Audit report, City of Bremen Board of Education, a component unit of the city of Bremen, Georgia, year ended June 30, 1994

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

AUDIT REPORT CITY OF BREMEN BOARD OF EDUCATION
A COMPONENT UNIT OF THE CITY OF BREMEN, GEORGIA YEAR ENDED JUNE 30, 1994

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY - TABLE OF CONTENTS -

SECTION!

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARYINFORMATIONSCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

EXHIBITS

FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

GOVERNMENTAL FUND TYPES

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - ACTUAL AND BUDGET

GOVERNMENTAL FUND TYPES

5

D NOTES TO THE FINANCIAL STATEMENTS

6

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

16

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

18

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

20

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

21

SCHEDULES

1 SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

22

2 ANALYSIS OF CASH AND CASH EQUIVALENTS

23

3 ACCOUNTS RECEIVABLE

24

SCHEDULE OF REVENUE

4

STATE FUNDS

25

5

LOCAL AND OTHER FUNDS

26

SCHEDULE OF EXPENDITURES BY OBJECT

6

GOVERNMENTAL FUND TYPES

27

7

LOTTERY PROGRAMS

28

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDITIONAL FINANCIAL INFORMATION

SCHEDULES

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

8

OVERALL

29

9

BY PROGRAM

30

10 SCHEDULE OF BOARD MEMBERS

32

SECTION II
COMPLIANCE
COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS
SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS

SECTION III
INTERNAL CONTROL
REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY - TABLE OF CONTENTS -
SECTION IV FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
SECTIONV PERTINENT VIEWS OF RESPONSIBLE OFFICIALS SCHEDULE OF PERTINENT VIEWS OF RESPONSIBLE OFFICIALS

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 24, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members of the City of Bremen Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
Ladies and Gentlemen:
We have audited the financial statements (Exhibits A through D) of the City of Bremen Board of Education, as of and for the year ended June 30, 1994, as listed in the table of contents. These financial statements are the responsibility of the Board'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, Government Auditing Standards, issued by the Comptroller General of the United States, and the provisions of the Office of Management and Budget Circular A-128, "Audits of State and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estiniates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in the notes to the financial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:
* The financial statements of the Board did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles.
94ARL-23

* School activity accounts maintained at the individual schools are not included in the financial statements. To conform to generally accepted accounting principles, these accounts should be included in the financial statements.
* The Board did not recognize as expenditures, in the year ended June 30, 1994, a portion of salaries
and the corresponding employer's cost ofrelated benefits earned for contractual services completed prior to June 30, 1994. Also funds received, subsequent to June 30, 1994, from the Georgia Department ofEducation for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1993, were improperly recorded in the year ended June 30, 1994. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the financial statements of the matters referred to in the preceding paragraph, the financial statements present fairly, in all material respects, the financial position of the City of Bremen Board ofEducation as of June 30, 1994, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the financial statements of the City of Bremen Board of Education taken as a whole. The combining statements (Exhibits E through H) and the financial schedules (Schedules 1 through IO which includes the Schedule ofFederal Financial Assistance) are presented for purposes of additional analysis and are not a required part of the financial statements of the City ofBremen Board ofEducation. Such information has been subjected to the auditing procedures applied in the audit ofthe financial statements and, in our opinion, except for the effects of the matters referred to in the third paragraph, such information is fairly presented in all material respects in relation to the financial statements taken as a whole.
A copy ofthis report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,
t:t~/~
Claude L. Vickers State Auditor
CLV:cm 94ARL-23

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY -1-

ASSETS
Cash and Cash Equi va1ents
Accounts Receivable
Inventories Food Donated Ccmnodi ti es Purchased Food

CITY OF BREMEN BOARD OF EDUCATION - !JaBALSDN COUNTY COMBINED BALANCE SHEET ALL FUND TYPES
JUNE 30 1994

EXHIBIT "A"

GOVERNMENTAL FUND TYPES

GENERAL FUND

SPECIAL REVENUE FUND

CAPITAL PROJECTS
FUND

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

150,IB9.0I $ 209,7B3.4B $

59,7B9.73

20,169.71

36,306.60 $ 396,279.09 $ 304,B62.B5 79,959.44 106,655.61

6,993.36 2,529.45

6,993.36 2,529.45

8,567.09 2,142.01

Total Assets

209,978.74 $ 239,476.00 $ 36,306.60 $ 485,761.34 $ 422,227.56

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Bus Replacerrent Funds For Continuation of Federal Programs For Expired Grant Balances/Questioned Costs For Inventories Food Donated Ccmnodi ti es Purchased Food For State Capital Outlay Projects
Unreserved Undesignated
Total Fund Equity

6,200.00 $

8,256.06 25,813.94
267 .67 42,422.72

6,200.00 $ 76,760.39

14,456.06 $ 25,813.94
267 .67 42,422.72

15,598.30 25,465.36 15,773.22

B2,960.39 $ 56,836.88

13,662.84 $
110.68

2,060.44 3,532.50

13,662.84 $ 2,060.44
3,643.18

4,512.84 13,393.52
3,643.18

6,993.36 2,529.45
$

36,306.60

6,993.36 2,529.45 36,306.60

8,567.09 2,142.01 2,969.10

13,773.52 $ 15,115.75 $ 36,306.60 $ 65,195.87 $ 35,227.74

190,005.22 147,599.86

0.00 337,605.08 330,162.94

203,778.74 $ 162,715.61 $ 36,306.60 $ 402,800.95 $ 365,390.6B

Total Liabilities and Fund Equity

209,978.74 $ 239,476.00 $ 36,306.60 $ 485,761.34 $ 422,227.56

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

C!TY OF BREMEN COMBINED STATEMENT OF REV

EXHIBIT "B"

GENERAL FUND

SPECIAL REVENUE
FUND

CAPITAL PROJECTS
FUND

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

REVENUES

State Funds Federal Funds Loca 1 and Other Funds

$ 3,538,638.00 $ 137,771.28 $ 46,429.26 413,827.25
1,010,614.53 221,113.26

0.00 $ 3,676,409.28 $ 3,486,300.00

460,256.51

544,942.14

1,231,727.79 1,180,287.25

Tota1 Revenues EXPENDITURES

$ 4,595,681.79 $ 772,711.79 $- - -0.-00 $ 5,368,393.58 $ 5,211,529.39

Current Instruction
Su~~~H ~:~:; ~:: lmproverrent of Instructional Services Educational Media Services
General Adninistration
School Adni ni strati on Business Aaninistration Maintenance and Operation of Plant Student Transportation Services
=~~t!u~rr~c;e()~~=~i ons
Food Services Operation
Other Operations of Non-Instructional Services
Capital Outlay

$ 3,189,989.61 $ 71,525.24 50,989.61 138,252.68 125,431.02 424,561.87
3~H~U~ 40,553.57 3,125.00 2,926.92 88,723.72

257,677.49 1,767.41 65,314.99 53,502.92
27 .62 14,327.86 391,404.30

$ 3,447,667.10 $ 3,447,559.40

1rn:mJ5 138,252.68 178,933.94 424,561.87

77,286.33 122,401.59 134,392.02 191,611.65 399,889.17

3~H~U~ 40,581.19 3,125.00
3!J~U~

3rg:nrn 51,668.32 3,172.50 5,589.21
309,768.31

2,500.00

88,723.72 2,500.00

121,401.04

Total Expenditures

$ 4,543,274.43 $ 784,022.59 $ 2,500.00 $ 5,329,797.02 $ 5,230,855.17

Excess of Revenues over (under) Expenditures

52,407.36 $ -11,310.80 $ -2,500.00 $ 38,596.56 $ -19,325.78

OTHER FINANCING SOURCES (USES)

Operating Transfers In Operating Transfers Out

24.09 $

511.58 $ 35,837 .SO$ 36,373.17 $ 5,037.75

-36,349.08 _ _ _-2_4_.0_9 _ _ _ _ -36,373.17

-5,037 .75

Total Other Financing Sources (Uses) $
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY I

-36,324.99 $- - -487-.49 $
16,082.37 $ -10,823.31 $ 187,696.37 174,725.21

35,837.50 $
33,337.50 $ 2,969.10

0.00 $- - - -0.-00
38,596.56 $ -19,325.78 365,390.68 385,577.92

Food Inventory Donated Canmdi ti es July I June 30 Purchased Food July 1 June 30
Residual Equity Transfer

-8,567 .09 6,993.36 -2,142 .OJ 2,529.45

-8,567 .09 6,993.36

-7 ,747 .88 8,567.09

-2,142. 01

-3,100.52

2,529.45

2!}~U~

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

FUND BALANCE JUNE 30

203,778.74 $ 162,715.61 $ 36,306.60 $ 402,800.95 $ 365,390.68

The notes to the financial statements are an integral part of this statement. - 3-

CITY OF BREMEN OMBINED STATEMENT OF REV
ACTUAL ANO YEAR

EXHIBIT "C"

ACTUAL PER
EXHIBIT "B"

ACTUAL PER
ADJUSTMENTS BUDGET BASIS

BUDGET

VARIANCE FAVORABLE (UNFAVORABLE)

