6,""'5..._8_,0.:.:,.0 $_ _ _86...1..,..5...2...1.......0._5__

- 33 -

DEPARTMENT OF EDUCATION COMBINING STATEMENT OF FUNDS AVAILABLE ANO EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30, 1994

EXHIBIT "J" Page 3

"A"
DEPARTMENT OF EDUCATION

EXPENDITURES

OTHER

QBE FORMULA GRANTS:

Kindergarten/Grades 1 - 3

Grades 4 - 8

Grades 9 - 12

High School Laboratories

Vocational Education Laboratories

Special Education

Gifted

.

Remedial Education

Staff Development and Professional Development

Media

Indirect Cost

Pupil Transportation

Local Fair Share

Mid-Term Adjustment Reserve

$ 759,921,314.00 721,385,180.00 297,422,530.00 124,988,870.00 102,574,758.00 278,830,860.00 40,026,562.00 59,244,823.00 28,987,901.00 87,721,767.00 600,119,184.00 126,831,106.00
-614,197,789.00 68,563,220.00

$2,682,420.286.00

OTHER CATEGORICAL GRANTS: Equalization Formula Sparsity Grants In School Suspension Special Instructional Assistance Middle School Incentive Special Education Low-Incidence Grants

$ 144,854,014.00 2,966,091.00
20,901,157.00 51,051,591.00 56,908,600.00
411,712.00

$ 277.093.165.00

NON-QBE GRANTS: Education of Children of Low-Income Families Retirement (H.B. 272 and H.B. 1321) Instructional Services for the Handicapped Tuition for the Multi-Handicapped Severely Emotionally Disturbed School Lunch (Fed~ral) School Lunch (State) Supervision and Assessment of Students and Beginning Teachers and Performance-Based Certification Regional Education Service Agencies Georgia Learning Resources System High School Program Special Education in State Institutions Governor's Scholarships Vocational Research and Curriculum Even Start Salaries and Travel of Public Librarians Public Library Materials Talking Book Centers Public Library M&0 Child Care Lunch Program (Federal) Chapter II - Block Grant Flow Through Payment of Federal Funds to Board of Technical and Adult Education Education of Homeless Children/Youth Innovative Programs Next Generation School Grants Limited English - Speaking Students Program Drug-Free School (Federal) Emergency Immigrant Education Program Title II Math/Science Grant (Federal) Robert C. Byrd Scholarship (Federal) Health Insurance - Non Cert. Personnel and Retired Teachers Pre-School Handicapped Program Mentor Teachers Advanced Placement Exams Family Connection Grants Youth Apprenticeship Grants Serve America

$ 186,023,794.03 4,950,000.00 54,732,103.21 1,065,437.85
38,965,519.00 187,111,477.77 24,213,192.00
2,032,955.00 7,072,130.00 3,397,225.90 28,379,567.59 3,673,574.00 2,702,000.00
293,213.00 2,720,906.00 11,183,401.47 5,718,136.33
911,019.00 4,039,390.00 24,579,610.97 9,663,513.00 14,633,712.73
601,772.27 1,524,035.00 2,945,000.00 7,452,253.00 11,625,942.51
164,514.00 5,162,004.51
273,723.00 90,047,892.00 14,112,004.00
999,940.00 1,056,649.00 1,982,199.00
280,272.00 382,597.00 $ 756.672,676.14

"B"
LOTTERY FOR EDUCATION

TOTAL
$ 759,921,314.00 721,385,180.00 297,422,530.00 124,988,870.00 102,574,758.00 278,830,860.00 40,026,562.00 59,244,823.00 28,987,901.00 87,721,767.00 600,119,184.00 126,831,106.00
-614,197,789.00 68,563,220.00
$2,682.420,286.00 $ 144,854,014.00
2,966,091.00 20,901,157.00 51,051,591.00 56,908,600.00
411,712.00 $ 277.093.165.00 $ 186,023,794.03
4,950,000.00 54,732,103.21
1,065,437.85 38,965,519.00 187,111,477.77 24,213,192.00 2,032,955.00
7,072,130.00 3,397,225.90 28,379,567.59 3,673,574.00 2,702,000.00
293,213.00 2,720,906.00 11,183,401.47 5,718,136.33
911,019.00 4,039,390.00 24,579,610.97 9,663,513.00 14,633,712.73
601,772.27 1,524,035.00 2,945,000.00 7,452,253.00 11,625,942.51
164,514.00 5,162,004.51
273,723.00 90,047,892.00 14 , 112,004. 00
999,940.00 1,056,649.00 1,982,199.00
280,272.00 382,597.00 $ 756,672,676.14

See notes to the financial statements.

- 34 -

DEPARTMENT OF EDUCATION COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30. 1994

EXHIBIT "J" Page 4

EXPENDITURES OTHER
LOTTERY FOR EDUCATION: Pre-Kindergarten for 4-year-olds Personal Services Salaries and Wages Employer's Contributions for: F.I.C.A. Retirement Health Insurance Personal Liability Insurance Assessments by Merit System Other Costs Supplies and Materials Insurance and Bonding Grants to Counties, Cities ~nd Civil Divisions Other Operating Expenses (See Schedule) Duplicating and Rapid Copy Publications and Printing Travel Equipment Equipment Purchases Computer Charges Software Telecommunications Per Diem, Fees and Contracts Per Diem and Fees
Lottery Grants Computer Hardware/Software in Classrooms Next Generation Schools Distant Learning - Hardware and Cabling Postsecondary Options Educational Technology Centers Safe Schools Grant Media Center and Library Equipment Learning Logic Sites Algebra Classrooms Drug and Anti-Violence Education
Total Other Total Expenditures Excess of Funds Available over Expenditures

"A" DEPARTMENT OF
EDUCATION

"8"
LOTTERY FOR EDUCATION

IQll!..

