Audit report, City of Bremen Board of Education, Haralson County, Georgia, year ended June 30, 1999

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AUDIT REPORT CITY OF BREMEN BOARD OF EDUCATION
HARALSON COUNTY, GEORGIA YEAR ENDED JUNE 30, 1999
STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

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

SECTION I

FINANCIAL

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

EXHIBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

,

GENERAL AND SPECIAL REVENUE FUNDS

7

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

8

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

20

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

21

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

22

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

24

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

26

2 SCHEDULE OF STATE REVENUE

28

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

29

4 SCHEDULE OF EXPENDITURES

LOITERY PROGRAMS

30

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

5

OVERALL

31

6

BY PROGRAM

32

SECTIONll
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-B3

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

SECTIONN FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, s.w., Suite 214
Atlanta, Georgia 30334-8400
July 13, 2000

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Bremen Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general purpose financial statements of the City of Bremen Board of Education, as of and for the year ended June 30, 1999, as listed in the table of contents. These general purpose financial statements are the responsibility ofthe City ofBremen Board of Education's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in the notes to the general purpose financial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:
* The general purpose 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.

99ARL-13

* School activity accounts maintained at the individual schools are not included in the general purpose
fmancial statements. To conform to generally accepted accounting principles, these accounts should be included in the general purpose financial statements.
* The Board did not recognize as expenditures, in the year ended June 30, 1999, a portion of salaries
and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 1999. Also funds received, subsequent to June 30, 1999, from the Georgia Department of Education 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, 1998, were improperly recorded in the year ended June 30, 1999. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general purpose financial statements ofthese variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general purpose financial statements ofthe matters referred to in the preceding paragraph, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the City of Bremen Board of Education as of June 30, 1999, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated July 13, 2000, on our consideration of the City of Bremen Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants.
Our audit was performed for the purpose of forming an opinion on the general purpose financial statements of the City of Bremen Board of Education taken as a whole. The accompanying combining statements (Exhibits E through H) and the financial schedules (Schedules 1 through 6), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the general purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and in our opinion, except for the effects of the matters referred to in the third paragraph, such information is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole.
99ARL-13

A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press ofthe State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,
W.~
Ru ell W. Hinton State Auditor
RWH:gp 99ARL-13

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 1999

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
Due from Other Funds
Inventories Food Donated Commodities Purchased Food
Amount Available in Debt Service Fund
Amount to be Provided in Future Years For Payment of: Bond Debt Capital Lease Agreements

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$

223,589,13 $

124,924,77 $

775,881,24

12,500.00

12,671.94

46,122,49

574,501,74

10,936.03 2,555.37

Total Assets

$

248,761,07 $

184,538,66 $ 1,350,382.98

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retainages Payable Due to Other Funds Capital Lease Agreements General Obligation Bonds Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Bus Replacement Funds For Continuation of Federal Programs For Debt Service For Expired Grant Balances/Questioned Costs For Inventories Food Donated Commodities Purchased Food For Purpose of Bond Issue For SPLOST Projects For State Capital Outlay Projects Unreserved Undesignated
Total Fund Equity

$

12,174.88 $

26,795.73 $

15,830.63

72,803.99

4,866.63

228,074.72

30,103.25

$

12,174,88 $

104,466.35 $

274,008.60

$

7,385,00

$

12,500.00

2,565.23

10,936.03 2,555.37
$

753,875.38 295,161.06
10,615.28

226,635,96

54,080.91

16,722.66

$

236,586.19 $

80,072.31 $ 1,076,374.38

Total Liabilities and Fund Equity

$

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

248,761,07 $

184.538.66 $ 1,350,382.98

EXHIBIT "A"

DEBT SERVICE
FUND

$

229,064.71

ACCOUNT GROUP GENERAL
LONGTERM DEBT

TOTALS

(Memorandum Only)

JUNE 30,1999

JUNE 30,1998

$ 1,353,459.85 $ 2,161,219.38

12,500.00

10,000.00

633,296.17

731,559.81

10,122.73

$

229,064.71

10,936.03 2,555.37
229,064.71

8,599.02 2,318.99
289,273.33

1,935,935.29 18,507.04

1,935,935.29 18,507.04

2,345,726.67 27,359.00

$

229,064.71 $ 2,183,507.04 $ 4,196,254.46 $ 5,586,178.93

$

54,801.24 $

76,608.68

72,803.99

42,368.60

4,866.63

2,692.37

228,074.72

194,852.96

30,103.25

69,385.38

10,122.73

$

18,507.04

18,507.04

27,359.00

2,165,000.00

2,165,000.00

2,635,000.00

$ 2,183,507.04 $ 2,574,156.87 $ 3,058,389.72

$

229,064.71

0.00

$

229,064.71

$

7,385.00 $

3,428.00

12,500.00

92,912.86

229,064.71

289,273.33

2,565.23

10,936.03 2,555.37 753,875.38 295,161.06 10,615.28

8,599.02 2,318.99 1,717,444.50 170,664.51

297,439.53

243,148.00

$ 1,622,097.59 $ 2,527,789.21

$

229,064.71 $ 2,183,507.04 $ 4,196,254.46 $ 5,586,178.93

/

-3-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30.1999

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

GENERAL FUND

SPECIAL REVENUE
FUND

$ 5,553,855.68 $
1,048,955.54 342,219.17

259,724.51 779,042.75
247,074.52

$ 6,945,030.39 $ 1,285,841.78

$ 4,846,071.44 $
232,865.59 210,941.57 178,079.62 165,622.26 587,092.42
52,880.29 439,223.52
41,962.33 3,440.00
27,480.33 3,768.86
71,484.51