REVENUES State Funds Federal Funds Loeal and Other Funds

$ 3mJ~Ui s 1,231,727.79

~~g;1~Ji m:68U8 s 0-00 3

s 3

s -S9,579.72 -10,744.68

1,231,727.79 I,186,909.00

44,818.79

Total Revenues EXPENDITURES

- - - - $ S,368,393.58 $

0.00 $ 5,368,393.58 $ 5,393,899.19 $ -25,505.61

Current
Su~~n ~;; Instruction ~;~:~
lq:irovement of Instruc~ional Services Educational Media Serv1ces General ACfllinistration School Administration Business ACl?linistration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Sup1>9rt Services Carmunity Service Operations Food Services Operation Other Operations of Non-Instructional Services Capital Outlay

$3,447,667.10 $
73,292.65 116,304.60 138,252.68 178,933.94 424,561.87
63,821.32 343,373.87
40,581.19 3,125.00
14,327.86 394,331.22
88,723.72 2,500.00

Total Expenditures

$ 5,329,797.02 $

Excess of Revenues over (under) Expenditures

38,596.S6 $

0.00 $ 3,447,667.10 $ 3,329,108.48 $ -118,558.62

73,292.65 116,304.60 138,252.68 178,933.94 424,561.87 63,821.32 343,373.87 40,581.19
3,125.00
14,327.86 394,331.22

88,628.73 91,275.02 132,926.37 194,562.89 415,492.03 64,380.39 348,443.80 38,114.46
3m:88 583.97 434,863.00

15,336.08 -25,029 .58
-5,326.31 15,628.95
- 9 ~~t81 S,069.93
-2,4~ui
150.00 -13,743.89
40,531.78

88,723.72 2,500.00

-88,723 .72
272,969.10 ----2-7-0-,-4-6-9-.-1-0

0.00 $ 5,329,797.02 $ 5,414,668.24 $-----8-4-,8--7-1-.2--2

0.00 $ 38,596.56 $ -20,769.05 $ 59,365.61

OTHER FINANCING SOURCES (USES)

Other Sources Other Uses

36,373.17 -36,373.17

36,373.17 $ 42,000.00 $ -5,626.83

-36,373.17

-42,000.00

5,626.83

Total Other Financing Sources (Uses)

0.00

0.00 $

0.00 $

0.00

Excess of Revenues and Other Financing Sources over {under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1, 1993

38,596.56 $

0.00 $ 38,596.56 $ -20,769.05 $

365,390.68

-10,709.10

354,681.58

360,433.38

59,365.61 -5,751.80

ADJUSTMENTS

Prior Year (Net) FOOD INVENTORY

26.84

-26.84

h. m4 Donated Cc:mnodi ti es ~~~~ 1
Purchased Food July 1, 1993 June 30, 1994

-8,567 .09 6,993.36
-2,142.01 2,529.45

8,567.09 -6,993.36
2,142.01 -2,529.45

0.00 0.00
0.00 0.00

0.00 0.00
0.00 0.00

FUND BALANCE JUNE 30, 1994

402,800.95 $ -9,522.81 $ 393,278.14 $ 339,691.17 $

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

53,586.97

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE FINANCIAL STATEMENTS JUNE30 1994

EXHIBIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City ofBremen Board ofEducation (Board) was established under the Jaws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent, appointed by the Board. With the exception of the departures from generally accepted accounting principles disclosed in the following paragraphs, the financial statements of the Board have been prepared in confonnity with generally accepted accounting principles as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting standards.
The more significant of the Board's accounting policies are described below.
REPORTING ENTITY
In evaluating how to define the government unit for financial reporting purposes, management has considered the criteria set forth in GASB Codification of Governmental Accounting and Financial Reporting Standards, Section 2100, "Defining the Financial Reporting Entity". The primary government consists of all the organizations that compose the legal entity of the City of Bremen Board of Education. Based upon the application ofthe above criteria, the City ofBremen Board ofEducation is detennined to be a component unit of the City of Bremen, Georgia for financial reporting purposes.
Board members were elected by the public and have decision making authority, the power to designate management, the ability to significantly influence operations, but do not have the authority to levy taxes or incur bonded indebtedness. The City Council detennines the amount oftax revenues flowing to the Board.
FUND ACCOUNTING
The Board uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities.
A fund is a separate accounting entity with a self-balancing set of accounts.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the financial statements.

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CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE FINANCIAL STATEMENTS JUNE30 1994

EXHIBIT"D"

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements account for all State, Federal, Local and Other Funds under control of the Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most ofa Board's general activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services traditionally provided by a board of education.
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are primarily received from the Georgia Department of Education and from the Federal government to accomplish specific objectives and are required to be accounted for separately. Also included are proceeds received from State, Federal, Local and Other sources for operations of the school food services fund. This fund could be accounted for as an enterprise fund; however, the Board chooses not to provide for depreciation, but to maintain the fund on a modified accrual basis and to report the fund as a special revenue fund under governmental fund types, which is acceptable under generally accepted accounting principles for governmental entities.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds.
Governmental funds are accounted for using the modified accrual basis of accounting under which:

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CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE FINANCIAL STATEMENTS JUNE30 1994

EXHIBIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Those revenues considered susceptible to accrual are property taxes, intergovernmental grants and investment income. Property taxes are considered available if they are collected and remitted by the collecting agent to the Board within 60 days after fiscal year-end.
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share ofthese contracts. During fiscal year 1994, a substantial number of personnel of the Board were employed for a one hundred and ninety day period beginning in late August 1993 and ending in early June 1994. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1993 and ending in August 1994. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the Board in the same twelve months. As ofJune 30, 1994, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 1994, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1994. Also, the State's portion of the compensation paid in July and August 1994 was received and recorded as revenue in the fiscal year subsequent to June 30, 1994. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1993, were recorded in the year ended June 30, 1994. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
BUDGET
The City of Bremen Board of Education has a legally authorized nonappropriated budget which is formally approved by the Board at the aggregate level. Budgets are prepared to provide a basis for funding operations and there is no legal prohibition regarding overexpenditure of the aggregate budget. The budget process begins when the Board's administration prepares a tentative aggregated budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation.
The Board prepares its budget on the modified accrual basis, which is the same basis on which it presents its financial statements. The budget comparison on Exhibit "C" presents actual and budget data for all governmental funds on a combined basis. To facilitate comparison with the budget, donated and purchased food inventories as reflected on Exhibit "B" have been eliminated from fund balance.
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CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE FINANCIAL STATEMENTS JUNE30 1994

EXHIBIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS

COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits (including certificates of deposit and N.O.W. accounts) in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.

RECEIVABLES

Receivables consist ofgrant reimbursements due from Federal, State or other grantors for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

PROPERTY TAXES

The City ofBremen fixed the property tax levy for the 1993 tax year (calendar year) on November 20, 1993 (levy date). Taxes were due on January 20, 1994. The lien date for property taxes was January 1, 1993. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1994 since their collection meets the criteria of GASB codification section P70.103. The City ofBremen Clerk bills and collects the property taxes for the Board of Education and remits the taxes collected to the Board.

The tax millage rate levied for the 1993 tax year (calendar year) for the City of Bremen Board ofEducation was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

Q..limills

INVENTORIES

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

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CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE FINANCIAL STATEMENTS JUNE30 1994

EXHIBIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INTERFUND TRANSACTIONS
The Board has the following types of interfund transactions:
Reimbursements of expenditures initially made from a fund that are properly applicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
Operating transfers are recorded for all interfund transactions other than reimbursements.
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results of operations in confonnity 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. Certain reclassifications have been made to the comparative data to conform to the current year classifications.
Note 2: DEPOSITS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee ofinsurance, or by collateral in an amount ofnot less than 110 percent of the public funds being secured after the deduction ofthe amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of any one of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or ofthe State of Georgia,
(4) Bonds, bills, notes, certificates ofindebtedness or other obligations of the counties or municipalities of the State of Georgia,

- 10 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE FINANCIAL STATEMENTS JUNE30 1994

EXHIBIT"D"

Note 2: DEPOSITS

(5) Bonds of any public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,

(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and

(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

CATEGORIZATION OF DEPOSITS At June 30, 1994, the bank balances were $615,901.84. The amounts of the total bank balances are classified into three categories of credit risk:

Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the Board or by the Board's agent in the Board's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Board's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Board's name.)

The Board's deposits are classified by risk category at June 30, 1994, as follows:
Risk Category 1 2 3 Total
Note 3: NON-MONETARY TRANSACTIONS

Bank Balance
$ 102,522.25 500,000.00 13 379.59
$ 615 901 84

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

- 11 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE FINANCIAL STATEMENTS JUNE30 1994

EXHIBIT"D"

Note 4: RISK MANAGEMENT

The Board has established a limited risk management program for Unemployment Compensation. Estimated claims are budgeted by management based on known claims and prior experience. During fiscal year 1994, no claims were paid.