$

170,163.83 $

170,163.83

2,845.30 20,414.05 21,270.60 2,928.00
851. 64

2,845.30 20,414.05 21,270.60 2,928.00
851.64

19,964.15 36.00

19,964.15 36.00

35,188,544.98 l,23B.26 3,136.52 741.87
24,822.75

35,188,544.98 1,238.26 3,136.52 741.87
24,822.75

85,150.13

85,150.13

4,253.00 144.04

4,253.00 144.04

18,978.78

18,978.78

$ 35,565,483.90 $ 35,565,483.90

32,889,196.00 1,000,000.00 14,111,078.00 545,855.26 1,236,400.00 20,000,000.00
37,450,000.00 924,000.00 752,700.00
1,025,000.00

32,889,196.00 1,000,000.00 14,111,078.00 545,855.26 1,236,400.00 20,000,000.00
37,450,000.00 924,000.00 752,700.00
1,025,000.00

$_......1...4._5.....4..a9...9...713.16 $ 145.499.713.16

$3,717,047,648.19 $_....1...4.,.5...,..4...9...9....713.16 $3,862,547.361.35

$3,794,774,469.11 $ 145,499,713.16 $3,940,274,182.27

-25,241,900.68

754,516.84 -24,487,383.84

$3.769,532,568.43 $ 146,254,230.00 $3.915.786,798.43

See notes to the financial statements.

- 35 -

DEPARTMENT OF EDUCATION COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUNDS YEAR ENDED JUNE 30 1 1994

EXHIBIT "K" Page 1

Atlanta Area School for the Deaf Student Activities Account Vending Machine Account
Barber, Janette, Fund Charitable Contributions Civil Rights Act of 1964, Title IV
Equity Workshop Edenfield, Myrtice, Fund Educational Technology Training Education's Leadership Academy Financial Assistance Fees Fine Arts Education Advisory Council Georgia Academy for the Blind
Student Activities Account Georgia Curriculum Director's Account Georgia School for the Deaf
Athletic Account Clemmons, Polly, Fund Jones, Jesse Forbes, Memorial Fund Kroger Account Miscellaneous Account Needy Children's Fund Registration Account Student Activities Account Student Bank Vocational Projects Fund Work Incentive Account Hazardous Materials and School Maintenance Section Instructional Technology Fund International Education Fund International Exchange Program Fund Leadership Skills Development Workshop Library for the Blind Marketing and Distributive Education Georgia Association of Distributive
Education Clubs of America In-Service Conference Account Media Services Workshop Fund Middle Georgia School Service Center Nutrition Seminar Programs of Education and Career Exploration Conference Account Professional Practices Commission Public School Recruitment Services Public School Standards (Parental Involvement) Quality Basic Education Collaboration Conference Fund Related Vocational Instruction Enrichment Camp Sachsen-Anhalt Exchange School Improvement Workshop Schools of Excellence
See notes to the financial statements.

ASSETS/ LIABILITIES JULY 1. 1993

ADDITIONS

DELETIONS

ASSETS/ LIABILITIES JUNE 30 1 1994

$

5,311.28 $

1,123.97

9,537.57

725.65 9,253.44
320.52 7,500.38 4,120.40 1,710.82
195,625.47 351.88
456.98 533.36 1,323.92
1,848.87 31,150.29
3,002.07 2,848.50 2,118.35
651.23 2,028.86
1,595.28
2,971.65 359,733.34
24.89 3,756.91

13,165.47 $ 5,929.56
266.37 1,722.76

14,662.91 $ 5,951.05 1,200.00 1,685.00

3,813.84 1,102.48 8,603.94
37.76

625.00 269.26 1,523.98 44,830.00
25.00

1,330.95 600.00
1,493.97 39,825.05
110.18 1,661.93

19.70 8,922.70
350.53 12,505.33 4,035.22
48.89

57,866.03 36,222.35

65,471.98 25,787.88

188,019.52 10,786.35

19,472.33 27.21 35.94
1,080.77 2,813.02 57,747.21 10,707.22 3,485.21 89,101.32
81.50 16,926.10

15,468.35 100.00 101.00 106.96
2,687.74 30,314.17 10,135.51
6,187.62 88,710.19
15,371.60

4,460.96 460.57
1,258.86 973.81
1,974.15 58,583.33
3,573.78 146.09
2,509.48 732.73
3,583.36

7,360.00 44,208.79
390.00

3,367.95 207,014.53
88.55

1,595.28 3,992.05 2,971.65 196,927.60
24.89 4,058.36

22,552.90 30.54
10,143.84
14,566.97
354.35 1,902.39 1,766.32
262.85
625.46
42,876.86 3,441.66
3,718.84

119,216.00
2,442.00 1,725.00
165.00
360.00 2,120.43 4,169.75
567.50
75,382.86 147.70
11,960.00 30,780.00

110,524.67 30.54
10,260.74 1,657.76 1,160.91
439.25 2,908.75 3,359.48
649.50
70,158.22 3,051.42
514.00 32,165.36

31,244.23
2,325.10 67.24
13,571.06
275.10 1,114.07 2,576.59
180.85
625.46
48,101.50 537.94
11,446.00 2,333.48

- 36 -

DEPARTMENT OF EDUCATION COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUNDS YEAR ENDED JUNE 30. 1994

EXHIBIT "K" Page 2

ASSETS/

ASSETS/

LIABILITIES

LIABILITIES

FUND

JULY 1, 1993 ADDITIONS

DELETIONS JUNE 30. 1994

Software Consortium

$

Special Needs Program Conference Fund

Special Services Conference Account

Special Student Services Account

Staff Conference Fund

State Board Awards

Summer Conference

Superintendents' Orientation

Support Staff Development Fund

Teacher Assessment and Agent Account

(Leadership Development Seminars)

Tech Prep Conference Account

Vocational Administrators' Account

Vocational Education Accounts

Business Education Fund

Future Business Leaders of America

Georgia Association of American

Industrial Arts Student Association,

Incorporated

Georgia Association of Future Farmers

of America

District I

Pig Chain Fund

Vocational Agriculture Teachers'

Fund

District II

Vocational Agriculture Teachers'

Fund

District III

Vocational Agriculture Teachers'

Fund

Dunn, J.E., Scholarship Fund

Northwest District (District IV)

Regular Agent Account

Georgia Association of Future Homemakers

of America

Georgia Association of Vocational

Industrial Clubs of America

Homemaking Teachers' Conference

Miscellaneous Vocational Agriculture Fund

Regional Meeting

Society of Georgia Vocational Agriculture

Teachers' Benefits Association, The

Vocational Industrial Clubs of America

Metro Atlanta Automobile Dealer

Association

Vocational Occupation Clubs of America

Worksite Wellness

11,289.76 4,851.53
364.50 38,253.24$
6,178.44 . 943.10
7,571.48 715.58
2,536.02 9,935.88 7,597.20
525.48 61,164.55