631,151.18 15,995.10
248,312.71 1,619.27
20,246.20
19,658.93
468,892.80

400.65 4.35

$ 6,861,317.74 $ 1.405,876.19

$

83,712.65 $

-120,034.41

$

821.22 $

-16,275.58

$

-15,454.36 $

16,275.58 -821.22
15,454.36

$

68,258.29 $

-104,580.05

168,327.90

182,078.97

2,337.01 236.38

FUND BALANCE JUNE 30

$

236,586.19 $

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

80,072.31

EXHIBIT"B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 1999

JUNE 30, 1998

$

7,135.29

$ 5,820,715.48 $ 5,843,756.67

779,042.75

573,060.92

525,530.75 $

454,595.41

2,029,081.70

1,626,050.85

256,487.78

10,188.47

855,969.94

614,009.46

$

789,153.82 $

464,783.88 $ 9,484,809.87 $ 8,656,877.90

$

10.45

16,433.00

1,574,322.27 8,451.31 $ 1,671.42
$ 1,600,888.45 $ $ -811,734.63 $

$
470,000.00 54,992.50

5,477,222.62 $
248,860.69 459,254.28 179,698.89 185,868.46 587,092.42
52,890.74 458,882.45
58,395.33 3,440.00
27,480.33 472,661.66
71,484.51
1,574,322.27
478,851.96 56,668.27

524,992.50 $ 10,393,074.88 $ -60,208.62 $ -908,265.01 $

4,806,778.25
234,401.61 383,705.84 171,752.44 208,894.64 531,566.48 143,566.98 456,452.05
73,194.35 3,393.00 13,305.37
383,210.46 69,458.02
1,144.72 1,368,803.90
109,497.15 104,669.33
772.06
9,064,566.65
-407,688.75

$ -811,734.63 $ 1,888,109.01

$

1,897.25

$

17,096.80

-17,096.80

2,735,000.00 14,440.16 -14,440.16

$

0.00 $ 2,736,897.25

-60,208.62 $ 289,273.33

-908,265.01 $ 2,527,789.21

2,329,208.50 201,663.70

2,337.01 236.38

-2,929.67 -153.32

$ 1,076,374.38 $

229,064.71 $ 1,622,097.59 $ 2,527.789.21

-5-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30,1999

EXHIBIT "COO

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 5,447,664,66 $ 5,553,855,68

950,000,00 224,250,00

1,048,955.54 342,219,17

Total Revenues

$ 6,621,914,66 $ 6,945,030,39

EXPENDITURES

Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Enterprise Operations
Debt Service
Total Expenditures

$ 4,815,937,35 $ 4,846,071,44

198,595.93 165,406,57 170,293,88 211,840,84 563,887,71 49,658,28 451,576,61 49,555,98
4,119,00 17,521,29

232,865,59 210,941,57 178,079,62 165,622,26 587,092.42
52,880,29 439,223,52
41,962,33 3,440.00
27,480.33 3,768,86
71,484,51 405,00

$ 6,698,393,44 $ 6,861,317,74

Excess of Revenues over (under) Expenditures

$ -76,478,78 $ 83,712,65

OTHER FINANCING SOURCES (USES)
Other Sources Other Uses
Total Other Financing Sources (Uses)

$

821.22

-16,275.58

$ -15,454,36

Excess of Revenues and Other Financing Sources
over (under) Expenditures and Other Financing Uses $ -76,478,78 $

68,258,29

FUND BALANCE JULY 1, 1998

0,00

168,327.90

Adjustments

FUND BALANCE JUNE 30,1999

$ -76,478.78 $ 236,586,19

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 283,800,61 $ 259,724,51

132,300,00

779,042,75

260,882,00

247,074,52

$ 676,982,61 $ 1,285,841,78

$ 202,604.48 $ 631,151.18

15,347,24 20,000,00
9,934,89

15,995,10 248,312,71
1,619,27 20,246,20

20,753,37

19,658.93

425,732,00

468,892,80

$ 694,371.98 $ 1,405,876,19 $ -17,389,37 $ -120,034.41

$ 16,275,58 -821.22
$ 15,454.36

$ -17,389.37 $ -104,580.05

0,00

171,160,96

63,20

$ $========== -17,326.17

66,580,91

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

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS nJNE 30. 1999

EXHIDIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The City of Bremen Board of Education (Board) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes. Accordingly, the Board is a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The Board uses funds and an account group to report on its financial position and the results 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. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
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 general purpose financial statements.
The general purpose financial statements account for all State, Federal, Taxes and Other funds under control ofthe Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most of a Board's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.
SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department ofEducation and from the Federal government to accomplish specific educational objectives.
-8-

CITY OF BREMEN BOARD OF EDUCAnON - HARALSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30.1999

EXHIBIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A fmancial reporting device used to account for general obligation debt outstanding and capital lease obligations.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
Governmental funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income.
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 1999, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1998 and ending in early June 1999. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1998 and ending in August 1999. State grants to fund the State's share ofthese contracts were disbursed from the Georgia Department of Education
- 9-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1999

EXHIBIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
to the Board in the same twelve months. As of June 30, 1999, compensation under these employment contracts had been earned, but two ofthe twelve monthly payments, due for July and August 1999, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1999. Also, the State's portion of the compensation paid in July and August 1999 was received and recorded as revenue in the fiscal year subsequent to June 30, 1999. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1998, were recorded in the year ended June 30, 1999. 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's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level ofbudget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper of general 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 with approval of the City Council adopts a final school budget. This final budget is then submitted, in accordance with provisions ofthe Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
The Statement ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual presents actual and budgeted data for the General Fund and Special Revenue Fund. To facilitate comparison with the budget, the following adjustments have been made to fund balance as reflected on Exhibit "B" of this report:

- 10-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30.1999

EXHIBIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

FUND BALANCE JULY 1,1998
Adjustments Inventories - July 1, 1998 Food Donated Commodities Purchased Foods
Fund Balance July 1, 1998 (Budget Basis)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JUNE 30, 1999 (Budget Basis)
CASH ~D CASH EQUIVALENTS

Special Revenue
Fund $ 182,078.97
-8,599.02 . -2.318.99 $ 171,160.96
-104.580.05 $ 66,580.91

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

INVESTMENTS

COMPOSITION OF INVESTMENTS Investments made by the Board in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Board to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:

(1) Obligations issued by the State of Georgia or by other states,

(2) Obligations issued by the United States government,

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CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1999

EXHIBIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,

(4) Obligations of any corporation of the United States government,

(5) Prime banker's acceptances,

(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,

(7) Repurchase agreements, and

(8) Obligations of other political subdivisions of the State of Georgia.

