City of Bremen Board of Education, Haralson County, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2008

CITY OF BREMEN BOARD OF EDUCATION HARALSON COUNTY, GEORGIA REPORT ON AUDIT OF THE FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2008
STATE OF GEORGIA
DEPARTMENT OF AUDITS AND ACCOUNTS
Russell W. Hinton State Auditor

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

SECTION I

FINANCIAL

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

REQUIRED SUPPLEMENTARY INFORMATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

EXHIBITS

BASIC FINANCIAL STATEMENTS

DISTRICT-WIDE FINANCIAL STATEMENTS

A

STATEMENT OF NET ASSETS

1

B

STATEMENT OF ACTIVITIES

2

FUND FINANCIAL STATEMENTS

C

BALANCE SHEET

GOVERNMENTAL FUNDS

4

D

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET ASSETS

5

E

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES

GOVERNMENTAL FUNDS

6

F

RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT

OF REVENUES, EXPENDITURES AND CHANGES IN FUND

BALANCES TO THE STATEMENT OF ACTIVITIES

7

G

STATEMENT OF FIDUCIARY NET ASSETS

FIDUCIARY FUNDS

9

H

NOTES TO THE BASIC FINANCIAL STATEMENTS

10

SCHEDULES

REQUIRED SUPPLEMENTARY INFORMATION

1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES - BUDGET AND ACTUAL

GENERAL FUND

27

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

SECTION I

FINANCIAL

SCHEDULES

SUPPLEMENTARY INFORMATION

2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

28

3 SCHEDULE OF STATE REVENUE

29

4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

30

5 ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

BY PROGRAM

33

SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATIERS 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 ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133

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

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

SECTION I FINANCIAL

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
April 29, 2009

Honorable Sonny Perdue, Governor Members ofthe General Assembly Members of the State Board of Education
and Superintendent and Members ofthe City of Bremen Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying financial statements ofthe governmental activities, each major fund, and the aggregate remaining fund information (Exhibits A through H) ofthe City of Bremen Board of Education, as of and for the year ended June 30, 2008, which collectively comprise the Board's basic financial statements of the Board's primary government as listed in the table of contents. These financial statements are the responsibility of the City of Bremen Board of Education's management. Our responsibility is to express opinions on these financial statements based on our audit.
Except as discussed in the following paragraph, we conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City of Bremen Board of Education's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 opm1ons.

2008ARL-25X

The financial statements of Bremen Educational Foundation, Inc. (Foundation) have not been audited, and we were not engaged to audit the Foundation's financial statements as part of our audit ofthe School District's basic financial statements. The Foundation's financial activities are included in the School District's basic financial statements as a discretely presented component unit.
Because the Foundation's financial statements have not been audited, the scope ofour work was not sufficient to enable us to express, and we do not express, an opinion on the financial statements of the Foundation as of and for the year ended June 30, 2008.
In addition, in our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information for the City of Bremen Board of Education, as of June 30, 2008, and the respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated April 29, 2009, on our consideration of the City of Bremen Board of Education's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose ofthat report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.
Management's Discussion and Analysis and the Schedule ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on pages i through x and page 27 respectively, are not a required part ofthe basic financial statements but are supplementary information required by the accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods ofmeasurement and presentation ofthe required supplementary information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Bremen Board of Education's basic financial statements. The accompanying supplementary information which consist of Schedules 2 through 5, 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 basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements, and in our opinion, except for the matters discussed in the third paragraph on which we express no opinion, such information, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.
2008ARL-25X

A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated section 50-6-24.
Respectfully submitted,