$
19,115.11
1,095.00 1,955.89
35,626.47 3,111.54 4,760.00 138,651.96

11,289.76 4,936.22$
32,261.54
814.11 1,083.00 5,833.79
609.00
87.37 34,942.83
6,620.05
4,196.01 135,876.03

38,064.66

71,723.12

64,225.68

5,406.69 7,122.14

15,154.14

17,244.33

9,007.42

3,895.95

4,361.51

4,788.81 4,055.69 3,077.08 63,394.54
54,364.60
22,188.97 12,328.96 4,997.71
168.88
40,798.19

59,078.17 122.98 796.01
257,415.22
76,216.31
81,230.00 21,064.85
7,532.00
12,130.54

57,135.50
2,496.22 260,750.40
77,156.45
63,743.09 24,809.99
2,940.21 5,063.20
8,619.64

430.13
83,619.81 1. 067. 00

51.73 115,038.48
137.07

481.86 123,424.32
1,187.06

-84.69 364.50 25,106.81 6,178.44 128.99
12.00 3,693.58
106.58
2,448.65 10,619.52 4,088.69
1,089.47 63,940.48
45,562.10
5,406.69
5,031.95
8,541.86
6,731.48 4,178.67 1,376.87 60,059.36
53,424.46
39,675.88 8,583.82 2,057.50 2,637.68
44,309.09
75,233.97 17.01

$1,258,676.90$ 1,590.821.18 $ 1.728.504.84 $ 1.120.993.24

See notes to the financial statements.

- 37 -

FUNDS AVAILABLE
REVENUES
State Appropriation Federal Revenues Other Revenues Retained

DEPARTMENT OF EDUCATION SCHEDULE OF APPROVED BUDGET "A" DEPARTMENT OF EDUCATION
YEAR ENDED JUNE 30. 1994

ORIGINAL

AMENDED

GOVERNOR'S

BUDGET

APPROPRIATION APPROPRIATION EMERGENCY FUND ADJUSTMENTS

SCHEDULE "1" Page 1
TOTAL

$3,153,523,530.00$ 85,434,351.00$ 460,621,324.00 -3,590,809.00
1,722,561.00

405,487.00$ -166,732.00 $3,239,196,636.00 236,635,419.00 693,665,934.00 22,449,304.00 24,171,865.00

$3,615,867,415.00$ 81,843,542.00$ 405,487.00 $258,917,991.00 $3,957,034,435.00
=============== ============ ============== ============== ================

EXPENDITURES
------------

Personal Services

$ 37,840,329.00$ -699,304.00

Regular Operating Expenses

4,126,626.00

86,594.00

Travel

1,087,967.00

31,200.00

Motor Vehicle Purchases

109,500.00 -42,360.00

Equipment

421,823.00

80,260.00

Canputer Charges

7,010,846.00

425,556.00

Real Estate Rentals

1,471,304.00

3,425.00

Telecamllnications

1,180,382.00

23,000.00

Per Diem, Fees and Contracts

15,781,097.00 -1,619,772.00 $

Capital Outlay

50,000.00

Utilities

742,880.00

QBE Fortll.lla Grants:

Kindergarten\Grades 1 - 3

753,531,667.00

Grades 4 - 8

715,965,525.00

Grades 9 - 12

294,622,175.00

High School Laboratories

124,613,856.00

Vocational Education Laboratories 100,756,134.00

Special Education

275,159,949.00

Gifted

38,022,413.00

Renedial Education

58,760,866.00

Staff Development and Professional

Development

28,891,019.00

Media

87,006,632.00

Indirect Cost

596,369,241.00

Pupil Transportation

129,798,307.00 -1,000,000.00

Local Fair Share

-615,762,984.00 1,563,000.00

Mid-Term Adjustment Reserve

0.00 78,705,327.00

Teacher Salary Schedule Adjustment 20,576,794.00

Other Categorical Grants:

Equalization Formula

142,801,545.00

231,929.00

Sparsity Grants

3,609,604.00

In School Suspension

21,059,624.00

Special Instructional Assistance

51,005,135.00

Middle School Incentive

51,755,114.00 4,922,095.00

Special Education Low - Incidence

Grants

416,000.00

Non-QBE Grants:

Education of Children of Low-

Income Famil i es

186,500,970.00

Retirement (H.B. 272 and H.B. 1321) 4,950,000.00

Instructional Services for the

Handicapped

39,176,572.00

Tuition for the Multi-Handicapped

2,960,451.00 -912,780.00

Severely Emotionally Disturbed

36,105,108.00

233,000.00

$ 352,187.00$ 1,515,529.00 163,482.00 50,760.00 30,370.00 11,190,017.00 2,182.00 75,256.00
41,000.00 1,560,467.00
139,042.00

37,493,212.00
5,728,749.00 1,282,649.00
117,900.00 532,453.00
18,626,419.00 1,476,911.00
1,278,638.00 15,762,792.00
50,000.00 881,922.00

6,389,647.00
5,419,655.00 2,800,355.00
375,014.00 1,818,624.00 3,670,911.00 2,004,149.00
483,957.00

759,921,314.00
721,385,180.00 297,422,530.00 124,988,870.00 102,574,758.00 278,830,860.00 40,026,562.00 59,244,823.00

364,487.00

101,855.00 715,135.00
3,385,456.00

2,195.00 -10,058,997.00 -20,576,794.00

28,992,874.00 87,721,767.00
600,119,184.00 128,798,307.00 -614,197,789.00 68,646,330.00
0.00

1,820,540.00
-158,467.00 46,456.00 145,654.00

144,854,014.00 3,609,604.00 20,901,157.00 51,051,591.00 56,822,863.00

416,000.00

6,030,518.00
15,884,212.00 2,628,065.00

192,531,488.00 4,950,000.00
55,060,784.00 2,047,671.00 38,966,173.00

See notes to the financial statements.