RECEIVABLES

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

PROPERTY TAXES

The City of Bremen fixed the property tax levy for the 1998 tax year (calendar year) on October 20, 1998 (levy date). Taxes were due on December 20, 1998. The lien date for property taxes was January 1, 1998. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1999. The Bremen City Clerk bills and collects the property taxes for the Board ofEducation and remits the taxes collected to the Board.

The tax millage rate levied for the 1998 tax year (calendar year) for the City of Bremen Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

5.55 mills

SALES TAXES

Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $980,126.16 ($437,770.32 Carroll County and $542,355.84 Haralson County) and was recorded in the Capital Projects and Debt Service Funds. The State will terminate collection ofthe tax within Haralson County once an additional

- 12-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1999

EXHIBIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
$2,969,246.88 has been collected or on June 30, 2002, whichever occurs first. The State will terminate collection of the tax within Carroll County once an additional $2,291,730.00 has been collected or on December 31, 2002, whichever occurs first.
INVENTORIES
FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time of purchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.
GENERAL OBLIGATION BONDS
The Board entered into a joint agreement with the City of Bremen, Georgia (City) whereby the City issued general obligation bonds on behalfofthe school system. The bond premiums, discounts and issuance costs are recognized in the financial statements of the Board during the year bonds are issued. According to the terms of the aforementioned agreement, the bonds are the direct obligations of the Board; therefore, the outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group.
INTERFUND TRANSACTIONS
The Board has the following types of interfund transactions:
Reimbursements of expenditures 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 general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results of operations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation ofthis data.

- 13-

CITY OF BREMEN BOARD OF EDUCAnON - HARALSON COUNTY
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30.1999

EXHffiIT"D"

Note 2: DEPOSITS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. OCGA Section 45-8-11(b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of anyone of or any combination ofthe following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations ofthe counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or 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, 1999, the bank balances were $1,840,639.95. 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.
- 14-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1999

EXHIBIT"D"

Note 2: DEPOSITS

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

The Board's deposits are classified by risk category at June 30, 1999, as follows:

Risk Category

Bank Balance

1

$ 129,222.66

2

1,711,417.29

3

0.00

Total

$ 1.840,639.95

Note 3: NON-MONETARY TRANSACTIONS

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

Note 4: RISK MANAGEMENT

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

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

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

The Board is self-insured with regard to unemployment compensation claims. The Board accounts for claims within the same fund that the employee's salary and benefits were paid. Claims are accounted for with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. The Board has not incurred any liabilities for unemployment compensation during the last two fiscal years.

- 15 -

CITY OF BREMEN BOARD OF EDUCAnON - HARALSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1999

EXHffiIT"D"

Note 4: RISK MANAGEMENT

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

Position Covered

Amount

Superintendent Board Treasurer All Other Employees

$ 10,000.00 $ 10,000.00 $ 50,000,00

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The City of Bremen Board of Education has entered into various lease agreements as lessee for copiers and school buses. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as ofthe date oftheir inception.

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

Purpose

Interest Rates

Amount

General Government - Series 1997

3.85% - 4.30%

$ 2.165,000.00

The changes in General Long-Term Debt during the fiscal year ended June 30, 1999, were as follows:

Capital Leases

General Obligation
Bonds

Total

Balance July 1, 1998

$ 27,359.00 $ 2,635,000.00 $ 2,662,359.00

Deductions Debt Retired

8,851.96

470,000.00

478,851.96

Balance June 30, 1999

$ 18,507.04 $ 2.165.000.00 $ 2,183.507.04

At June 30, 1999, payments due by fiscal year which includes principal and interest for these items are as follows:

- 16-

CITY OF BREMEN BOARD OF EDUCAnON - HARALSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1999

EXHIBIT"D"

Note 5: GENERAL LONG-TERM DEBT

Fiscal Year Ended June 30

Capital Leases

General Obligation
Bonds

Total Debt

2000 2001 2002 2003

$ 10,122.73 $ 606,185.00 $ 616,307.73

10,122.73

635,070.00

645,192.73

676,340.00

676,340.00

474,565.00

474.565.00

Total Principal and Interest

$ 20,245.46 $ 2.392,160.00 $ 2.412.405.46

Deduct: Imputed Interest

1.738.42

Net Present Value of Future Minimum Lease Payments

$ 18,507.04

Note 6: ON-BEHALF PAYMENTS

The Board has recognized revenues and expenditures in the amount of$91,002.85 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies.