RWH:as 2008ARL-25X

~vJ-~~-
Russell W. Hinton, CPA, CGFM
State Auditor

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2008

INTRODUCTION
The School District's financial statements for the fiscal year ended June 30, 2008, includes a series of basic financial statements that report financial information for the School District as a whole, its funds, and its fiduciary responsibilities. The Statement of Net Assets and the Statement of Activities provide financial information about all of the School District's activities and present both a short-term and long-term view of the School District's finances on a global basis. The fund financial statements provide information about all of the School District's funds. Information about these funds, such as the School District's General Fund, is important in its own right, but will also give insight into the School District's overall soundness as reported in the Statement ofNet Assets and the Statement of Activities.
FINANCIAL HIGHLIGHTS
Key financial highlights for fiscal year 2008 are as follows:
On the District-wide financial statements:
District-wide net assets at June 30, 2008, were $19.0 million. Net assets reflect the difference between all assets of the School District (including capital assets, net of depreciation) and all liabilities, both short-term and long-term. The net assets at June 30, 2008, of $19.0 million represented an increase of $4.5 million in net assets when compared to the prior year.
The School District had almost $17.3 million in expenses relating to governmental activities; approximately $15.0 million of these expenses were offset by program specific charges for services, grants and contributions. However, general revenues (primarily property and sales taxes) of $6.8 million were adequate to provide for these programs.
As stated above, general revenues accounted for $6.8 million or about 31 % of all revenues totaling $21.8 million. Program specific revenues in the form of charges for services, grants, and contributions accounted for the balance of these revenues.

Source of Revenues

Gereral Revenue Property Taxes 123%

General Reveooe All Other 9.7%
- 1-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2008
The School District increased its outstanding bond debt $6.0 million through the sale of general obligation bonds for the purpose of Capital Outlay. This debt will be retired in part from a Special Option Local Sales Tax that was approved by the citizenry in conjunction with the Bond Sale.
On the Governmental Fund Statements:
The General Fund unreserved fund balance of about $2.6 million at June 30, 2008, increased about $100,000.00 from the prior year.
OVERVIEW OF THE FINANCIAL STATEMENTS
These financial statements consists of three parts; management's discussion and analysis (this section), the basic financial statements including notes to the financial statements and required supplementary information. The basic financial statements include two levels of statements that present different views ofthe School District. These include the District-wide and fund financial statements.
The District-wide financial statements include the 'Statement of Net Assets' and 'Statement of Activities'. These statements provide information about the activities of the School District presenting both short-term and long-term information about the School District's overall financial status.
The fund financial statements focus on individual parts of the School District, reporting the School District's operation in more detail. The 'Governmental Funds' statements disclose how basic services are financed in the short-term as well as what remains for future spending. The 'Fiduciary Funds' statements provide information about the financial relationships in which the School District acts solely as a trustee or agent for the benefit of others. In the case ofthe City of Bremen School District, the General Fund, Capital Projects Funds, and Debt Service Funds are all considered to be major funds. The School District has no nonmajor funds as defined by GASB Statement 34 for the purposes ofthis report.
The financial statements also include notes that explain some of the information in the statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and supports the financial statements. Additionally, other supplementary information (not required) is also presented that further supplements understanding of the financial statements.
District-wide Statements
Since City of Bremen School District has no operations that have been classified as "Business Activities", the District-wide financial statements are basically a consolidation of all of the School District's operating funds into one column called governmental activities. In reviewing the District-wide financial statements, a reader might ask the question, are we in a better financial position now than last year? The 'Statement of Net Assets' and the 'Statement of
-11-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2008
Activities' provides the basis for answering this question. These financial statements include all School District's assets and liabilities and uses the accrual basis of accounting similar to the accounting used by most private-sector companies. This basis of accounting takes into account all of the current year's revenues and expenses regardless of when cash is received or paid.