Note 5: SIGNIFICANT COMMITMENTS

At June 30, 1994, the Board had encumbrances in the amount of$52,022.72 for the unperformed portion of purchase orders, contracts and other commitments for goods and services associated with the Lottery Programs. The Georgia Department of Education has funding available to the Board in an amount equal to these encumbrances. The revenues and expenditures associated with these encumbrances will be recognized in the subsequent fiscal year. Encumbrances outstanding do not constitute expenditures or liabilities in the current year because these commitments will be honored during the subsequent year. These encumbrances are identified by Lottery Program as follows:

Algebra Classrooms Computers in Classrooms Distant Learning
Media Center and Library Equipment Safe Schools

$ 2,316.00 34,417.40 3,000.00 5,005.32 7 284.00
$ 52 022 72

Note 6: CONTINGENT LIABILITIES

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

Note 7: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (TRS}, which is a cost-sharing multiple employer public employee retirement system (PERS).

TRS provides service retirement, disability retirement and survivors benefits for its members. A member is eligible for service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service and attainment of age 55, at a reduced benefit. Retirement benefits paid to members are equal to 2% of the average of the member's two consecutive highest paid years of service multiplied by the number of years of

- 12 -

CITY OF BREMEN BOARD OF EDUCATION. HARALSON COUNTY NOTES TO THE FINANCIAL STATEMENTS JUNE30 1994

EXHIBIT"D"

Note 7: RETIREMENT PLANS
creditable service up to 40 years. The normal retirement pension is payable monthly for life. Options are available for distribution ofthe member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
Retirement benefits also include death and disability benefits. A disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The death benefit is the amount that would be payable to the member's beneficiary had the member retired on the date of death on either a service retirement allowance or a disability retirement allowance, whichever is larger. The benefit is based on the member's creditable service (minimum of 10 years of service) and compensation up to the time of disability or death.
Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting of employer contributions occurs, but the member's contributions are refunded with interest.
The Board's payroll for employees covered by TRS for the year ended June 30, 1994, was $3,243,072.44; total payroll was $3,530,190.89.
TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Board who are covered by TRS are required to contribute 6% of their gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees as advised by their independent actuary. For fiscal year 1994 that rate for employer contributions was 11.81%. The interest rate assumption (rate ofretum on investments) was 7.50%.
Total contributions made during fiscal year 1994 amounted to $577,589.99, of which $383,004.66 was made by the Board and $194,585.33 was made by employees. These contributions represented 11.81% (Board) and 6% (employees) of covered payroll.
TRS FUNDING STATUS AND PROGRESS The amount of the total pension benefit obligation is based on a standardized measurement established by Statement No. 5 ofthe Governmental Accounting Standards Board (GASB) that, with some exceptions, must be used by a PERS. The standardized measurement is the actuarial present value of credited projected benefits. This valuation method reflects the present value of estimated pension benefits that will be paid in future years as a result of employee services performed to date, and is adjusted for the effects of projected salary increases. A standardized measure ofthe pension benefit obligation was adopted by the GASB to enable readers of PERS financial statements to assess that PERS funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among other PERS and among other employers.
Total unfunded pension benefit obligation ofTRS as of June 30, 1993, was as follows:

- 13 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NdTES TO THE FINANCIAL STATEMENTS JUNE30 1994

EXHIBIT"D"

Note 7: RETIREMENT PLANS

Total pension benefit obligation

$13,912,014,000.00

Net assets available for benefits, at cost

12 821 722 000.00

Unfunded pension benefit obligation

$ 1 090 292 000 00

The measurement ofthe total pension benefit obligation is based on an actuarial valuation as of June 30, 1993. Net assets available to pay pension benefits were valued as of the same date. TRS does not make separate measurements of assets and pension benefit obligation for individual employers.

Total contributions from all employers to TRS for fiscal year ended June 30, 1994 were $521,550,000.00. The Board's contribution for the year ended June 30, 1994 of $383,004.66 was actuarially determined and represented .0734% of total contributions made by all participating employers.

Ten year historical trend information is presented in the 1994 TRS Component Unit Financial Report. This information is useful in assessing TRS's accumulation of sufficient assets to pay pension benefits as they become due.

PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA (PSERS)

PSERS PLAN DESCRIPTION Substantially all bus drivers, maintenance, custodial, and lunchroom personnel employed by local school systems are covered by the Public School Employees Retirement System of Georgia (PSERS). All employer's contributions are made by the State of Georgia.

PSERS provides service retirement, disability retirement and survivors benefits for its members. A member is eligible for normal service retirement after 10 years ofservice and attainment ofage 65. A member applying for service retirement with IO years of service and retires between the ages of 60 and 65 receives a reduced benefit. Monthly retirement benefits paid to members are equal to $8.00 per month multiplied by the number of years of creditable service. Options are available for distribution of the member's monthly pension at a reduced rate to a designated beneficiary on the member's death.

Retirement provisions include death and disability benefits. Disability benefits are the same as if the employee had retired at age 65 as long as the employee has 15 or more years of creditable service. Death benefits are dependent upon the number ofyears of service. Ifthere are less than ten years of service, a lump sum refund of the employee's contributions and interest are made to the beneficiary. Ifthere are more than ten years of service, the beneficiary shall receive for life half of what the employee would have received upon retirement.

Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting of employer contributions occurs, but the member's contributions are refunded with interest.

There were 25 employees covered under PSERS for the year ended June 30, 1994.

- 14 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE FINANCIAL STATEMENTS JUNE30 1994

EXHIBIT"D"

Note 7: RETIREMENT PLANS
PSERS CONTRIBUTIONS REQUIRED AND MADE Covered employees are required by State statute to contribute $4.00 a month for the nine month school year. Unlike TRS, the Board makes no contribution to PSERS. The State of Georgia is required by statute to make employer contributions actuarially determined and approved and certified by the PSERS' Board of Trustees. Total contributions from employees of the Board made during fiscal year 1994 amounted to $832.00. Total contribution for all school systems made by the State of Georgia to PSERS for fiscal year ended June 30, 1994, was $9,150,000.00.
Note 8: SURETY BONDS
The School Superintendent, Mr. Dennis McBrayer, is bonded in the amount of$10,000.00 with Selective Insurance Company ofAmerica, Branchville, New Jersey, their Bond No. B-79615, on which premium is paid through May 15, 1995.

- 15 -

ASSETS
cash ard cash Eqlivalents
kautts Ra:eivable
Inventories Food lmated C'.amcdities Purch3sed Food

soro.
FIXX)
SERVICES FOO

ELElNTARY Nil SEClJllll'<RY EIU:ATIOO tcr

LOTTERY PR03l/lMS

OW'TIR 1 CIW'lER 2
EIU:ATIOO CF STAlE OCPRIVED Pl!OOlAH BLOCK GWIT - INNOVATIVE CHILmEN Iff'ROVElHT FLa.l T1iID..Gi Pl!OOlAHS

TITLE II -
EISENHliR Wlrtffl\TICS Rll SCIEICE EIU:ATIOO

$143,057.49 $ 42,422.72 $ 10,278.43 $ 2,031.54 $ 7,455.88

0.00 $

0.00 $ 713.22

6,993.36 2,529.45

Tota1 Assets

$152,580.30 $ 42,422.72 $ 17,734.31 $ 2,031.54 $

0.00 $

0.00 $

======

713.22

LIABILITIES ANO A.NO EQJITY

LIABILITIES

cash Overdraft kautts Payable
5alaMes Payable E,cpired Grant Balances Payable Deferred ReYerue

$ 42,422.72

4,276.70 12,630.94

Total Liabilities

$ 42,422.72 $ 16,907.64

FOO EQJITY

Fllld Balances Reserved For Cootinuatioo of Federal Programs
For E,cpired Grant Balanc:es/~ioned
Costs
For lnveitories Food lmated Cmmx!ities Purch3sed Food

$ 6,993.36 2,529.45

826.67 $ 2,031.54

U,reserve:l lrdesi!1l"ted
Total Fllld Equity

$ 9,522.81 143,057.49 $ $152,580.30 $

0.00 0.00 $

826.67 $ 2,031.54

0.00

0.00 $

826.67 $ 2,031.54 $

0.00 $ 0.00 $

713.22

713.22

0.00

0.00

0.00 $ 713.22

Total Liabilities ard Fllld Equity $152,580.30 $ 42,422.72 $ 17,734.31 $ 2,031.54 $

0.00 $

====

See notes to the firancial stataiEnts.