Georgia Department ofEducation Paid to the State Merit System of Personnel Administration For Health Insurance of Non-Certified Personnel In the amount of$78,547,85

Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of$12,455.00

Note 7: SIGNIFICANT COMMITMENTS

The following is an analysis of significant outstanding construction or renovation contracts executed by the Board as of June 30, 1999:

- 17 -

CITY OF BREMEN BOARD OF EDUCA nON - HARALSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1999

EXHIBIT "D"

Note 7: SIGNIFICANT COMMITMENTS

Project

Unearned Executed Contracts

Parking Lot at H. A. Jones Elementary Renovations, Modifications and HVAC at
Bremen High School Renovations to H. A. Jones Elementary

$ 52,734.00
190,046.10 398,906.52

$ 641.686.62

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

Note 8: CONTINGENT LIABILITIES

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

Note 9: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

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

TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Board who are covered by TRS are required by State statute to contribute 5% oftheir gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.95% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

- 18 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1999

EXHIBIT"D"

Note 9: RETIREMENT PLANS
Fiscal Year
1999 1998 1997

Percentage Contributed
100% 100% 100%

Required Contribution
$ 601,628.15 $ 538,342,90 $ 491,850.01

- 19-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 1999

EXHIBIT "E"

ASSETS Cash and Cash Equivalents Accounts Receivable Inventories
Food Donated Commodities Purchased Food
Total Assets

SCHOOL FOOD
SERVICES FUND

LOTIERY PROGRAMS

FEDERAL PROGRAMS

TOTALS JUNE 30, 1999 JUNE 30, 1998

$ 88,317,15 $ 26,576.10 $ 10,031,52 $ 124,924.77 $ 164,436.17

46,122.49

46,122.49

78,955.53

10,936.03 2,555.37

10,936.03 2,555.37

8,599.02 2,318.99

$ 101,808.55 $ 26,576.10 $ 56,154.01 $ 184,538.66 $ 254,309.71

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Continuation of Federal Programs For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund Equity

$ 6,566.68 $
27,669.56

4,954.26 $
21,106.01 515.83

15,274.79 $
24,028.42 4,350.80

$ 34,236.24 $ 26,576.10 $ 43,654.01 $

26,795.73 $
72,803.99 4,866.63
104,466.35 $

27,169.77 42,368.60
2,692.37
72,230.74

$ 10,936.03
2,555.37
54,080.91 $
$ 67,572.31 $

$ 12,500.00 $

12,500.00 $

92,912.86

0.00

0.00

0.00 $ 12,500.00 $

10,936.03 2,555.37
54,080.91
80,072.31 $

8,599.02 2,318.99
78,248.10
182,078.97

Total Liabilities and Fund Equity

$ 101,808.55 $ 26,576.10 $ 56,154.01 $ 184,538.66 $ 254,309.71

See notes to the general purpose financial statements.

- 20-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30,1999

EXHIBIT "F"

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

FEDERAL PROGRAMS

TOTALS YEAR ENDED JUNE 30, 1999 JUNE 30,1998

REVENUES

State Funds Federal Funds Other Funds

$ 36,258.00 $ 223,466.51

$

173,925,31

$ 605,117.44

247,074.52

259,724,51 $ 779,042,75 247,074.52

274,328.69 573,060.92 220,229.05

Total Revenues

$ 457,257.83 $ 223,466,51 $ 605,117.44 $ 1,285,841.78 $ 1,067,618.66

EXPENDITURES

Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration Maintenance and Operation of Plant Central Support Services Food Services Operation

$ 403,12 $ 172)63.05 $ 457,985.01 $

12,267.88

15,587.57 5,541.66
9,915,30 19,658.93

407.53 230,503.17
1,619.27 10,330.90

468,892.80

631,151.18 $
15,995.10 248,312.71
1,619.27 20,246.20 19,658.93
468,892.80

357,200.98
14,625.44 156,356.70
37,589.16 2,371.62 113.00
379,304.90

Total Expenditures Excess of Revenues over (under) Expenditures

$ 481,563.80 $ 223,466.51 $ 700,845.88 $ 1,405,876.19 $

$ -24,305.97 $

0.00 $ -95,728,44 $ -120,034,41 $

947,561.80 120,056.86

OTHER FINANCING SOURCES (USES)

Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)

$ 960.00 -821.22

$

138.78

$ 1p,315.58 $ $ 15,315.58 $

16,275.58 $ -821.22
15,454.36 $

3,332.93 -11,107.23
-7,774.30

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

$ -24,167.19 $ 89,166.11

0.00 $ -80,412.86 $ -104,580.05 $

0.00

92,912.86

182,078.97

112,282.56 72,879.40

Food Inventory - Net Change in Period Donated Commodities Purchased Food

2,337.01 236.38

2,337.01 236.38

-2,929.67 -153.32

FUND BALANCE JUNE 30

$ 67,572.31 $ _ _-=0';;.00;;.. $ 12,500,00 $ 80,072.31 $ 182,078.97

See notes to the general purpose financial statements.

- 21 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30,1999

ASSETS Cash and Cash Equivalents Accounts Receivable
Total Assets
LIABILITIES AND FUND EQUITY LIABILITIES
Cash Overdraft Accounts Payable Contracts Payable Retainages Payable Due to Other Funds
Total Liabilities FUND EQUITY
Fund Balances Reserved For Purposes of Bond Issue For SPLOST Projects For State Capital Outlay Projects Unreserved Undesignated Total Fund Equity
Total Liabilities and Fund Equity

REGULAR

BOND PROCEEDS

$

16,722.66 $

753,875.38

$

16,722.66 $=== 75= 3,8~75~.38~

$

753,875.38

16,722.66

0.00

$

16,722.66 $ _ _7:.5.3::,:8.:7:5:=..3:8..=~

$=========== $

16,722.66

753,875.38

See notes to the general purpose financial statements.