- 38 -

DEPARTMENT OF EDUCATION SCHEDULE OF APPROVED BUDGET "A" DEPARTMENT OF EDUCATION
YEAR ENDED JUNE 30. 1994

SCHEDULE "l" Page 2

ORIGINAL

AMENDED

GOVERNOR'S

BUDGET

APPROPRIATION APPROPRIATION EMERGENCY FUND ADJUSTMENTS

TOTAL

------------- ------------- -------------- -----------

EXPENDITURES
------------

Non-QBE Grants:

School Lunch (Federal)

$ 136,568,755.00

$177,BB7,B95.00 $ 314,456,650.00

School Lunch (State)

24,332,066.00

24,332,066.00

Supervision and Assessment of

Students and Beginning Teachers

and Perfonnance-Based

Certification

1,500,000.00

562,000.00

2,062,000.00

Regional Education Service Agencies 6,746,192.00$ 249,986.00

76,008.00

7,072,186.00

Georgia Learning Resources System

2,766,212.00

650,939.00

3,417,151.00

High School Program

18,041,235.00 -299,986.00

15,418,079.00 33,159,328.00

Special Education in State

Institutions

3,991,103.00

3,991,103.00

Governor's Scholarships

2,702,000.00

2,702,000.00

Job Training Partnership Act

3,084,680.00 -3,084,680.00

0.00

Vocational Research and Curriculum

248,270.00

50,000.00

298,270.00

Even Start

0.00

2,780,622.00 2,780,622.00

Salaries and Travel of Public

Librarians

10,645,182.00

553,441.00 11,198,623.00

Public Library Materials

5,007,912.00

2,694,057.00

7,701,969.00

Talking Book Centers

911,019.00

911,019.00

Public Library M& 0

4,025,581.00

13,809.00 4,039,390.00

Child Care Lunch Program (Federal) 22,934,480.00

8,562,475.00 31,496,955.00

Chapter II - Block Grant Flow

Through

10,783,825.00

10,783,825.00

Payment of Federal Funds to Board

of Technical and Adult Education 11,701,897.00

5,496,309.00 17,198,206.00

Education of Homeless Children/

Youth

0.00

631,607.00

631,607.00

Innovative Programs

2,450,000.00

2,450,000.00

Next Generation School Grants

1,000,000.00

2,000,000.00 3,000,000.00

Limited English-Speaking Students

Program

6,924,763.00

527,490.00

7,452,253.00

Drug-Free School (Federal)

11,841,909.00

371,272.00 12,213,181.00

Transition Program for Refugees

119,012.00

119,012.00

Emergency Inmigrant Education

Program

223,824.00

223,824.00

Title II Math/Science Grant

(Federal)

3,715,615.00

l,487,B49.00

5,203,464.00

Robert C. Byrd Scholarship

(Federal)

232,000.00

41,723.00

273,723.00

Health Insurance - Non-Cert.

Personnel and Retired Teachers

90,047,892.00

90,047,892.00

Pre-School Handicapped Program

13,782,520.00

329,780.00

14,112,300.00

Mentor Teachers

1,000,000.00

1,000,000.00

Nutrition Education

65,000.00

3,500.00

68,500.00

Advanced Placenent Exams

0.00 1,012,000.00

36,000.00

1,048,000.00

Family Connection Grants

0.00 1,325,000.00

663,102.00

1,988,102.00

Youth Apprenticeship Grants

0.00

280,272.00

280,272.00

Serve America

0.00

402,382.00

402,382.00

---------------- -------------- -------------- -------------- ----------------

$3,615,867,415.00$ 81,843,542.00$ 405,487.00 $258,917,991.00 $3,957,034,435.00
============= ========== ========== ============= ===============

See notes to the financial statenents.

- 39 -

DEPARTMENT OF EDUCATION SCHEDULE OF APPROVED BUDGET
"B" LOTTERY FOR EDUCATION YEAR ENDED JUNE 30, 1994

SCHEDULE "2"

FUNDS AVAILABLE REVENUES
State Appropriation

ORIGINAL

AMENDED

BUDGET

APPROPRIATION APPROPRIATION ADJUSTMENTS

TOTAL

$62,754,07B.OO $95,232,B20.00 $-9,864,199.00 $148,122,699.00
============= ============= ============= ==============

EXPENDITURES

Pre-Kindergarten for 4-year-olds Computer Hardware/Software in Classrooms Next Generation Schools Distant Learning - Hardware and Cabling Postsecondary Options Educational Technology Centers Safe Schools Grant Media Center and Library Equipment Model Technology Schools Learning Logic Sites Algebra Classrooms Drug and Anti-Violence Education

$37,100,000.00

$ -754,000.00 $ 36,346,000.00

10,310,000.00 $21,777,500.00 1,000,000.00 33,087,500.00

1,000,000.00

1,000,000.00

12,304,078.00 1,800,000.00

34,000.00 14,138,078.00

603,600.00 981,621.00

1,585,221.00

1,436,400.00 -200,000.00

1,236,400.00

0.00 20,000,000.00

20,000,000.00

0.00 38,307,500.00 -280,000.00 38,027,500.00

9,864,199.00 -9,864,199.00

0.00

0.00 924,000.00

924,000.00

0.00 753,000.00

753,000.00

0.00 1,025,000.00

1,025,000.00

------------- ------------- ------------- --------------

$62,754,078.00 $95,232,820.00 $-9,864,199.00 $148,122,699.00
============= ============= ============= ==============

See notes to the financial statements.

- 40 -

DEPARTMENT OF EDUCATION CASH AND CASH EQUIVALENTS
JUNE 30, 1994

SCHEDULE "3"

NONINTEREST BEARING ACCOUNTS
Bank South, N.A., Atlanta, Georgia First Floyd Bank, Cave Spring, Georgia First Union National Bank of Georgia, Atlanta, Georgia Middle Georgia Bank, Fort Valley, Georgia NationsBank of Georgia, N.A., Atlanta, Georgia NationsBank of Georgia, N.A., Valdosta, Georgia Southtrust Bank of Atlanta, N.A., Atlanta, Georgia Trust Company Bank, Atlanta, Georgia Trust Company Bank of Middle Georgia, Macon, Georgia United Bank and Trust, Rockmart, Georgia Wachovia Bank of Georgia, Atlanta, Georgia Wachovia Bank of Georgia, Macon, Georgia
INTEREST BEARING ACCOUNTS
Bank South, N.A., Atlanta, Georgia Central Bank, Swainsboro, Georgia First Floyd Bank, Cave Spring, Georgia First Commerce Bank, Lexington, Georgia First Union National Bank of Georgia, Atlanta, Georgia Georgia State Department of Education Credit Union, Atlanta, Georgia NationsBank of Georgia, N.A., Cedartown, Georgia NationsBank of Georgia, N.A., Douglasville, Georgia NationsBank of Georgia, N.A., Tifton, Georgia Trust Company Bank, Atlanta, Georgia Trust Company Bank of Middle Georgia, Macon, Georgia United Bank and Trust, Rockmart, Georgia Funds on Deposit with Office of Treasury and Fiscal Services
State Investment Pool
OTHER
Cash on Hand Petty Cash

$ -362,700.90 28,468.49
144,721.67 350.53
734,051.55 2,388.63
60,000.00 -2,595,093.32
200.00 2,057.50 388,522.89 2,508.05 $-1,594,524.91

$ 20,534.43 2,917.13 1,258.86 6,731.48 25,699.87
139,299.16 50,074.86 24,247.54 5,031.95 31,244.23 199,011.47 1,376.87
170,689.00
-------------

678,116.85

1,348.45 36.00

See notes to the financial statements.