These two statements report the School District's net assets and any changes in those assets. The change in net assets is important because it tells the reader that, for the School District as a whole, the financial position of the School District has improved or diminished. The causes of this change may be the results of many factors, including those not under the School District's controi such as the property tax base, facility conditions, required educational programs, studeut-teacher ratios, and other factors.
When analyzing District-wide financial statements, it is important to remember these statements are prepared using an economic resources measurement focus (accrual accounting) and involve the following steps to format the Statement ofNet Assets:
Capitalize current outlays for capital assets Depreciate capital assets Report long-term debt as a liability Calculate revenue and expense using the economic resources measurement focus and the
accrual basis of accounting Allocate net assets as follows:
o Net Assets invested in capital assets, net ofrelated debt o Restricted net assets are those with constraints placed on the use by external
sources such as creditors, grantors, contributors or laws and regulations. o Unrestricted net assets are net assets that do not meet any of the above
restrictions.
Fund Financial Statements
The School District uses many funds or subfunds to account for a multitude of financial transactions during the fiscal year. The fund financial statements presented in this report provide detail information about the School District's significant or major funds. As discussed previously, the School District has no nonmajor funds as defined by generally accepted accounting principles.
The School District has two kinds of funds as discussed below:
Governmental Funds - Most of the School District's activities are reported in governmental funds, which focus on how money flows into and out ofthose funds and the balances left at yearend available for spending in future periods. These funds are reported using the modified accrual method of accounting which measures cash and all other financial assets that can be readily be converted to cash. The governmental fund statements provide a detailed short-term
- 111 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2008
view of the School District's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance educational programs. The differences between government activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental funds are reconciled in the financial statements.
Fiduciary Funds - The School District is the trustee, or fiduciary, for assets that belong to clubs, organizations and others within the principals' accounts. The School District is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. The School District excludes these activities from the Districtwide financial statements because it cannot use these assets to finance its operations.
FINANCIAL ANALYSIS OF THE SCHOOL DISTRICT AS A WHOLE
Net assets, which is the difference between total assets and total liabilities, is one indicator ofthe financial condition of the School District. When revenues exceed expenses, the result is an increase in net assets. When expenses exceed revenues, the result is a decrease in net assets. The relationship between revenues and expenses can be thought of as the School District's operating results. The School District's net assets, as measured in the Statement ofNet Assets, can be one way to measure the School District's financial health, or financial position Over time, increases or decreases in the School District's net assets - as measured in the Statement of Activities - are one indicator of whether its financial health is improving or deteriorating. However, the School District's goal and mission is to provide success for each child's education, not to generate profits as private corporations do. For this reason, many other nonfinancial factors should be considered in assessing the overall health ofthe School District.
In the case of the City of Bremen School District, assets exceeded liabilities by $19.0 million at June 30, 2008. To better understand the School District's actual financial position and ability to deliver services in future periods, it is necessary to review the various components of the net asset category. For example, of the $19 million of net assets, about $1.4 million was restricted for bus replacement, continuation of Federal programs, debt service, and capital projects. Accordingly, these funds were not available to meet the School District's ongoing obligations to citizens and creditors.
In addition, the School District also had $15.7 million invested in capital assets (net of related debt e.g., land, buildings, and equipment). The School District uses these capital assets to provide educational services to students within geographic boundaries served by the School District. Because of the very nature and on-going use of the assets being reported in this component of net assets, it must be recognized that this portion of the net assets is not available for future spending.
The remaining balance of unrestricted net assets of$1.9 million may be used to meet the School District's ongoing obligations to citizens and creditors.
- iv -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Table 1 provides a summary of the School District's net assets for this fiscal year as compared to the prior fiscal year.