- 22-

EXHIBIT"G"

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

JUNE 30, 1999

JUNE 30, 1998

$

334,205.61 $ 1,104,803.65 $ 1,892,372.89

$

410,389.00

164,112.74

574,501.74

474,957.85

$

410,389.00 $

498,318.35 $ 1,679,305.39 $ 2,367,330.74

$

328,922.41

$

328,922.41 $

186,136.33

15,830.63

15,830.63

19,496.39

52,149.18 $

175,925.54

228,074.72

194,080.90

2,871.50

27,231.75

30,103.25

69,385.38

10,122.73

$

399,773.72 $

203,157.29 $

602,931.01 $

479,221.73

$

753,875.38 $ 1,717,444.50

$

295,161.06

295,161.06

170,664.51

$

10,615.28

10,615.28

0.00

0.00

16,722.66

0.00

$

10,615.28 $

295,161.06 $ 1,076,374.38 $ 1,888,109.01

$

410,389.00 $

498,318.35 $ 1,679,305.39 $ 2,367,330.74

- 23-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 1999

REVENUES

State Funds Taxes Other Funds

Total Revenues

EXPENDITURES

Current

Support Services

Business Administration

Student Transportation

Capital Outlay

Salaries

~

Employee Benefits

Land and Land Improvements

Building and Building Improvements

Equipment

Debt Service

Principal

Interest

Total Expenditures

Excess of Revenues over (under) Expenditures

OTHER FINANCING SOURCES (USES)

Proceeds from General Obligation Bonds Par Value
Operating Transfers In Operating Transfers Out

Total Other Financing Sources (Uses)

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses

FUND BALANCE JULY 1

REGULAR

BOND PROCEEDS

$

210,508,84 $

$

210,508,84 $

36,880.70 36,880,70

$

10.45

$

16,433.00

193,775.73

4,999.92 1,220.06 12,076.73 383,525.84

8,451.31 1,671.42

$

193,786.18 $

428,378.28

$

16,722.66 $ -391,497.58

$ -572,071.54 $ -572,071.54

$

16,722.66 $ -963,569.12

0.00

1,717,444.50

FUND BALANCE JUNE 30 See notes to the general purpose financial statements.

- 24-

$

16,722.66 $====7=5=3,=87~5=.3=8=

EXHIBIT"H"

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

YEAR ENDED

JUNE 30,1999

JUNE 30,1998

$

7,135.29

$

7,135.29 $

410,389.00

$

525,530.75

525,530.75

170,499.68

9p98.24

256,487.78

99,990.31

$

7,135.29 $

534,628.99 $

789,153.82 $

680,878.99

$

10.45 $

104,978.86

16,433.00

4,999.92

1,220.06

$

1,315.00

13,391.73

516,898.70 $

410,132.44

1,504,332.71

1,366,039.90

50,377.85

50,377.85

46,628.49

8,451.31 1,671.42

7,957.92 2,164.81

$

568,591.55 $

410,132.44 $ 1,600,888.45 $ 1,527,769.98

$

-561,456.26 $

124,496.55 $

-811.7 34.63 $

-846,890.99

$

572,071.54

$

572,071.54

$ 2,735,000.00

$

572,071.54

714,368.95

-572,071.54

-714,368.95

$

0.00 $ 2,735,000.00

$

10,615.28 $

124,496.55 $

-811,734.63 $ 1,888,109.01

0.00

170,664.51

1,888,109.01

0.00

$

10,615.28 $

295,161.06 $ 1,076,374.38 $ 1,888,109.01

- 25-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30,1999

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program 1999 Grant National School Lunch Program 1999 Grant
Total Child Nutrition Cluster
Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services Nutrition Education and Training Program 1999 Grant Food Distribution Program (1) Pass-Through From Office of School Readiness Food and Nutrition Program Child and Adult Care Food Program 1999 Contract
Total U. S. Department of Agriculture
Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education Act Part B - Special Education Capacity Building Improvement 1999 Grant Flow Through 1999 Grant Preschool 1999 Grant
Total Special Education Cluster
Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Comprehensive School Reform Demonstration 1999 Grant Title I Grants to Local Educational Agencies 1999 Grant TItle" Eisenhower Professional Development 1999 Grant Title III Technology Literacy Challenge Fund Grants 1999 Grant

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

10.553 10.555

N/A

$

N/A

$

20,949.83
108,435.98 $ 129,385.81 $

(2) 438,395.96 (3) 438,395.96

10.564

N/A

10.550

N/A

11,711.00 31,456.84

11,711.00 31,456.84

10.558

N/A
$

1,371.66
173,925.31 $

(2) 481,563.80

84.173 84.027 84.173

N/A

$

N/A

N/A

$

6,985.00 $
150,541.34 34,686.34
192,212.68 $

6,985.00 150,541.34
34,686.34 192,212.68

84.332

N/A

84.010

N/A

84.281

N/A

84.318

N/A

- 26-

12,500.00 59,674.76 38,500.00 169,532.00

59,674.76 38,500.00 169,532.00

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 1999

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Education, U, S, Department of Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title VI Innovative Education Program Strategies 1999 Grant Goals 2000 State and Local Education Systemic Improvement Grants 1998 Grant 1999 Grant Stewart B. McKinney Homeless Assistance Act Education for Homeless Children and Youth 1999 Grant Vocational Education - Basic Grants to States High School Program Basic Grant 1999 Grant Tech-Prep Education 1999 Grant
Total U. S. Department of Education

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

84,298

N/A

$

5,232.00 $

5,232.00

84.276

84.276

N/A

84.196

N/A

101,250.00 5,000.00

92,912.86 101,810.12 (3)
5,022.42 (3)

84.048 84.243

N/A N/A
$

16,216.00 5,000.00
605,117.44 $

27,969.38 (3) 7,979.66 (3)
700,845.88

Total Federal Financial Assistance
N/A = Not Available

===-======== $

779,042,75 $

1,182,409.68

Notes to the Schedule of Expenditures of Federal Awards

(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the current fiscal year.
(2) Expenditures for the Child and Adult Care Food Program and the School Breakfast Program were not maintained separately and are included in the 1999 National School Lunch Program.
(3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source.

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

The Board did not provide Federal Assistance to any Subrecipient.

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

See notes to the general purpose financial statements.