- 16 -

0.00 $ 713.22

EXHIBIT ''E''

INDIVIIXW.S WITH

- - DISABILITIES Ell.CATIOO /JCT

TITLE VI, B

co+umv

FLCll

PRESOIXX. INOOVATIVE Ell.CATIOO SERVE

1lfl.GH

Fl.ND A'ERICA

-EAALY

SOIXX.Plr. OiILIHXXl

TOT/11.S

OiILOCME OiILOCME

PROCAA-1

.J..t 30, 1994 .J..t 30, 1993

6,097.55$ 3,885.73 $ 634.52 $ 0.00

4,542.37

213,663.57 $ 180,709.00

1,686.52

5,800.00

$4,697.00

530.31

20,169.71

37,677.00

6,993.36 2,529.45

8,567.09 2,142.01

7,784.07$ 9,685.73$ 634.52 $ 0.00 $4,697.00 $ 4,542.37 $ 530.31 $ 243,356.09 $ 229,095.10

1,771.74 $ 5,972.56

2,207.62 7,210.44
267.67

7,744.30$ 9,685.73
--- ----

$3,349.78 $3,349.78

$ 530.31 $

3,880.09 8,256.06 $ 25,813.94
267.67 42,422.72

13,131.31 25,465.36 15,m.22

$ 530.31 $ 80,640.48 $ 54,369.89

39.77
39.77 0.00 $ 39.77 $

634.52

$1,347.22

2,060.44 $ 3,532.50

13,109.91 3,532.50

6,993.36 2,529.45

8,567.09 2,142.01

634.52

$1,347.22

15,115.75 $ 27,351.51

0.00

0.00 $ 0.00 0.00 $ 4,542.37 $ 0.00 147,599.86 147,373.70

0.00 $ 634.52 $ 0.00 $1,347.22 $ 4,542.37 $ 0.00 $ 162,715.61 $ 174,725.21

7,784.07 $ 9,685.73 $ 634.52 $ 0.00 $4,697.00 $ 4,542.37 $ 530.31 $ 243,356.09 $ 229,095.10

- 17 -

som
FCXXl SERVICES
R.NJ

LOTTERY PROOlAHS

ELElNTAAY AND SECOO!lORY EIX.cATIOO IC

OW'lcRI

TITLE II -

DiAl'ltR 2

EISENIDER

EIX.cATIOO CF DEPRIVED

STATE PR!ElAM

-------B1.0:X ffiANT - INOOI/ATIVE

AWNiDTIEsJc,I\mTICaS

CHILIREN Il1'ROIDENT FLCll TI-ROO,H PROOlAHS EIX.cATIOO

REVENLES

State Funds Faleral Funds Local ard Otrer Funds
Total Revenues EXPOOITLRES

$ 1~:~:~ $I03,I03. 28 $ 87,053.88$

0.00 $

-20-0,-23-5.7-6 -------- ----- - - - -

- - - - ----- $-38-7,7-36.-46 $103,103.28 $ 87,053.88 $- - -0.-00 $

4 800 00 6,791.00 $ ' ' $ 7,CXXJ.00 6,791.00 $ 4,800.00 $ 7,CXXl.00

Current
Instn.ctiai ~rt Services
~il Services IDJ)"""""'1: of Instnci:iaial SeNices General Adninistratioo M>intenance ard ~ratioo of Plant Stt.rlm Trans~rtatia, Services Camu,ity Service Operatia,s Fcxxl Services ~atia, Otter (\::erations of Nal-Instnci:iaial Services

$103,122.76 $ 55,930.61 $ 132.66
30,990.61
$ 391,404.30

0.00 $

6,641.61 $ 5,282.42 $ 3,815.36

149.39

12,557.82

3,017.75 15.44

Total Expenditures E>x:ess of Releu!s OYer (Ln:ler) Expenditures OlrfR FINAICIIE SCl.RCES (l.5ES)

- - - - - - - - - - - - - $ 391,404.30 $-1-03-,-1-2-2-.7-6$-8-7,0-53.-88 $

0.00 $ 6,791.00 $ 17,840.24 $ 6,848.55

- - - - - - - - - - - $ -3,667.84 $- --1-9.4-8 $- -0-.00 $----0.0-0 $- - -0-.00 $ -13,040.24 $ 151.45

~ratirg Transfers In ~ratirg Transfers M

19.48

492.10

Total otter Finarcirg Sources (Uses)

19.48

492.10

E>x:ess of Re1eu!s ard Otter Finarcirg Sources
~ (Ln:ler) Expenditures aro otter Finarcirg $ _ , _ $
3 667 84

A.NJ IW.AlE .UY I

157,434.43

0.00 $ 0.00

o.oo $ 0.00 $
826.67 2,031.54

0.00 $ -12,548.14 $ 0.00 12,548.14

151.45 561.77

F~~ities
July I Jur-, 30 Purchased Fcxxl
~k
Resici.Jal ~ity Transfer

-8,567.00 6,993.36 -2,142.01 2,529.45

R.NJ IW.AlE Jl.t 30

See notes to tre finarcial statarents.

- 18 -

EXHIBIT "f"

INDIVIW'l.S WITH DISABILITIES Ell.CATIC:W PCT
TITLE VI, 8

fl()/ TlR(ll';i

!'RESOW. INOOVATIVE

PROCR/>14

PROCll.<lNS

mff..tl!TY Ell.CATIC:W
fl.HD

SERVE AlRICA

TOTALS

EAALY

SOW. PEE. CHILIJHXXJ

YEAA ENIED

CHILOCAAE CHILOCAAE

PROCR/>14 PROCR/>14 JLtlE 30, 199 JLtlE 30, 199

s s s 49 840 52 61 489 33

m:~ui s s $ 32,239.00 $ 6,973.90 3,806.92

s 4~~:m:~

- - - - ------ --lO-,OO-O-.O-O $-1-,13-0.-00 ---99-9-.0-0 -9,-748-.50 - - -2-21,1-13.-26 -2-50-,06-5.8-7

- - - - - $- 4-9,8-40.-52 $ - 61,489.33$ -10-,0-00-.0-0 $-1,-130-.00$-33,-238-.oo $-16-,7-22-.40$-3,8-06.-92 $-m-,1-11-.1-9 $-m-,-28-8-.2-1

33,686.65 $ 1,634.75 6,889.04 7,630.00

46,626.76 $ 4,293.00 10,569.57

2,144.19 7,855.81

309.10 $ 118.03

1,689.88

27,406.23 4,147.83
27.62

2,540.78 $ 754.56 9,585.62 3,052.36

257,677.49 $ 226,209.88

1,767.41 65,314.99 53,502.92
27.62 14,327.86 391,404.30

4,451.00 66,988.44 68,018.75 2,341.31 4,757.21 307,145.75

40,128.06

- - - - - - - - - - - - - $-4-9,8-40.-52 $ 61,489.33 $ 10,000.00 $-1,-689-.88 $-31,-890-.78 $-1-2,-24-4-.4-3 $-3-,8-06-.9-2 $-7-84,0-22.-59 $ 720,040.40 - - - - - -0.-00 $- - -0.-00 $- -0-.00 $---559-.88 $ 1,347.22$-4,-477-.97$- -0.-00 $--1-1,3-10.-80 $- 5-7,2-47.-87

-24.09 -24.09

511.58 $ 5,037.75 -24.09 487.49 $ 5,037.75

0.00 $ 39.77

0.00 $ 0.00

0.00 $ -583.97 $ 1,347.22 $ 4,477.97 $

634.52 583.97

0.00

64.40

0.00 $ -10,823.31 $ 62,285.62 0.00 174,725.21 113,301.05

-8,567 .09 6,993.36
-2,142.01 2,529.45

-7,747 .88 8,567.09 -3,100.52 2~}~:~~

39.77 $

0.00 $ 634.52 $ 0.00 $ 1,347.22 $ 4,542.37 $ 0.00 $ 162,715.61 $ 174,725.21

=========

- 19 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30 1994

EXHIBIT "6"

ASSETS Cash and Cash Equi va 1ents
FUND EQUITY Fund Balances
Reserved For State Capital 0ut1 ay Projects
Unreserved Undesi gnated
Tota 1 Fund Equity

GEORGIA STATE FINANCING AND INVESTMENT COMMISSION

PROJECTS 91-763-070 92-763-047

TOTALS PROJECT 95/945-763-086 JUNE 30, 1994 JUNE 30, 1993

0. 00 $

36,306.60 $ 36,306.60

2,969.10

0.00 $

36,306.60 $ 36,306.60 $

2,969.10

0. 00 $

36,306.60 $ 36,306.60 $

2,969.10

0. 00

0. 00

0. 00

0.00

0.00 $

36,306.60 $ 36,306.60 $

2,969.10

See notes to the f i nanci a1 statements.

- 20 -

CITY OF BREMEN BOARO OF EOUCATION - HARALSON COUNTY COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30 1994

EXHIBIT "H"

GEORGIA STATE FINANCING AND INVESTMENT COMMISSION

TOTALS

PROJECTS 91-763-070 92-763-047

PROJECT 95/94S-763-086

YEAR ENDEO ------------------- --------JUNE 30, 1994 JUNE 30, 1993

REVENUES

None Recorded EXPENDITURES

0. 00 $

0. 00 $

D. 00 $

0. DO

Capital Outlay Land and Land Improvements

2,500.00 $

0. 00 $

2,500.00 $

0. 00

Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES

-2,500.00 $

0. 00 $

-2,500.00 $

0.00

Operating Transfers In

35,837.50

35,837.50

0.00

Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY I

-2,500.00 $ 2,969.10

35,837.50$

33,337.50$ 2,969.10

0. 00 2,969.10

Residual Equity Transfer

-469.10

469. JO

0. 00

FUND BALANCE JUNE 30

0. 00 $

36,306.60 $

36,306.60 $

2,969.10

See notes to the financial statements.