Table 1 Net Assets

Governmental Activities

Fiscal

Fiscal

Year 2008

Year 2007

Assets Current and Other Assets Capital Assets, Net

$ 8,080,176 $ 9,835,213

27,419,133

13,800,071

Total Assets

$ 35,499,309 $ 23,635,284

Liabilities Current and Other Liabilities Long-Term Liabilities

$ 3,886,075 $ 2,553,950

12,600,000

6,600,000

Total Liabilities

$ 16,486,075 $ 9,153,950

Net Assets Invested in Capital Assets, Net of Related Debt Restricted Unrestricted

$ 15,707,863 1,418,319 1,887,052

$ 9,634,418 2,186,075 2,660,841

Total Net Assets

$ 19,013,234 $ 14,481,334

Net current assets increased $4.5 million in fiscal year 2008. This change in net assets is supported by Table 2 as presented below:

Table 2 shows the Changes in Net Assets for this fiscal year as compared to the prior fiscal year.

-v-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2008

Table 2 Change in Net Assets

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

Governmental Activities

Fiscal

Fiscal

Year 2008

Year 2007

$ 1,259,634 10,249,061 3,466,925

$ 1,216,111 9,641,985
700,087

Total Program Revenues

$ 14,975,620 $ 11,558,183

General Revenues:

Taxes

Property Taxes

For Maintenance and Operations

$

Sales Taxes

Special Purpose Local Option Sales Tax

For Debt Service

For Capital Projects

Grants and Contributions not Restricted to

Specific Programs

Investment Earnings

Miscellaneous

2,691,988
927,255 1,098,145
1,063,462 455,757 596,973

$ 2,521,808
1,965,535
1,045,031 327,064 589,681

Total General Revenues

$ 6,833,580 $ 6,449,119

Total Revenues

$ 21,809,200 $ 18,007,302

Program Expenses Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services
General Administration School Administration Business Administration Maintenance and OJ?eration of Plant Student Transportation Services
Central Support Services Other Support Services Operations ofNon-Instructional Services
Enterprise Operations Food Services
Community Services Interest on Short-Term and Long-Term Debt

$ 10,925,898
587,939 411,474 246,809 358,124 893,806 123,205 1,885,386 158,511
9,037 73,371
416,235 676,781
3,891 506,833

$ 10,184,335
470,085 269,578 230,535 312,408 876,306 176,992 907,468 203,621
26,620 78,876
270,941 683,532 215,411 208,476

Total Expenses

$ 17,277,300 $ 15,115,184

Increase in Net Assets

$ 4.531.900 $ 2.892.118

- vi-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2008

The increase in expenses for maintenance and operation for fiscal year 2008 compared to the prior year occurred because certain capital outlay costs for the new middle school and high school renovation did not reach the School District's threshold for capitalization and as a result were charged to maintenance and operation expenses. Additionally, for fiscal year 2008, the School District charged certain cost associated with the School District's After School Program to Enterprise Operations. These After School costs were charged to community services in the prior year, which accounts for the decrease in current year community services and increase in enterprise operations as compared to the prior year.

Cost of Providing Services

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

Table3 Governmental Activities

Total Cost of Services

Fiscal

Fiscal

Year 2008 Year 2007

Net Cost ofServices

Fiscal

Fiscal

Year 2008 Year 2007

Instruction

$ 10,925,898 $ 10,184,335 $ -546,722 $ 1,758,290

Support Services

Pupil Services

587,939

470,085

439,224

329,195

hnprovement ofInstructional Services

411,474

269,578

189,847

146,268

Educational Media Services

246,809

230,535

22,958

23,631

General Administration

358,124

312,408 -223,260 -166,397

School Administration

893,806

876,306

382,109

397,388

Business Administration

123,205

176,992

120,353

174,558

Maintenance and Operation ofPlant

1,885,386

907,468 1,306,559

376,633

Student Transportation Services

158,511

203,621

141,886

62,726

Central Support Services

9,037

26,621

9,037

26,620

Other Support Services

73,371

78,876

72,212

78,048

Operations ofNon-Instructional Services

Enterprise Operations

416,235

270,941

84,052

130,617

Food Services

676,781

683,531 -207,299

-13,281

Community Services

3,891

215,411

3,891

24,229

Interest on Short-Term and Long-Term Debt

506,833

208,476

506,833

208,476

Total Expenses

$ 17.277.300 $ 15,115.184 $ 2,301.680 $ 3,557.001

The table above indicates that the net costs ofproviding services decreased in fiscal year 2008 as compared to the prior fiscal year. However, the reader should remember that in fiscal year 2008 almost $3.5 million of capital grants revenue was reported and allocated against expenses compared to only $700,000 in the prior fiscal year. This increase of capital outlay funding in fiscal year 2008 blurs the comparability of the net costs of providing services on a year to year basis.