- 27-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30,1999

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Quality Basic Education General and Career Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Limited English Speaking Special Instructional Assistance In-School Suspension Counselors Grades 4 and 5 Technology Specialist Local Five Mill Share Educational Equalization Funding Grant Food Services Other State Programs At-Risk Summer School Program Health Insurance Mentor Teacher Program National Teacher Certification Next Generation Schools Preschool Handicapped Program Remedial Summer School Program Student Record Count Lottery Programs Assistive Technology Computers in the Classroom
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement
CONTRACTS Children's Trust Fund of Georgia Family Focused Early Intervention Program
Community Affairs, Georgia Department of Youth Entrepreneur Grant
Transportation, Georgia Department of Paving Project Reimbursement

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$ 3,130,611,00 837,684.00 46,192,00 134,116,00 37,232.00 870,731.00
10,064.00 3,957,00 1,332,00 85,273,00 91,246,00 13,387,00 28,842.00 -367,181,00 453,502,00
$ 36,258.00
2,394,06 78,547,85
324.00 2,317.00 28,388,68 18,232,00 2,187,60 1,032.00
5,517,66 27,597,00
190,351.85
12,455,00

$ 3,130,611.00 837,684.00 46,192,00 134,116,00 37,232.00 870,731.00
10,064.00 3,957.00 1,332.00 85,273.00 91,246.00 13,387.00 28,842.00 -367,181.00 453,502,00 36,258,00
2,394,06 78,547.85
324.00 2,317,00 28,388.68 18,232,00 2,187.60 1,032.00
5,517.66 27,597,00
190,351.85
12,455.00

16,034.75 14,954,74

$ 7,135,29

16,034.75 14,954.74 7,135.29

See notes to the general purpose financial statements.

$ 5,553,855.68 $ 259,724.51 $ 7,135.29 $ 5,820,715.48 -28 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 1999

SCHEDULE "3"

PROJECT
HARALSON COUNTY The addition to and the renovation, repair, acquisition, improvement and equipping of, existing school buildings, the acquisition of system-wide technology, school transportation vehicles and a new media center and the necessary property therefore and for future schools, all at a maximum cost of $4,000,000.00.
CARROLL COUNTY
Funding the acquisition, construction, renovation, extending and equipping of capital outlay projects throughout the Bremen School System, including specifically, but without limitation, renovations, extensions and equipping of facilities at the HA Jones Elementary School to include a new classroom and cafeteria additions and other improvements; at Bremen High School to include a cafeteria extension and other improvements; at Sewell Middle School to include a new science and technology lab and other improvements; and constructing a new physical education facility, including the acquisition of all property, both real and personal, necessary therefor (the "Bremen School Projects"), the maximum cost of such Bremen School Projects not to exceed $2,900,000.00.

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS

$ 4,000,000.00 $ 4,000,000.00 $ 1,051,962.33 $ 1,525,214.87

2,900,000.00 2,900,000.00

410,132.44

106.92

$ 6,900,000.00 $ 6,900,000.00 $ 1,462,094.77 $ 1,525,321.79

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

See notes to the general purpose financial statements.

-29 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY SCHEDULE OF EXPENDITURES LOTIERY PROGRAMS YEAR ENDED JUNE 30,1999

SCHEDULE "4"

EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration Maintenance and Operation of Plant

ASSISTIVE TECHNOLOGY

COMPUTERS INTHE
CLASSROOM

PRE-KINDERGARTEN PROGRAM

TOTAL

$ 27,597.00 $

$

5.517.66

145.681.89 $ 173.278.89

15.071.73 24.00
9,915.30 19.658.93

15,071.73 5.541.66 9.915.30 19,658.93

Total Expenditures

$

5.517.66 $ 27.597.00 $-======-1.9...0....3""'5=1=.8=5 $ 223,466.51

RECAP: Salaries and Benefits Pre-Kindergarten Program Other Expenditures Assistive Technology Computers in the Classroom Pre-Kindergarten Program

$ 168.107.52 5,517.66 27,597.00 22.244.33
$ 223,466.51

See notes to the general purpose financial statements.

-30 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30.1999

SCHEDULE "5"

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

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$

$ _ _ 4,148,603.00

119,564.00 -...:....:...::..l.,;:"';:":';:'::';:"

$

4,566,719.06

154,475.15 $ _ _---1:.2:7~=,.6:2;.6=.;0;0...

$

4,721,194.21

-41,781.94 $ _ _...4..:,..6!.::7::.9:..:,::4l..1..:.2..:..::2=.7:....

$

0.00 $====~0.= 00

See notes to the general purpose financial statements. - 31 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30,1999

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

ALLOTMENTS FROM GEORGIA DEPARTMENT OF

REQUIRED

ORIGINAL

~

ORIGINAL

MID-TERM

$

409,276.00

$

368,348.40 $

838,901.00

755,010.90

$ 1,248,177.00 90 $ 1,123,359.30 $

398,941.00 90

359,046.90

605,015.00 90

544,513.50

466,478.00 90

419,830.20

279,256.00 90

251,330.40

132,744.00 90

119,469.60

$ 3,130,611.00

$ 2,817,549.90 $

0.00 0.00
0.00

$

697,840.00

$

628,056.00 $

0.00

$

697,840.00 90 $

628,056.00 $

0.00

139,844.00 90

125,859.60

$

837,684.00

$

753,915.60 $

0.00

$

46,192.00 90 $

41,572.80 $

0.00

$ 4,014,487.00

$ 3,613,038.30 $

0.00

$

107,326.00 90 $

96,593.40 $

0.00

26,790.00 100

26,790.00

$

134,116.00

$

123,383.40 $

0.00

s 4,148,603.00

s $ 3,736,421.70

0.00

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

$

11,738.00

$

11,738.00 $

0.00

25,494.00

25,494.00

0.00

$

37,232.00 100 $

37,232.00 $ = = = = =0.0=0

- 32 -

SCHEDULE "6"

EDUCATION TOTAL
REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNTOF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$