- 21 -

CITY OF BREMEN BOARD OF SCHEDULE DF FEDERAL YEAR ENDED

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

Al/ARDS IN PERIOD

FEDERAL FUNDS RECEIVED IN PERIOD (NET OF RgFUNDS)

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Agriculture, U. S. Department of
Through Georgia Department of Education
Food and Nutrition Program Food Services School Breakfast Program 1994 Grant National School lunch Program 1994 Grant Food Distribution Program (1)

10.553 $ 10.555 10.550

16,855.99 $ 102,583.60 29 193.11

16,855.99 $
1 10~ r3. 60

16,855.99 102,583.60 $ 29 193.11

(2) 362,211.19(3) 29 193.11

Total U. S. Department of Agriculture

148 632.70 $ 119 439.59 $ 148 632.70 $ 391 404.30

Education, U. S. Department of Through Georgia Department of Education Elementary and Secondary Education Act Chapter 1 Education of Deprived Children
ml1993 Regular ~~~,;~ver
C~f~~k ~rant - Fl ow Through
1994 Regular Innovative Programs
1993 Regular Title II
Eisenhower Mathematics and Science Education 1993 Regular 4
Individu!1~ w~;~u6f~abilities Education Act Title VI, B Flow Through
mi1993 Regular ~~~,;~ver
Preschoo1 Program
ml1993 Regular ~~~,;~er
Innovative Programs 1994 Regular
Vocational Education - Basic Grants to States
Hi~~~i~ :~~, anizations
Vocational Educlional Support Program 1993 Contract 1994 Contract
Tech-Prep Education 1993 Grant 1994 Grant
Serve America Program 1993 Grant 1994 Grant

84.010 84.010 $ 84.010 84.151 84.151
84.164 84.164
84.027 84.027 84.027 84.173 84.173 84.173 84.027
84.174 84.174 84.243 84.243 OFA OFA

$ 1,268.00 100,706.00 6,791.00
7,000.00
4,665.00 54,768.00 20,765.00 45,549.00 10,000.00
17,000.00 29,429.26 25 640.00

20,005.31 1,268.00 $
78,330.00 6,791.00 5,184.00
7,000.00
8,028.00 4,665.00 43,489.00 -14,504.53 20,765.00 35,192.00 10,000.00
3,000.00 14,500.00 11,202.71 26,970.78 13,736.00 16 173.00

1,268.00 $ 85,785.88 6,791.00
7,000.00
4,665.00 45,175.52 20,765.00 40,724.33 10,000.00
17,000.00 29,429.26 ~Am:88

1,268.00 85,785.88
6,791.00 12,548.14
561. 77 6,286.78
4,665.00 45,175.52 20,765.00 40,724.33 10,000.00
15,172.90 (3)
~Amjg,4>

Total U. S. Department of Education

323 581.26 $ 311 795.27 $ 300 842.99 $ 281 635.10

Health and Human Services, U. S. Oepartrrent of Through Georgia Childcare Council School Age Childcare Program 1993 Grant 1994 Grant Eari~/2~!~fod Childcare Program

93 .575 93.575 $ 93.575

$ 5,000.00 5 ODO.OD

2,961.00 $ 4,612.90 3 276.61

2,361.00 $ 4,612.90 3 806.92

2,42s.40f4l 9,819.03 4 3 806. 92

Tota1 U. S. Depar-nt of Hea1th and HLman Services

10 000.00 $ 10 850.51 $ 10 780.82 $ 16 051.35

Total Federal Financial Assistance

482 213.96 $ 442 085.37 $ 460 256 .51 $ 689 090.75

The Soard had no major programs as defined by the Single Audit Act of 1984.

(1) The amount shown for the Food Distribution Pro9ram represents the Federally assigned value of nonmonetary

!~ ~~~ 0
(2) ~!~~af~~~e: fo~o~:e~c~:rg~:!:Ja;fi~~~a!"

~g~s~,~t~fn!rs::;~e~~r!~~

f~~f~~dfi~c~~ Yf~~4

(3j Nati ona1 Schoo1 Lunch Program. Expenditures on this program/project were not maintained on a program/project basis.

(4 Expenditures for this program include State, and/or Local and Other Funds.

See notes to the financial statements.

- 22 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY ANALYSIS OF CASH ANO CASH EQUIVALENTS JUNE 30 1994

INTEREST BEARING ACCOUNTS

Citizens Bank and Trust, Bremen, Georgi a
Certificate of Deposit No. 21684

(3.65%)

First National Bank of Haralson County, Bremen, Georgi a
N.0.W. Checking Accounts (2.78%)

OTHER Petty Cash

SCHEDULE "2"
2,500.00 393,479.09 395,979.09
300. 00 396,279.09

See notes to the financial statements.

- 23 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY ACCOUNTS RECEIVABLE JUNE 30 1994

SCHEDULE "3"

Bremen, City of City Wide School Tax
Education, Georgi a Department of Vocational Education Federal Funds Community Based Organizations Tech-Prep Education Federal Programs ESEA - Chapter 1 Education of Oepri ved Children Individuals with Disabilities Education Act Title VI, B Fl ow Through Preschool Program Serve America Program
Georgia Childcare Council Early Childhood Childcare Program
WordPerfect Corporation Vendor Overpayment

GOVERNMENTAL FUND TYPES

GENERAL FUND

SPECIAL REVENUE
FUND

54,788.33

TOTAL 54,788.33

2,500.00 2,45B.48

2,500.00 2,458.48

7,455.88

7,455.88

1,686.52 5,800.00 4,697.00

1,686.52 5,800.00 4,697.00

530.31

530.31

---------4-2-.-9-2

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

42.92
-------------

59,789.73

20,169.71 $

79,959.44

See notes to the financial statements.

- 24 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 1994

SCHEDULE "4"

AGENCY /FUNDING
GRANTS Education, Georgi a Department of Quality Basic Education General and Career Education Programs Special Education Programs Remedial Education Program Medi a Center Programs Staff Development Programs lndi rect Cost Pupi 1 Transportation Regular Bus Replacement Special Instructional Assistance In-School Suspension Mid-term Adjustment Local Fair Share Educational Equalization Funding Grant Food Services Other State Programs Innovative Programs Mentor Teacher Program Preschool Handicapped Program Supervision and Assessment of Student and Beginning Teachers and Performance-Based Certi fi cation Lottery Programs Computers in Cl ass rooms Media Center and Library Equipment Pre-Kindergarten Program

GOVERNMENTAL FUND TYPES

GENERAL FUND

SPECIAL REVENUE
FUND

TOTAL

2,158,646.00 330,169.00 52,641.00 93,417.00 29,537.00 633,725.00
9,150.00 3,625.00 82,964.00 68,034.00 52,855.00 -327 ,349. 00 324,563.00
720. 00 25,691.00

2,158,646.00 330,169.00 52,641.00 93,417.00 29,537.00 633,725.00

29,868.00

9,150.00 3,625.00 82,964.00 68,034.00 52,855.00 -327 ,349. 00 324,563.00 29,868.00

4,800.00

4,800.00 720. 00
25,691.00

250. 00

250. 00

18,582.60

18,582.60

29,994.68

29,994.68

54,526. DD

54,526.00

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

$ 3,538,638.00 $ 137,771.28 $ 3,676,409.28

See notes to the financial statements.

- 25 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY SCHEDULE OF LOCAL ANO OTHER REVENUE YEAR ENDED JUNE 30 1994

SCHEDULE "5"

City Wide School Tax Bremen, City of
Other Anti trust Milk Settlement Donations Interest Earned Sales Breakfast Lunches School Assets Other Tuition Other

---

G--O-V-ER--NM--E-N-TA-L-

FUND TYPES
--- ---------

-

SPECIAL

GENERAL

REVENUE

-----FU-N-D------

FUND
-------------

TOTAL
-------------

B25, 500. 00

$ 825,500.00

79,525.00 7,022.35

271. 79 999. 00 4,256.99

271. 79 80,524.00 11,279.34

94,970.15 3,597.03
-------------

8,358.53 161,886.87
110. 00 33,847.65
I, 130. 00 10,252.43
-------------

8,358.53 161,886.87
110.00 33,847.65 96,100.15 13,849.46
-------------

$1,010,614.53$ 221,113.26$ 1,231,727.79

See notes to the financial statements.