- 41 -

$ -915,023.61
=============

DEPARTMENT OF EDUCATION INVESTMENTS
JUNE 30. 1994

SCHEDULE "4"

INVESTMENT TYPE
Certificates of Deposit Bank of Banks County, Homer, Georgia No. 51445039
Central Bank, Swainsboro, Georgia
No. 26410
First Community Bank of Tifton, Tifton, Georgia
No. 0150203362
First Union National Bank of Georgia, Atlanta, Georgia
No. 205-8208081 No. 205-8548189
NationsBank of Georgia, N.A., Atlanta, Georgia
No. 1340868-0002
NationsBank of Georgia, N.A., Douglasville, Georgia
No. 9100-0001 No. 9100-0002

PURCHASE DATE
January 27, 1994
December 1, 1993
March 3, 1994
December 16, 1993 December 20, 1993
Apri 1 29, 1993
October 30, 1993 October 30, 1993

MATURITY DATE
July 26, 1994
December 1, 1994
March 3, 1995
December 16, 1994 December 20, 1994
October 29, 1995
October 30, 1994 October 30, 1994

AMOUNT
$ 22,395.81 5,624.73 5,406.69
31,685.36 17,848.74 12,296.54 11,845.56 12,008.40

$ 119 , 111. 83
=============

See notes to the financial statements.

- 42 -

DEPARTMENT OF EDUCATION SCHEDULE OF GOVERNOR'S EMERGENCY FUND
YEAR ENDED JUNE 30, 1994

SCHEDULE "5"

Uncle Remus Regional Library - City of Eatonton for the Eatonton/Putnam County

Public Library

Burke County Board of Education - Help with Burke County Communities in Schools

Program

Union County Board of Education - Establish a Regional, Evening School for Union,

Fannin and Towns Counties

Long County Board of Education - Building Improvements - Additional Classrooms

Charlton County Board of Education - Physical Education Facilities

DeKalb County Board of Education - Physical Education Facilities - Columbia High

School

Paulding County Board of Education - Physical Education Facilities - W. C. Abney

Elementary School

Paulding County Board of Education - Physical Education Facilities - East Paulding

High School

Pulaski County Board of Education - Building Improvements - Middle Georgia CAA,

Incorporated

Governor's 1993 Conference on Education - Operating Expenses for Conference

Clayton County Board of Education - Complete Permanent Visual Arts Gallery in

Clayton County Schools Performing Arts Center

Hall County Board of Education - Provide Walkways and Canopies at Chestnut Mountain

Elementary School

Stewart County Board of Education - Renovate Old Lumpkin Elementary School

Bulloch County Board of Education - Provide Classroom Space at Marvin Pittman

Laboratory School, where the South Wing was Damaged by Fire on December 21, 1993

Randolph County Board of Education - Purchase Materials for the Randolph-Clay High

School Music Department

Haralson County Board of Education - Expenses in Connection with the West Georgia

Life Writing Program at West Haralson Middle School

Hall County Board of Education - Facility Improvements at Mount Vernon Elementary

School



Colquitt County Board of Education - Band Uniforms for the Colquitt County School's

50th Regiment Band

DeKalb County Public Library - Purchase Equipment and Materials for the Scott

Candler Library

Macon County Board of Education - Install a New Roof and Ceiling Tiles at Macon

County High School

Stephens County Board of Education - Replace Books and Materials Destroyed in a

Fire at Big A Elementary School

Georgia Teacher of the Year Program

Houston County Board of Education - Purchase a Video System for the Athletic/

Physical Education Department at Warner Robins High School

North Fulton Education 2000, Incorporated - Program Expenses in Connection with

Project Soar

Piedmont Regional Library - Assist with Expenses in Connection with the Relocation

of the Auburn Branch

Schools of Excellence

Banks County Board of Education - Assist with the Purchase of New Band Uniforms

Berrien County Board of Education - Assist with the Purchase of New Band Uniforms

for the High School

Dublin City Schools - Assist with the Completion of the Physical Education Facilities

at Dublin High School

1994 Georgia Teacher of the Year

Candler County Board of Education - To Replace Boiler used in Food Preparation at

the Canning Plant

$ 5,200.00 2,500.00
30,000.00 40,000.00 12,500.00
5,000.00 2,500.00 2,500.00 7,000.00 26,000.00 6,025.00 20,000.00 10,000.00 35,000.00 7,500.00 4,000.00 20,000.00 15,000.00 5,000.00 19,762.00 25,000.00 5,000.00 10,000.00 5,000.00 2,000.00 62,000.00 4,000.00 1,000.00 6,000.00 5,000.00 5,000.00
-------------
$ 405,487.00
=============

See notes to the financial statements.

- 43 -

DEPARTMENT OF EDUCATION SCHEDULE OF FEDERAL REVENUES
YEAR ENDED JUNE 30. 1994

PROGRAM

Agriculture, U. S. Department of

Food Distribution

Direct

School Breakfast Program

Direct

National School Lunch Program

Direct

Special Milk Program for Children

Direct

Child and Adult Care Food Program

Direct

State Administrative Expenses for Child Nutrition

Direct

Nutrition Education and Training Program

Direct

Temporary Emergency Food Assistance (Administrative Costs)

Direct

Commission on National and Community Service

Serve America Program

Direct

Education, U. S. Department of

Bilingual Education

Direct

Desegregation Assistance, Civil Rights Training, and Advisory

Services

Direct

Education of Handicapped Children in State Operated or Supported

Schools

Direct

Chapter 1 Programs - Local Educational Agencies

, Direct

Migrant Education - Basic State Formula Grant Programs

Direct

Educationally Deprived Children - State Administration

Direct

Chapter 1 Program for Neglected and Delinquent Children

Direct

Services for Children with Deaf-Blindness

Direct

Special Education - State Grants

Direct

Special Education - Special Education Personnel Development and

Parent Training

Direct

Public Library Services (LSCA - Title I)

Direct

Interlibrary Cooperation and Resource Sharing

Direct

Vocational Education - Basic Grants to States

Direct

Vocational Education - Consumer and Homemaking Education

Direct

Educational Research and Development

Direct

,

Federal, State, and Local Partnerships for Educational Improvement

Direct

Public Library Construction and Technology Enhancement

(LSCA - Title II)

Direct

Emergency Immigrant Education

Direct

Eisenhower Mathematics and Science Education - State Grants

Direct

Special Education - Preschool Grants

Direct

See notes to the financial statements.