368,348.40 $

356,498.98 $

5,212.78 $

361,711.76

755,010.90

991,886.44

12,198.57

1,004,085.01

$ 1,123,359.30 $ 1,348,385.42 $

17,411.35 $ 1,365,796.77 $

0.00

359,046.90

555,618.29

3,954.48

559,572.77

0.00

544,513.50

750,301.67

4,119.37

754,421.04

0.00

419,830.20

372,466.14

67,774.83

440,240.97

0.00

251,330.40

388,847.26

9,112.44

397,959.70

0.00

119,469.60

170,378.14

9,708.65

180,086.79

0.00

$ 2,817,549.90 $ 3,585,996.92 $

112,081.12 $ 3,698,078.04

$

628,056.00

$

18,014.62 $ 86,986.93 403,106.80 103,983.76 30,509.64

309.55 $
10,393.21 1,406.87 2,561.19

18,324.17 86,986.93 413,500.01 105,390.63 33,070.83

$

628,056.00 $

642,601.75 $

14,670.82 $

657,272.57

0.00

125,859.60

137,194.53

576.82

137,771.35

0.00

$

753,915.60 $

779,796.28 $

15,247.64 $

795,043.92

$

41,572.80 $

51,877.07 $

297.24 $

52,174.31

0.00

$ 3,613,038.30 $ 4,417,670.27 $

127,626.00 $ 4,545,296.27

$

96,593.40 $

149,048.79

$

149,048.79

0.00

26,790.00

$

26,849.15

26,849.15

0.00

$

123,383.40 $

149,048.79 $

26,849.15 $

175,897.94

$ 3,736,421.70 $ 4,566,719.06 $

154,475.15 $ 4,721,194.21 $

0.00

$

11,738.00

25,494.00

37,232.00

$

32,360.20 $

32,360.20

4,871.80

4,871.80

$

37,232.00 $

37,232.00 $=========0.0=0

- 33 -

SECTIONll COMPLIANCE AND INTERNAL CONTROL REPORTS

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, s.w., Suite 214
Atlanta, Georgia 30334-8400
July 13,2000

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Bremen Board of Education
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of City ofBremen Board of Education as of and for the year ended June 30, 1999, and have issued our report thereon dated July 13, 2000. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general
purpose financial statements. W.e conducted our audit in accordance with generally accepted auditing
standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States.
Compliance
As part of obtaining reasonable assurance about whether City of Bremen Board of Education's financial statements are free ofmaterial misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Re.porting
In planning and performing our audit, we considered City of Bremen Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its
99YB-40

operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in our judgement, could adversely affect City ofBremen Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompanying Schedule ofFindings and Questioned Costs as item FS- 7631-99-01.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, the reportable condition described above is considered to be a material weakness.
This report is intended solely for the information and use of management, members of the City of Bremen Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
~)J~.l.laW..(HJin(tonl()~~ State Auditor
RWH:gp 99YB-40

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
July 13, 2000

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Bremen Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of City of Bremen Board of Education with the types of compliance
u.s. requirements described in the Office ofManagement and Budget (OMB) Circular A-i33 Compliance
Supplement that are applicable to each of its major Federal programs for the year ended June 30, 1999. City of Bremen Board of Education's major Federal programs are identified in the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements oflaws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of City ofBremen Board of Education's management. Our responsibility is to express an opinion on City ofBremen Board ofEducation's compliance based on our audit.
We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and OMB Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the City of Bremen Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on City ofBremen Board of Education's compliance with those requirements.

99SA-55

As described in item FA-763 1-99-03 in the accompanying Schedule of Findings and Questioned Costs, the City ofBremen Board of Education did not comply with requirements regarding Special Tests and Provisions that are applicable to its Food Services - School Breakfast Program and National School Lunch Program. Compliance with such requirements is necessary, in our opinion, for the City of Bremen Board of Education to comply with requirements applicable to those programs.
In our opinion, except for the noncompliance described in the preceding paragraph, the City of Bremen Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 1999.
Internal Control Over Compliance
The management of City of Bremen Board of Education is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered City of Bremen Board ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-B3.
We noted certain matters involving the internal control over compliance and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over compliance that, in our judgement, could adversely affect the City of Bremen Board of Education's ability to administer a major Federal program in accordance with applicable requirements of laws, regulations, contracts and grants. Reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs as items FA-763 1-99-01, FA-763 1-99-02 and FA-763 1-99-03.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level ofrisk that noncompliance with applicable requirements oflaws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, of the reportable conditions described above, we consider item FA-763 1-99-03 to be a material weakness.
99SA-55

This report is intended solely for the information and use of management, members of the City of Bremen Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
tD.U
R ssell W. Hinton State Auditor
RWH:gp 99SA-55

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

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1999

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

7631-93-02 7631-93-04 FS-7631-97-01 FS-7631-98-01 FS-7631-98-02 FS-7631-98-03

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

CORRECTIVE ACTIONIRESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7631-98-03

At this time, the Board does not have adequate resources to establish accounting controls and procedures for the maintenance of a General Fixed Assets Account Group. The Board is awaiting assistance from the Department of Education to remedy this situation.

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FA-7631-98-01

Unresolved - See Corrective ActionlResponses

CORRECTIVE ACTIONIRESPONSES

SPECIAL TESTS AND PROVISIONS Inadequate Internal Controls Finding Control Number: FA-7631-98-01

In fiscal year 1999, policies and procedures were not in place to ensure that accurate USDA commodity inventory records were maintained. However, subsequent to June 30, 1999, this problem should be corrected.

SECTION IV FINDINGS AND QUESTIONED COSTS

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 1999

I SUMMARY OF AUDITOR'S RESULTS

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

2. Reportable Conditions in Internal Control Disclosed by the Audit ofthe Financial Statements The audit report for the City ofBremen Board of Education disclosed a fmancial statement reportable condition related to the following control category.