- 26 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY SCHEDULE OF EXPENDITURES BY OBJECT GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30 1994

SCHEDULE "6"

EXPENDITURES
Operating Costs Salaries Employee Benefits Travel of Employees Professional and Technical Services Water. Sewer and Cleaning Services Repair and Maintenance Services Rents Insurance Communications Commodity Hauling Shared Services Other Purchased Services Supplies Energy Food Usage Books, Textbooks and Peri odi cal s Dues and Fees Other Expenditures
Non operating Costs Equipment
Total Expenditures

GENERAL FUND

SPECIAL REVENUE
FUND

TOTAL

3,192,407.42 877,828.39 9,802.23 34,203.80 19,460.30 57,360.96 9,878.50 25,654.98 11,625.02
3,125.00
101,652.14 116,005.56
45,151.05 9,778.33
10,094.90

337,7B3.47 $ 3,530,190.89

88,924.23

966,752.62

6,223.90

16,026.13

25,664.93

59,868.73

737.00

20,197.30

5,096.81

62,457.77

9,B7B.50

25,654.98

1,301.68

12,926.70

2,052.69

2,052.69

3,125.00

582. 66

582. 66

80,009.39

181,661.53

17,164.55

133,170.11

156,041.27

156,041.27

45,151.05

2,163.84

11,942.17

2,403.64

12,498.54

19,245.85

57,872.53

77,118.38

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

$ 4,543,274.43 $ 784,022.59 $ 5,327,297.02

See notes to the financial statements.

- 27 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY SCHEDULE OF EXPENDITURES BY OBJECT LOTTERY PROGRAMS YEAR ENDED JUNE 30 1994

SCHEDULE "7"

EXPENDITURES
------------
Operating Costs Salaries Employee Benefits Travel of Employees Energy Supplies Other Expenditures
Nonoperating Costs Equipment
Total Expenditures

COMPUTERS IN
CLASSROOMS
-------------

MED I A CENTER AND
LIBRARY EQUIPMENT
-------------

PRE-KINDERGARTEN

----

PROGRAM
------------

TOTAL
-------------

1,512.00$ 20,497.19

18,893.59 $ 4,901.34 2,564.54 214 .12
27,506.89 465. 00

18,893.59 4,901.34 2,564.54 214 .12
49,516.08 465. 00

17,070.60

9,497.49

26,568.09

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

18,582.60 $ 29,994.68
------- -----

54,545.48 $ 103,122.76

See notes to the financial statements.

- 28 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30 1994

SCHEDULE "8"

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

THIRTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

STAFF DEVELOPMENT
PROGRAM

$2,687,728.00$ 29,537.00

$ 2,960,957.31 142,373.05 $

29,741.83

$ 3,103,330.36 $ 29,741.83

-44,835.68

-204. 83

$ 3,058,494.68 $ 29,537.00

0. 00 $

0. 00

See notes to the financial statements.

- 29 -

GENERAL AND CAREER EDUCATION PROGRAMS
Kindergarten (*)
Grades I - 3 (*)
Sub-Total - K-3
Grades 4 - 5 (*)
Grades 6 - 8 (*)
Grades 9 - 12 (*)
High School laboratories (*)
Vocational Education Laboratories (*)
Total General and Career Education Programs
SPECIAL EDUCATION PROGRAMS
Regular Programs Category I (*) Category II (*) Category 111 (*) Itinerant Supplenental Speech
Sub-Total - Regular Category V (Gifted) (*)
Total Special Education Programs
REMEDIAL EDUCATION PROGRAM (*)
MEDIA CENTER PROGRAMS

ORIGINAL

ALLOTMENTS FROM DEPARTMENT OF EDUCATION

REQUIRED

TOTAL

....L

ORIGINAL

MID-TERM

REQUIRED

227,790.00 598 347 .00 826,137.00 90 296,568.00 90 478,195.00 90 250,169.00 90 215,900.00 90 91 677 .00 90

205,011.00 $ 538 512.30 743,523.30 $ 266,911.20 430,375.50 225,152.10 194,310.00 82 509.30

0.00 $ 205,011.00 538 512.30
0.00 $ 743,523.30 266,911.20 430,375.50 225,152.10 194,310.00
52 855. 00 135 364.30

$ 2 158 646.00

$ 1 942 781.40 $ 52 855.00 $ 1 995 636.40

306,882.00

276,193.80 $

0.00 $ 276,193.80

306,882.00 90 23 287 .00 90 330 169.00 52 641.00 90 93 417 .00 90

276,193.80 $ 20 958.30 297 152.10 $ 47 376.90 $ 84 075.30 $

0.00 $ 276,193.80 20 958.30
0.00 $ 297 152.10 0.00 $ 47 376.90 0.00 $ 84 075.30

Total Thirteen Weighted and Media Center $ 2 634 873.00

$ 2 371 385.70 $ 52 855. 00 $ 2 424 240. 70

STAFF DEVELOPMENT PROGRAMS (1) Cost of Instruction Professional Developnent

9,250.43 100 20 286.57 100

9,250.43 $ 20 286. 57

0.00 $

9,250.43 20 286.57

Total Staff Developrrent

29 537 .00

29 537 .00 $

0.00 $ 29 537 .00

$ 2 664 410.00
(*) Identifies Thirteen Weighted Programs.
Note: (1) $2,610.43 of the allo-nt for Professional Development has been transferred to Cost of Instruction as authorized by OCGA 20-2-182.

$ 2 400 922.70 $ 52 855.00 $ 2 453 777.70

See notes to the financial statements.

- 30 -

SCHEDULE "9"

REQUIRED ALLOTMENT

SALARIES ACTUAL

DISTRIBUTION BY RESPECTIVE PORTIONS

AMOUNT OF UNDEREXPENOITURE
FOR REQUIRED ALLOTMENT

REQUIRED ALLOTMENT

OPERATIONS ACTUAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

199,941.30 $ 236,457.47

5,069.70 $

8,723.00

522 353. 70

678 210.49

16 158. 60

27 284.34

722,295.00 $ 914,667.96 $

0.00

21,228.30 $ 36,007.34 $

0.00

259,180.20

388,178.87

0.00

7,731.00

10,693.21

0.00

418,307.40

491,509.08

0.00

12,068.10

12,123.29

0.00

215,777.70

252,517.56

0.00

9,374.40

17,240.70

0.00

186,251.40

227,507.17

0.00

8,058.60

12,530.38

0.00

125 186. 20

146 662.21

0.00

10 178.10

10 200.24

0.00

$ 1 926 997. 90 $ 2 421 042.85 $

0.00

68 638. 50 $ 98 795.16 $

0.00

53,577.00 $ 65,941.20 146,955.60

54,567.73 74,827.44 167,138.25

2,586.60 $ 1,329.30 3,768.30
693.00 1 342.80

6,632.44 1,477.00 7,582.16

266,473.80 $ 296,533.42 $

0.00

9,720.00 $ 15,691.60 $

0.00

20 411.10

29 740. 78 $

0.00

547. 20

761.36 $

0.00

286 884.90 $ 326 274.20

10 267 .20 $ 16 452.96

46 587 .60 $ 100 178.72 $

0.00

789.30 $

2 333.79 $

0.00

65 979.90 $ 113 461.54 $

0.00

18 095.40 $ 24 791.14 $

0.00

$ 2 326 450.30 $ 2 960 957 .31 $

0.00

97 790.40 $ 142 373.05 $

0.00

9,250.43 $

9,455.26 $

0.00

20 286.57

20 286. 57

0.00

29 537.00 $ 29 741.83 $

0.00

$ 2 326 450.30 $ 2 960 957 .31 $

0.00

127 327.40 $ 172 114.88 $

0.00

- 31 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY SCHEDULE OF BOARD MEMBERS YEAR ENDED JUNE 30 1994
BOARD MEMBER ADDRESS
Mrs. Janelle Morris, Chairperson (*) P. 0. Box 371 Bremen. Georgi a 30110
Mr. Cliff Coats (*) P. 0. Box 622 Bremen, Georgi a 30110
Mr. Terry Crawford 105 Maple Street Bremen, Georgi a 30110
Mr. Gordon Parrish ( *) 110 Hamilton Circle Bremen, Georgi a 30110
Mr. Daryl Sellers (*) 806 Valley Run Bremen, Georgi a 30110
Mr. Jerry Stanford (*) P. 0. Box 712 Bremen, Georgi a 30110

SCHEDULE "10"

(*) Denotes Board Members Serving as of June 30, 1994

See notes to the financial statements.

- 32 -

SECTION II COMPLIANCE

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 24, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe City of Bremen Board of Education
COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of the City of Bremen Board of Education as of and for the year ended June 30, 1994, and have issued our report thereon dated March 24, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the financial statements.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standardt issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
Compliance with laws, regulations, contracts, and grants applicable to the City ofBremen Board of Education is the responsibility ofthe Board's management. As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we performed tests of the Board's compliance with certain provisions oflaws, regulations, contracts, and grants. However, the objective of our audit of the financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion.
Material instances ofnoncompliance are failures to follow requirements or violations of prohibitions, contained in Jaws, regulations, contracts, or grants, that cause us to conclude that the aggregation of the misstatements resulting from those failures or violations is material to the financial statements. The results of our tests of compliance disclosed a material instance ofnoncompliance, which is described in the Schedule of Findings and Improper or Questioned Costs.
94CRL-20A

As also described in the Schedule of Findings and Improper or Questioned Costs, the material instance of noncompliance noted above has been corrected in the financial statements.
We considered this material instance ofnoncompliance in forming our opinion on whether the fiscal year 1994 financial statements are presented fairly, in all material respects, in conformity with generally accepted accounting principles, and this report does not affect our report dated March 24, 1995 on those financial statements.
Except as described above, the results ofour tests of compliance indicate that with respect to the items tested the City of Bremen Board ofEducation complied, in all material respects, with the provisions referred to in the third paragraph of this report, and with respect to items not tested, nothing came to our attention that caused us to believe that the City ofBremen Board ofEducation had not complied, in all material respects, with those provisions.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
f~~
Claude L. Vickers State Auditor
CLV:cm 94CRL-20A

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 24, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members of the City of Bremen Board of Education

SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS

Ladies and Gentlemen:

We have audited the financial statements of the City of Bremen Board of Education as of and for the year ended June 30, 1994, and have issued our report thereon dated March 24, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the financial statements.