- 44 -

CFDA NUMBER
10.550 10.553. 10.555 10.556 10.558 10.560 10.564 10.568
N/A
84.003
84.004
84.009 84.010 84. 011 84.012 84.013 84.025 84.027
84.029 84.034 84.035 84.048 84.049 84.117 84.151
84.154 84 .162 84 .164 84.173

SCHEDULE "6" Page 1

AMOUNT

$

11,141.26

37,661,867.54

149,427,948.46

21,960.00

24,890,955.31

2,025,688.35

96,215.27

871,848.25

341,916.90

-7.69

184,287.65

848,099.63 166,167,873.49
3,889,860.20 1,134,460.30
565,101.57 146,267.49 48,180,873.40

129,896.33 2,231,336.82
375,680.83 26,537,117.48
745,750.24 11,850.00
11,324,124.75

19,378.26 154,723.65 5,330,104.26 7,300,279.36

DEPARTMENT OF EDUCATION SCHEDULE OF FEDERAL REVENUES
YEAR ENDED JUNE 30. 1994
PROGRAM
Education, U. S. Department of Vocational Education - Community Based Organizations Direct Robert C. Byrd Honors Scholarships Direct Drug-Free Schools and Communities - State Grants Direct Christa McAuliffe Fellowships Direct Bilingual Education Support Services Direct Education for Homeless Children and Youth - Grants for State and Local Activities Direct Even Start - State Educational Agencies Direct Capital Expenses Direct State Program Improvement Grants Direct Tech-Prep Education Direct Foreign Languages Assistance Direct Supplementary State Grants for Facilities, Equipment, and Other Program Improvement Activities Direct White House Conference on Library and Administrative Services Direct
Envi ronm.enta 1 Protection Agency, U. S. Toxic Substances Compliance Monitoring Program Direct Enhancement Grants for State Asbestos Programs Direct
Health and Human Services, U. S. Department of Acquired Immunodeficiency Syndrome (AIDS) Activity Direct Head Start Direct Medical Assistance Program Direct Cooperative Agreements to Support School Health Education to Prevent the Spread of Acquired Immunodeficiency Syndrome Direct
Labor, U. S. Department of Job Training Partnership Act Contracts with State Agency Through Georgia Department of Labor
National Science Foundation Materials Development, Research, and Informal Science Education Direct

CFDA NUMBER
84.174 84 .185 84.186 84.190 84.194
84.196 84.213 84.216 84.218 84.243 84.249
84.253 N/A
66.701 66.706
93 .118 93.600 93. 778
93.938
17.250
47.067

SCHEDULE "6" Page 2
AMOUNT
$ 337,754.26 273,723.00
10,304,216.54 29,172.00 71,221.90
599,326.19 2,528,496.73
6,048.00 541,943.54 2,832,107.43 292,270.72 -45,410.98
-404.57 -1,476.00 13,794.11 -11,750.18 12,973.00 53,100.29 295,465.49
34,784.10
-7,068.64
--------------
$508,786,886.29
==============

See notes to the financial statements.

- 45 -

DEPARTMENT OF EDUCATION SCHEDULE OF OTHER OPERATING EXPENSES
YEAR ENDED JUNE 30. 1994
"A" DEPARTMENT OF EDUCATION
REGULAR OPERATING EXPENSES
Accreditation Fees Appraisals Bus Fare - Bank Deposits Clipping Services Collection Fees Court Reporter Services and Transcripts Examinations and Testing Freight, Express and Storage Linen Service and Outside Laundry Nutrition Survey Other Student Expenses Production of Films, Tapes and Recordings Seminars and Training Student Meals Student Medical Expenses Subscriptions, Dues and Registration Fees Test Scoring Services

COMPUTER CHARGES
Freight, Express and Storage Subscriptions, Dues and Registration Fees

"B" LOTTERY FOR EDUCATION
OTHER
Lottery for Education Pre-Kindergarten for 4-Year-olds Subscriptions, Dues and Registration Fees

See notes to the financial statements.

- 46 -

SCHEDULE "7"

$

189.51

5,000.00

195.20

771.25

1,696.15

287.00

2,360.80

345,843.71

7,593.50

2,100.00

17,465.29

43,324.42

166,628.70

3,554.88

3,366.61

434,871.62

282.15

$1,035,530.79

$ 45,449.00 75,271.48
$ 120,720.48

$ 1,238.26

Total per Annual Supplement Accruals June 30, 1994
Total per Audit Report

DEPARTMENT OF EDUCATION RECONCILIATION OF TRAVEL YEAR ENDED JUNE 30. 1994

SCHEDULE "8"
$ 987,844.82 5,498.93
$ 993,343.75
=============

See notes to the financial statements.

- 47 -

DEPARTMENT OF EDUCATION SUMMARY OF SALARIES, TRAVEL, AND PER DIEM AND FEES
YEAR ENDED JUNE 30. 1994

SCHEDULE "9"

BUDGET FUND
"A" DEPARTMENT OF EDUCATION Regular Computer Charges
B 11 11 LOTTERY FOR EDUCATION Pre-Kindergarten for 4-Year-olds

SALARIES

TRAVEL

PER DIEM AND FEES

$26,758,888.05$ 968,521.00$ 1,424,977.72 215,950.00

170,163.83

24,822.75

18,978.78

$26,929,051.88$ 993,343.75$ 1,659,906.50
============= ============= =============

See notes to the financial statements.