General Fixed Assets

The reportable condition described above is considered to be a material weakness.

3. Noncompliance Material to the Financial Statements The audit of the City of Bremen Board of Education disclosed no instances of noncompliance that were deemed to be material to the fmancial statements.

4. Reportable Conditions in Internal Control Over Major Programs The audit report for the City ofBremen Board ofEducation disclosed reportable conditions in internal control over major programs for the following compliance requirements.

Cash Management

Special Tests and Provisions

Of the reportable conditions described above, Special Tests and Provisions (FA-7631-99-03) is considered to be a material weakness.

5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the City of Bremen Board of Education's report on compliance with requirements applicable to major programs was qualified.

6. Audit Findings Required to be Re.ported by Section .510(a) ofOMB Circular A-B3 The City of Bremen Board of Education's audit disclosed audit findings required to be reported by section .510(a) ofOMB Circular A-133. These audit findings are included in section IV of this report.

7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program 84.276 Goals 2000 - State and Local Education Systemic Improvement Grants

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

- 1-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30,1999
I SUMMARY OF AUDITOR'S RESULTS
9. Low Risk Auditee The City of Bremen Board of Education did not qualify as a low risk auditee as defined by Section .530 ofOMB Circular A-133.
IT FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-7631-99-01
The City ofBremen Board ofEducation did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general purpose financial statements ofthe Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory ofland, 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.
Management's Response:
We concur with this finding; however, due to current budgetary and staffing limitations the Board has decided not to pursue the recording of general fixed assets on financial statements.
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
CASH MANAGEMENT Excessive Cash Balances Reportable Condition Nonmaterial Noncompliance U. S. Department of Education Through Georgia Department of Education Amount: $2,565.23 Finding Control Number: FA-7631-99-01
A review of cash management procedures and internal controls for the Goals 2000, State and Local Education Systemic Improvement Grants (CFDA 84.276) disclosed that cash draws utilizing DE form 0147, "Quarterly Report of Expenditures and Estimated Requirement for Grant Funds", were made in advance of immediate
-2-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1999
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
CASH MANAGEMENT Excessive Cash Balances Reportable Condition Nonmaterial Noncompliance U. S. Department of Education Through Georgia Department of Education Amount: $2,565.23 Finding Control Number: FA-7631-99-01
cash needs, resulting in the accumulation ofexcessive cash balances. During fiscal year 1999, the Goals 2000 programs had an average cash balance of$33,535.53 with excessive monthly cash balances in eleven months.
In accordance with A-102 Common rule paragraph 21(h)2(I), interest earned on advances by local government grantees is required to be submitted promptly to the Federal grantor agency. Up to $100 per year may be kept for administrative expenses. The Goals 2000 program (CFDA 84.276) earned interest amounting to $2,665.23 of which $2,565,23 should have been submitted to the Georgia Department of Education. The interest earned on this program's funds were recorded in the Board's General Fund.
Management should become familiar with the Federal regulations for the Goals 2000 program in order to develop adequate control procedures designed to provide for the achievement of compliance objectives. In addition, excessive interest earning totaling $2,565.23 should be refunded to the Georgia Department of Education.
Management's Response:
We concur with this finding. This finding will be resolved with the return of $2,565,23 to the Georgia Department of Education and future controls will be initiated to be sure that monthly cash balances and projected needs will be more accurately projected before the acquisition of funds.
SPECIAL TESTS AND PROVISIONS Inadequate Internal Controls Reportable Condition Repeated From Prior Year U. S. Department of Agriculture Through Georgia Department of Education Finding Control Number: FA-7631-99-02
There were no controls in place to identify, report or account for donated commodities food inventory losses for the Food Services - School Breakfast Program (CFDA 10,553) or the National School Lunch Program (CFDA 10.555). According to 7 CPR section 250.16, accurate and complete records shall be maintained with respect to receipt, distribution/use and inventory of donated foods. Tests performed on donated commodities
-3-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 1999
ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
SPECIAL TESTS AND PROVISIONS Inadequate Internal Controls Reportable Condition Repeated From Prior Year U. S. Department of Agriculture Through Georgia Department of Education Finding Control Number: FA-7631-99-02
activity records, revealed that no reconciliation of food usage is made between meal production records and periodic inventory counts.
Management should familiarize themselves with Federal regulations dealing with the Child Nutrition Cluster program in order to develop an adequate internal control structure consisting of procedures designed to provide for the achievement of compliance objectives.
Management's Response:
We concur with this finding. Appropriate procedures have been developed and the food service director and principal have been directed to ensure that the food service staff follows those procedures.
SPECIAL TESTS AND PROVISIONS Failure to Document Verification Process Reportable Condition - Material Weakness Material Noncompliance U. S. Department of Agriculture Through Georgia Department of Education Finding Control Number: FA-7631-99-03
An examination of free and reduced price meal applications for the School Breakfast Program (CFDA 10.553) and the National School Lunch Program (CFDA 10.555) revealed that the Board could not document that verification procedures were performed on approved applications as required by the U. S. Department of Agriculture's "Eligibility Guidance for School Meals" manual and 7 CFR 245.6a.
This deficiency was the result of management's failure to properly manage and document the verification process. Procedures should be implemented to ensure that verification procedures are performed in accordance with the aforementioned Federal regulations. The Georgia Department of Education should review this matter to determine if a reclaim of funds is appropriate.
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CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1999
ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS SPECIAL TESTS AND PROVISIONS Failure to Document Verification Process Reportable Condition - Material Weakness Material Noncompliance U. S. Department of Agriculture Through Georgia Department of Education Finding Control Number: FA-7631-99-03 Management's Response: We concur with this finding. Appropriate procedures have been developed and adequate personnel have been hired to ensure that proper verification of free and reduced meal applications are performed in accordance with Federal regulations.
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