We have applied procedures to test the City ofBremen Board of Education's compliance with the following requirements applicable to each of its Federal financial assistance programs, which are listed in the Schedule ofFederal Financial Assistance, for the year ended June 30, 1994:

(1) Political Activity

(5) Allowable Costs/Cost Principles

(2) Civil Rights

(6) Audit Follow-Up/Resolution

(3) Cash Management

(7) Administrative Requirements

(4) Federal Financial Reports

Our procedures were limited to the applicable procedures described in the Office of Management and Budget's "Compliance Supplement for Single Audits of State and Local Governments" and other additional procedures as deemed necessary. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Board's compliance with the requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion.

94CRL-50

With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph of this report. With respect to items not tested, nothing came to our attention that caused us to believe that the City of Bremen Board ofEducation had not complied, in all material respects, with those requirements. However, the results of our procedures disclosed immaterial instances ofnoncompliance with those requirements, which are described in the Schedule of Findings and Improper or Questioned Costs.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
c::1~~
Claude L. Vickers State Auditor
CLV:cm 94CRL-50

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 24, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members of the City ofBremen Board of Education

SINGLE AUDIT REPORT ON COMPLIANCE W11H SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS

Ladies and Gentlemen:

We have audited the financial statements of the City of Bremen Board of Education as of and for the year ended June 30, 1994, and have issued our report thereon dated March 24, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the financial statements.

In connection with our audit of the fiscal year 1994 financial statements of the City of Bremen Board of Education and with our consideration of the Board's internal control structure used to administer Federal financial assistance programs, as required by Office of Management and Budget (0MB) Circular A-128, "Audits of State and Local Governments", we selected certain transactions applicable to certain nonmajor Federal financial assistance programs for the year ended June 30, 1994. As required by 0MB Circular A-128, we have performed auditing procedures on the selected transactions to test compliance with the requirements governing:

( 1) Types of Services Allowed or Unallowed

(2) Eligibility

Our procedures were substantially less in scope than an audit, the objective ofwhich is the expression ofan opinion on the City ofBremen Board ofEducation's compliance with these requirements. Accordingly, we do not express such an opinion.

With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph. With respect to items not tested, nothing

94CRL-120

came to our attention that caused us to believe that the City of Bremen Board of Education had not complied, in all material respects, with those requirements.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:cm 94CRL-120

SECTION III INTERNAL CONTROL

CLAUDE L. VICKERS
STATE AUDITOR (404) 6562174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 24, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe City ofBremen Board ofEducation
REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of the City of Bremen Board of Education as of and for the year ended June 30, 1994, and have issued our report thereon dated March 24, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the financial statements.
We conducted our audit in accordance with generally accepted auditing standards, and Government Auditing Standard~ issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
In planning and performing our audit ofthe financial statements ofthe City of Bremen Board of Education for the year ended June 30, 1994, we considered the internal control structure in order to determine our auditing procedures for the purpose ofexpressing our opinion on the financial statements and not to provide assurance on the internal control structure.
The management ofthe City ofBremen Board of Education is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected.
94ICL-3

Also, projection of any evaluation of the structure to future periods is subject to risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate.

For the purposes of this report, we have classified the significant internal control structure policies and procedures in the following categories:

(I) Cash and Cash Equivalents

(6) Employee Compensation

(2) Inventories

(7) General Ledger

(3) Revenue/Receivables/Receipts

(8) General Fixed Assets

(4) Procurement

(5) Expenditures/Liabilities/ Disbursements

For all ofthe internal control categories listed above, we obtained an understanding of the design ofrelevant policies and procedures and whether they have been placed in operation, and we assessed control risk.

We noted certain matters involving the internal control structure and its operation that we consider to be reportable conditions under standards established by the American Institute ofCertified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control structure that, in our judgment, could adversely affect the entity's ability to record, process, summarize, and report financial data consistent with the assertions of management in the financial statements.

As described in the Schedule ofFindings and Improper or Questioned Costs, reportable conditions were noted in the following control categories:

(1) Accounting Controls (Overall)

(2) General Fixed Assets

A material weakness is a reportable condition in which the design or operation of one or more of the specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions.

Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that all of the reportable conditions disclosed above are also considered to be material weaknesses.

94ICL-3

These conditions were considered in determining the nature, timing, and extent of the procedures to be performed in our audit of the City ofBremen Board of Education's financial statements and this report does not affect our report thereon dated March 24, 1995.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution ohhis report which is a matter of public record.
t r ~ ~ Respectfully submitted,
Claude L. Vickers State Auditor
CLV:cm 94ICL-3

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 24, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe City of Bremen Board of Education
SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS
Ladies and Gentlemen:
We have audited the financial statements of the City of Bremen Board of Education as of and for the year ended June 30, 1994, and have issued our report thereon dated March 24, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the financial statements.
We conducted our audit in accordance with generally accepted auditing standards; Government Auditing Standards issued by the Comptroller General of the United States; and the provisions of Office of Management and Budget (0MB) Circular A-128, "Audits of State and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement and about whether the City of Bremen Board ofEducation complied with laws and regulations, noncompliance with which would be material to a Federal financial assistance program.
In planning and performing our audit for the year ended June 30, 1994, we considered the Board's internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the Board's financial statements and to report on the internal control structure in accordance with 0MB Circular A-128. This report addresses our consideration of internal control structure policies and procedures relevant to compliance with requirements applicable to Federal financial assistance programs. We have addressed internal control structure policies and procedures relevant to our audit of the financial statements in a separate report dated March 24, 1995.

94ICL-16

The management ofthe City ofBremen Board ofEducation is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles, and that Federal financial assistance programs are managed in compliance with applicable laws and regulations. Because of inherent limitations in any internal control structure, errors, irregularities, or instances of noncompliance may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate.

For the purpose of this report, we have classified the significant internal control structure policies and procedures used in administering Federal financial assistance programs in the following control categories:

GENERAL REQUIREMENTS

SPECIFIC REQUIREMENTS

(1) Political Activity (2) Civil Rights (3) Cash Management (4) Federal Financial Reports

(1) Types of Services Allowed or Unallowed
(2) Eligibility
(3) Matching, Level of Effort, and/or Earmarking

(5) Allowable Costs/Cost Principles

(4) Reporting

(6) Audit Follow-Up/Resolution (7) Administrative Requirements

(5) Applicable Special Tests and Provisions
(6) Other Requirements Claims for Advances and Reimbursements

For all of the internal control structure categories listed above, we obtained an understanding of the design of relevant policies and procedures and determined whether they have been placed in operation, and we assessed control risk.

During the year ended June 30, 1994, the City of Bremen Board ofEducation had no major Federal financial assistance programs and expended 53% of its total Federal financial assistance under the following nonmajor Federal financial assistance programs:

Food and Nutrition Program Food Services National School Lunch Program

94ICL-16

Elementary and Secondary Education Act - Chapter 1 Education ofDeprived Children
Individuals with Disabilities Education Act - Title VI, B - Flow Through
We performed tests of controls, as required by 0MB Circular A-128, to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we considered relevant to preventing or detecting material noncompliance with general requirements, and specific requirements, as described above that are applicable to the aforementioned nonmajor Federal financial assistance programs. Our procedures were less in scope than would be necessary to render an opinion on these internal control structure policies and procedures. Accordingly, we do not express such an opinion.
We noted certain matters involving the internal control structure and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the Board's ability to administer Federal financial assistance programs in accordance with applicable laws and regulations.
As described in the Schedule ofFmdings and Improper or Questioned Costs, reportable conditions were noted in the following control categories:
(1) Cash Management
(2) Administrative Requirements
A material weakness is a reportable condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that noncompliance with laws and regulations that would be material to a Federal financial assistance program may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions.
Our consideration of the internal control structure policies and procedures used in administering Federal financial assistance would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, as described in the Schedule of Findings and Improper or Questioned Costs, a reportable condition was noted in the following control category that is also considered to be a material weakness:
Administrative Requirements
94ICL-16

This report is intended solely for the use ofmanagement, the Federal cognizant audit agency and other Federal grantor agencies and should not be used for any other purpose. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
d::"~
Claude L. Vickers State Auditor
CLV:cm 94ICL-16

SECTION IV FINDINGS AND IMPROPER OR QUESTIONED COSTS

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30 1994

PRIOR YEAR

AUDIT FOLLOW-UP/RESOLUTION Improper Expenditures Financial Statements Amount: $10,469.67 Audit Control Number 7631-93-01

The audit report for the year ended June 30, 1989, disclosed improper expenditures of $10,469.67 made from the Board's General Fund for athletic and extracurricular activities. These type expenditures are considered to be beyond the customary scope of expenditures of school funds for educational purposes as described by Official Code ofGeorgia Annotated Section 20-2-411. This questioned cost had not been resolved at June 30, 1994. Reimbursement of the $10,469.67 should be secured for deposit to the Board's General Fund.