- 48 -

SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS

DEPARTMENT OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1994

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status of findings disclosed in the audit report for the year ended June 30, 1993, is summarized below:

Audit Control Number

Status ofFinding

414-93-01 414-93-02 414-93-03 414-93-04 414-93-05 414-93-06

See Audit Control Number 414-94-01 See Audit Control Number 414-94-02 See Audit Control Number 414-94-03 See Audit Control Number 414-94-04 Corrective Action Implemented Corrective Action Implemented

PRIOR YEAR/CURRENT YEAR

CASH AND CASH EQUIVALENTS - Financial Statements EXPENDITURES/LIABILITIES/DISBURSEMENTS - Financial Statements Agency Funds - Deficiencies in Accounting Procedures Audit Control Number 414-94-01

The audit report for the year ended June 30, 1993, noted several deficiencies concerning Agency Funds cash accounts. For the year under review, certain ofthese deficiencies were corrected. However, an examination of current year accounting procedures disclosed the following deficiencies in accounting procedures and internal controls which are in need of corrective action:

(1) Certain disbursements were not supported by adequate documentation. All disbursements should be supported by adequate documentation to demonstrate proper disbursement and accounting of funds.

(2) Certain disbursements did not appear to be in compliance with the intent ofthe fund. Steps should
be taken to ensure that records ofa fund include documentation stating specific disbursements which
are allowable for the fund. A listing of approved allowable disbursements would reduce the likelihood of questionable disbursements.

(3) Checks were issued to a certain individual for services rendered; however, there were no corresponding W-2's or 1099's issued. Procedures should be implemented to issue W-2's or 1099's to an individual performing services.

(4) Certain deposits for the Vocational Education Account, Georgia Association ofFuture Farmers of America, District III, Vocational Agriculture Teacher's Fund account were not made on a timely basis. Procedures should be implemented to ensure that all funds received are deposited promptly.

DEPARTMENT OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1994
PRIOR YEAR/CURRENT YEAR
CASH AND CASH EQUIVALENTS - Financial Statements EXPENDITURES/LIABil.,ITIES/DISBURSEMENTS - Financial Statements Agency Funds - Deficiencies in Accounting Procedures Audit Control Number 414-94-0 I
(5) Checks issued from the Professional Practices Commission account included one check made payable to, signed, and endorsed by the custodian of the account. In addition, the custodian reconciles the bank statement. Although documentation was available for the disbursement; compensating controls should be established to mitigate the lack of separation of duties in administering this account.
(6) Checks issued from the Vocational Education Account, Georgia Association ofFuture Farmers of America, Regular Agent Account included one check payable to cash. Although documentation was available for the disbursement; measures should be taken to prevent this practice.
(7) Certain funds are invested in certificates of deposit. Interest earned on these deposits at maturity become part ofthe principal when the certificates of deposits are renewed; however, the accounting records do not reflect these increases in principal. Audit adjustments have been made to the accounting records to reflect these increases in principal on the certificates of deposits. Procedures should be implemented to report certificates of deposit at the correct amounts on the accounting records.
GENERAL FIXED ASSETS/PROPERTY MANAGEMENT - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequacies in Operation ofProperty Management System Major/Nonmajor Programs Audit Control Number 414-94-02
The audit report for the year ended June 30, 1993, noted deficiencies in the controls over general fixed assets. For the year under review, our examination included a review of the internal accounting controls utilized by the Department ofEducation in maintaining their State Property System. This review consisted oftesting the system for compliance with Federal and State equipment laws and regulations. In addition, procedures were completed to verify the accuracy ofthe total equipment inventory valuation contained in the inventory records, which comprises the General Fixed Assets Account Group.
A sample of equipment items was selected to test the accuracy of the inventory system's control attributes. Ofthe 293 equipment items selected for physical inspection, the following deficiencies were noted:
(I) Two (2) items could not be located.
(2) Nine (9) items did not have decal numbers attached. Items were identified by serial numbers or descriptions.

DEPARTMENT OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1994
PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETS/PROPERTY MANAGEMENT - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequacies in Operation ofProperty Management System Major/Nonmajor Programs Audit Control Number 414-94-02
(3) Two (2) items were returned to vendors but were not removed from the inventory listing.
In addition, the following conditions relating to inappropriate accounting practices were found to exist:
(1) Equipment deletions were not properly updated on the inventory system.
(2) Three (3) capital lease equipment items were not properly recorded.
(3) The Department was unable to produce documentation ofcompliance with the requirement that a physical inventory be taken every two years.
The Department of Education should establish the necessary internal controls to ensure that equipment inventories are maintained in accordance with provisions of 0MB Circular A-102 and the State Property System Manual.
Federal Grantor Agencies Affected: U. S. Department of Agriculture U.S. Department ofEducation U. S. Environmental Protection Agency U.S. Department ofHealth and Human Services
MONITORING SUBRECIPIENTS Subrecipient Audit Reports Not Received Within Required Time Period Federal Financial Assistance Major/Nonmajor Programs Audit Control Number 414-94-03
The audit report for the year ended June 30, 1993, noted that a substantial number of subrecipient audit reports had not been submitted within the time period required by 0MB Circular A-128 and A-133. The Circulars state that subrecipients subject to the reporting requirements should submit audit reports no later than thirteen months after the end ofthe audited period.
As part of our examination for the year under review, we examined tracking documents used by the Department of Education to determine the status of subrecipient audit reports for the year ended June 30, 1993. Ofthe 379 subrecipients identified on the tracking documents, 141 had not submitted their audits within the thirteen month period as required by 0MB Circulars A-128 and A-133.

DEPARTMENT OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1994
PRIOR YEAR/CURRENT YEAR
MONITORING SUBRECIPIENTS Subrecipient Audit Reports Not Received Within Required Time Period Federal Financial Assistance Major/Nonmajor Programs Audit Control Number 414-94-03
A subsequent review of associated tracking documents indicated that 102 additional audit reports applicable to the period had been submitted by December 8, 1994. A review of the audit reports and the actions taken by the Department ofEducation to resolve the findings included in such reports indicated that the findings were properly resolved and audits were closed within the six month resolution period set forth in 0MB Circulars A-128 and A-133. It was noted during our examination that the Department ofEducation utilized a program review staff for interim compliance reviews of all subrecipients in accordance with the foregoing provisions ofOMB Circulars A-128 and A-133.
Federal Grantor AgenciesAffected: U. S; Department of Agriculture U.S. Department ofEducation U. S. Environmental Protection Agency U. S. Department ofHealth and Human Services U. S. Department ofLabor
MONITORING SUBRECIPIENTS Subrecipient Reviews Not Performed Within the Required Time Period Federal Financial Assistance Temporary Emergency Food Assistance (Food Commodities - CFDA 10.569) Nonmajor Program Audit Control Number 414-94-04
The audit report for the year ended June 30, 1993, noted that three subrecipient reviews had not been performed within the allotted time period as required by Federal regulation 7 CFR, Chapter 11, Section 251.10 (e) (2) which states, in part, as follows:
"(2) Unless specific exceptions are approved in writing by the FNS Regional Office, the State monitoring system shall include (i) an annual review of all emergency feeding organizations within the State;..."
As part ofour examination for the fiscal year ended June 30, 1994, we reviewed tracking documents used by the Department ofEducation to determine the status of subrecipient reviews for the Federal fiscal year ended September 30, 1993. Ofthe 29 subrecipients identified on the tracking documents, 4 had not been reviewed within the allotted time period. The Department should establish appropriate internal control structure policies and procedures to ensure that all subrecipients are reviewed in accordance with Federal regulations.