AUDIT FOLLOW-UP/RESOLUTION Board Members Travel Financial Statements Amount: $2,346.19 Audit Control Number 7631-93-02

The audit report for the year ended June 30, 1989, reported improper reimbursements for travel expense to various Board members. These amounts are summarized as follows:

Board Member

Amount Paid To
Board Member

Amount Allowed

Amount To Be Refunded

Mr. Terry Crawford Ms. Janelle Morris Mr. Gordon Parrish
Total

$ 1,311.02 $ 932.50 $ 378.52

1,589.34

918.00

671.34

2 186.83

890.50

1 296.33

$ 5 087 19 $ 2 74] 00 $ 2 346 19

This questioned cost had not been resolved at June 30, 1994. Reimbursement of the $2,346.19 should be secured and deposited to the Board's General Fund.

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30 1994
PRIOR YEAR
AUDIT FOLLOW-UP/RESOLUTION Lack ofDocumentation for Expenditures Financial Statements Amount: $25,994.10 Audit Control Number 7631-93-03
The audit reports for fiscal years 1989 and 1990, reported that payments of$14,419.10 and $11,575.00 respectively were made from the Board's Community Education Fund for expenditures that were not supported by vouchers or other documentation. This questioned cost had not been resolved at June 30, 1994. The Board should provide supporting documentation for these expenditures or secure reimbursement of $25,994.10 from appropriate sources for deposit to the Community Education Fund.
AUDIT FOLLOW-UP/RESOLUTION Improper Expenditures Financial Statements Amount: $5,309.39 Audit Control Number 7631-93-04
The audit report for the year ended June 30, 1992, disclosed improper expenditures of $1,631.27 and additional expenditures not supported by proper documentation of$3,678.12. These total questioned costs of $5,309.39 had not been resolved as of the date of this audit. The Board should provide supporting documentation for the $3,678.12 of undocumented expenditures and reimbursement of$1,631.27 for the improper expenditures should be secured for deposit to the Board's General Fund.
AUDIT FOLLOW-UP/RESOLUTION Failure to Meet Expenditure Requirements Financial Statements Amount: $110.68 Audit Control Number 7631-93-07
The audit report for the year ended June 30, 1993, disclosed that the Staff Development - Professional Development Stipends Program had an underexpenditure ofQuality Basic Education (QBE) funds of $110.68 for the required minimum allotment. For the year under review, no adjustment was made to the Board's local fair share by the Georgia Department of Education to refund this underexpenditure as required. These funds should be returned to the Georgia Department ofEducation through an increase in the Board's local fair share for the QBE programs in a subsequent period.

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30 1994

PRIOR YEAR

AUDIT FOLLOW-UP/RESOLUTION Encumbrances Reported as Expenditures Federal Financial Assistance Amount: $3,532.50 Audit Control Number 7631-93-08

The audit report for the year ended June 30, 1993, reported that project completion reports submitted by the Board included encumbrances for materials of$3,532.50, which were recorded as expenditures/obligations in the accounting records of the following programs:

Elementary and Secondary Education Act Chapter 1 -Education ofDeprived Children (CFDA 84.010) State Program Improvements (CFDA 84.218)
Individuals with Disabilities Education Act Title VI, B - Flow Through (CFDA 84.027) Innovative Program (CFDA 84.173)

$ 826.67 $ 2,031.54
$ 634.52 $ 39.77

Chapter 7 of the Georgia Financial Accounting Handbook for Local School Systems issued by the Georgia Department ofEducation states, in part, as follows:

" encumbrances may not be included as expenditures in any financial reports required to be submitted to the Georgia Department ofEducation effective with the fiscal year ended June 30, 1991."

During the year under review, no action was taken to refund these balances to the Georgia Department of Education. The unexpended grant balances totaling $3,532.50 should be refunded to the Georgia Department of Education.

PRIOR YEAR/CURRENT YEAR

ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation ofDuties Reportable Condition - Material Weakness Audit Control Number 7631-93-05

The audit report for the year ended June 30, 1993, stated that the Board did not provide for adequate separation ofemployee duties in the performance of accounting functions and related procedures. For the year under review, our audit noted no improvement regarding adequate separation of employee duties. This deficiency was a result ofmanagement's decision to limit the number of administrative staff made responsible for accounting functions. Management should periodically review this decision to determine if employee duties can be reassigned to achieve a higher degree of internal control with existing staff.

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEARENDEDJUNE30 1994
PRIOR YEAR/CURRENT YEAR
ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation ofDuties Reportable Condition - Material Weakness Audit Control Number 7631-93-05
Note: Federal financial assistance programs affected by this finding are as follows: Chapter I Program (CFDA 84.010) School Food Services Fund (CFDA 10.550, 10.553 and 10.555)
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 7631-93-06
The audit report for the year ended June 30, 1993, noted that the management of the City ofBremen Board ofEducation had chosen not to maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. In the year under review, the Board did not establish a General Fixed Assets Account Group within the formal accounting records. This condition resulted in the general purpose financial statements of the Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the
Board and should include but may not be limited to date acquired, acquisition cost, estimated replacement cost,
location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30 1994
CURRENT YEAR
GENERAL LEDGER Failure to Transfer Local Matching Funds Financial Statements Material Noncompliance Audit Control Number 7631-94-01
The Board received approval for State capital outlay project funding, through Georgia State Financing and Investment Commission, for the 1995 fiscal year. Both the instructions in Chapter 70 of the Georgia Financial Accounting Handbook for Local School Systems (GFAH) and the agreement signed by the Board to receive this funding require that the Board transfer required local matching funds to the Capital Projects Fund by June 30, 1994, and designate those funds by project name and number. This transfer was not made by the Board at June 30, 1994. This condition occurred because management claimed they were not aware of the provisions ofGFAH. A correcting audit adjustment was necessary to transfer $35,837.50 from the General Fund to the Capital Projects Fund - GSFIC Project No. 95/94S-763-086 as required.
CASH MANAGEMENT Excessive Cash Balances Federal Financial Assistance Reportable Condition Nonmaterial Noncompliance Audit Control Number 7631-94-02
A review of cash management procedures for the Elementary and Secondary Education Act - Chapter 1 Education ofDeprived Children Program disclosed that cash draws utilizing DE form 0147, "Quarterly Report ofExpenditures and Estimated Requirement for Grant Funds", were made in advance of immediate cash needs, resulting in the accumulation ofexcessive cash balances. During fiscal year 1994, the program had an average cash balance of$18,235.68 with excessive ending monthly cash balances in 9 months. The excessive cash balances are a result of management's failure to adequately forecast the cash needs of this program. Procedures should be implemented to minimize the time elapsing between the transfer of funds from the Georgia Department of Education and disbursement of such funds by the Board.

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30 1994
CURRENT YEAR
AUDIT FOLLOW-UP/RESOLUTION Failure to File Corrective Action Plan Federal Financial Assistance Nonmaterial Noncompliance Audit Control Number 7631-94-03
Our audit disclosed that the Board failed to submit a corrective action plan for the 1993 audit report as required by 0MB Circular A-128 to the Georgia Department ofEducation from whom the Board received funds for the following programs:
School Food Services Fund (CFDA 10.550, 10.553 and 10.555) Elementary and Secondary Education Act
Chapter 1 - Education ofDeprived Children (CFDA 84.010) State Program Improvements (CFDA 84.218) Individuals with Disabilities Education Act Title VI, B - Flow Through (CFDA 84.027) Innovative Program (CFDA 84.173}
Management claimed that it was unaware of the 30 day requirement to submit a corrective action plan to the grantor agency. Procedures should be implemented to ensure that a corrective action plan is submitted in a timely manner as required.

SECTIONV PERTINENT VIEWS OF RESPONSIBLE OFFICIALS

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY PERTINENT VIEWS OF RESPONSIBLE OFFICIALS YEAR ENDED JUNE 30 1994
In response to your audit received by the Bremen School System on June 16, 1995, I offer the following:
1. Year ending June 30, 1994 - Variances 1, 2 and 3 will be addressed and altered where possible; however, individual school accounts are audited annually by a CPA firm.
2. Year ending June 30, 1989 - Number 7631-93-01 has been referred to the Bremen Board ofEducation for advisement.
3. Year ending June 30, 1990 - Number 7631-93-03 has been referred to the Bremen Board of Education for advisement.
4. Year ending June 30, 1993 - Number 7631-93-08: We did just as the State Department of Education program coordinators told us to do. We plan to pursue this with system attorneys Mike and Thomas B. Murphy ifwe are required to return this money.
Note: The City ofBremen Board ofEducation has elected not to provide comments for inclusion in this report other than the above.