DEPARTMENT OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1994

CURRENT YEAR

BUDGET PREPARATION/EXECUTION Overexpenditure ofBudget Unit Object Class Financial Statements Audit Control Number 414-94-05

The total approved budget for the Department of Education - "A" Budget Unit provided for expenditures totaling $3,957,034,435.00. A comparison ofanticipated funds available and budgeted expenditures to actual funds available and expenditures by object class indicates that the following object classes were overspent by the amounts identified below:

Other Categorical Grants Middle School Incentive
Non-QBE Grants Advanced Placement Exams

$ 85,737.00 $ 8,649.00

These overexpenditures are in violation ofSection 78 ofthe Amended Appropriations Act of 1993-1994. The Department should review its internal control procedures over budget operations, design procedures which would prohibit the expenditure of funds in excess of budget approval, and implement those procedures to strengthen the internal controls over the budget function.

GENERAL LEDGER Lottery Grants to "A" Department ofEducation Budget Not Maintained by Program Financial Statements Amount: $18,047.72 Audit Control Number 414-94-06

For the year under review, our examination included a review of the lottery proceeds granted to the State operated schools which are maintained in "A" budget unit of the Department ofEducation. The review was conducted to ensure that accounting records were maintained for lottery funds on a grant by grant basis for each State operated school. In addition, tests were also performed to ensure that expenditures did not exceed amounts awarded for each grant. The following conditions were noted:

( 1) Lottery grants were not maintained on a grant by grant basis in the accounting records, but were maintained for each ofthe State operated schools as a whole. Instructions from the Department of Education issued March 30, 1994, requires each lottery grant to be accounted for separately.

(2) Lottery fund revenues of$18,047.72 were drawn down by the Department ofEducation for State operated schools in excess of grant availability.

DEPARTMENT OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1994
CURRENT YEAR
GENERAL LEDGER Lottery Grants to "A" Department ofEducation Budget Not Maintained by Program Financial Statements Amount: $18,047.72 Audit Control Number 414-94-06
The Department ofEducation should establish procedures to account for each lottery grant separately and to limit the amount of revenue and expenditures recognized to grant award amounts. The questioned cost of $18,047.72 should be returned to "B" budget unit of the Department ofEducation for refund to the Lottery for Education account maintained by the Office of Treasury and Fiscal Services.
COMPLIANCE WITH LAWS AND REGULATIONS Instructions to Boards ofEducation Not Consistent With the Official Code of Georgia Financial Statements Audit Control Number 414-94-07
Audits of various subrecipients disclosed that Georgia Department ofEducation issued written instructions to boards ofeducation regarding expenditure requirements relative to StaffDevelopment - Cost of Instruction (CIS) and Professional Development Stipend (PDS) funds that were not consistent with the Official Code of Georgia (OCGA). In a memorandum to system superintendents dated April 9, 1992 (for the 1993 fiscal year) the Georgia Department ofEducation stated:
"The General Assembly also approved the transfer ofPDS funds to the Cost ofInstruction budget above the 15 percent cap... "
In addition, in another memorandum date April 15, 1993 (for the 1994 fiscal year) the Georgia Department ofEducation stated:
"The Appropriations Bill addresses staffdevelopment as a single line item, thereby allowing commingling of cost of instruction and professional development stipend funds..."
The OCGA 20-2-182 states, in part, as follows:
"A local school system shall be authorized to expend up to 15 percent of its initial allotment of funds for providing professional development stipends for staff development programs as specified under this subsection..."
Furthermore, an appropriations act cannot restrict or alter the powers or duties conferred on an agency by general law (Attorney Generals Opinions, 75-88 and 79-46).

DEPARTMENT OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1994
CURRENT YEAR
COMPLIANCE WITH LAWS AND REGULATIONS Instructions to Boards ofEducation Not Consistent With the Official Code of Georgia Financial Statements Audit Control Number 414-94-07
The guidance provided in the above referenced memorandums has resulted in the various boards of education inappropriately expending PDS funds ofapproximately of $2,114,000.00 for fiscal year ended June 30, 1993. An inappropriate expenditure of a similar amount is anticipated for the fiscal year ended June 30, 1994.
The Georgia Department ofEducation should develop procedures whereby instructions given to subrecipients are consistent with laws and regulations. The Georgia Department ofEducation should request appropriate refunds from affected boards of education.
CASH MANAGEMENT Failure to Amend Agreement for Change in Funding Technique Federal Financial Assistance Major Programs Audit Control Number 414-94-08
As a part of our examination for the year under review, we examined the Department's funding techniques used in implementing the Cash Management Improvement Act of 1990. The Agreement effective for the period July 1, 1993 through June 30, 1994, applied the estimated clearance funding technique for the following Federal financial assistance programs:
National School Lunch Program (CFDA I0.555) Chapter 1 Programs - Local Educational Agencies (CFDA 84.010) Special Education - State Grants (CFDA 84.027)
During the year under review, the Department ceased using the estimated clearance method and began using the zero balance accounting funding technique which is acceptable under Federal regulation 31 CFR Part 205. However, the Department failed to obtain approval from the Financial Management Service for the change in funding technique during fiscal year 1994 prior to implementation. Federal regulation 31 CFR Part 205 .9(d) states, as follows:
"A treaswy-state agreement may be amended by the mutual written consent of the state and the Financial Management Service."
It should be noted that the Agreement for the subsequent fiscal year provided that the zero balance accounting funding technique was the agreed-upon technique for fiscal year 1995 but was not approved for use during fiscal year 1994. The Department should ensure any changes to the agreement made with the Financial Management Service are approved in writing for the applicable fiscal year before it is implemented.