-vu-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2008
FINANCIAL ANALYSIS OF THE SCHOOL DISTRICT'S FUNDS
Information about the School District's governmental funds is presented starting on Exhibit "C" of this report. Governmental funds are accounted for using the modified accrual basis of accounting. The governmental funds had total revenues of$21.8 million and total expenditures ofalmost $31.5 million in fiscal year 2008. Additionally, the School District sold $6.0 million in General Obligation Debt and incurred another $0.6 million in Capital Lease debt during the fiscal year. Total governmental fund balances of $4.1 million at June 30, 2008, decreased $3.1 million from the prior year. This decrease in fund balance occurred primarily because the School District made significant expenditures for capital outlay purposes that was funded, in part, from reserves accumulated in prior years.
General Fund Budget Highlights
The School District's budget is prepared according to Georgia Law. The most significant budgeted fund is the General Fund. During the course of fiscal year 2008, the School District amended its general fund budget as needed.
The School District budget is adopted at the aggregate level and maintained at the program, function, object, and site levels to facilitate budgetary control. The budgeting systems are designed to control the total budget, but provide flexibility to meet the ongoing programmatic needs. The budgeting systems are also designed to control total site budgets but provide flexibility for site management as well.
For the General Fund, the final actual revenues of $15.9 million were over the final budgeted amount of $14.4 million by $1.5 million. This difference (final actual vs. final budget) was primarily attributable to revenues for State Funds over final budget of $351,417, revenues for charges for services over final budget of$331,383, and miscellaneous revenues over final budget of$531,163. The School District traditionally estimates revenue on a conservative basis to avoid shortfalls in actual revenues. Additionally, the School District did not include revenues for school activity accounts (included in miscellaneous revenues) in the final budget.
The General Fund's final actual expenditures of$16.0 million exceeded the final budget amount of almost $14.3 million by $1.7 million. This difference (final actual vs. final budget) was primarily attributable to actual expenditures for instruction exceeding the final budget of $564,689, and the fact that expenditures for enterprise operations of $416,234 and expenditures for capital outlay of$516,207 were not included in the School District's final budget.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
At fiscal year ended June 30, 2008, the School District had $27.4 million invested in capital assets, net of accumulated depreciation, all in governmental activities. These assets are made up of a broad range of items including buildings; land; land improvements; and food service,
- vm -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2008

transportation and maintenance equipment. This year's additions (net of depreciation) totaled $13.6 million and were primarily expended on the School District's new Middle School which will open in fiscal year 2009.

Table 4 reflects a summary of these balances, net of accumulated depreciation, as compared to the prior fiscal year.

Table4 Capital Assets (Net of Depreciation)

Governmental Activities

Fiscal

Fiscal

Year 2008

Year 2007

Land Construction in Progress Land Improvements Buildings and Improvements Equipment

$ 1,525,903 17,203,249 49,155 8,394,832 245,994

$ 1,009,996 3,891,100 52,589 8,579,037 267,349

Total

$ 27.419.133 $ 13.800.071

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

Long-Term Debt

At June 30, 2008, the School District had $12.6 million in total debt outstanding which consisted of $12.0 million in general obligation bond debt and $600,000 in capital lease debt. Table 5 summarizes the School District's debt as compared to the prior fiscal year.

Table5 Debt at June 30

Governmental Activities

Fiscal

Fiscal

Year 2008

Year 2007

Bonds Payable Capital Leases

$ 12,000,000 $ 6,600,000 600,000

Total

$ 12.600.000 $ 6.600.000

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

- ix-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2008
FACTORS BEARING ON THE SCHOOL DISTRICT'S FUTURE
Currently known circumstances that are expected to have a significant effect on financial position or results ofoperations in future years are as follows:
The School District is financially stable. The School District's current operating millage is 12.95, which produces approximately $193,380 per mill. The School District continues to grow with an average of 84 students per year over the last three years. The School District has just completed a new Middle School and made significant renovations at the High School. The School District does not have immediate plans for any significant capital outlay projects.
The School District is financially challenged by the State's continuing reduction of revenue estimates and subsequent reduction of state revenue appropriations to local school districts. In August 2008, the State informed local school districts of funding cuts; the final amount of these funding reductions may not be known until June 2009, the last month of the fiscal year. The fiscal year 2010 state funding level for local school districts also may not be known until June 2009, while contracts for fiscal year 2010 must be offered to certified employees by April 15th 2009. The ongoing concern is that State funding may be further reduced after the fiscal year 2010 begins, budgets are in place, teacher contracts signed and local ad valorem taxes have been levied. The School District will continue to be a good steward of tax dollars while providing a quality educational experience for students.
The School District will continue to face challenges from the implementation of the A+ Education Reform Act, which mandates lower teacher to student ratios. The School District will also continue to be impacted by the remedial actions required for under performing schools under the No Child Left Behind Act. In the midst ofthese challenges, the School District remains confident in the ability to maximize resources to provide the best possible educational experience for all ofour students.
CONTACTING THE SCHOOL DISTRICT'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, investors and creditors with a general overview of the School District's finances and to show the School District's accountability for the money it receives. If you have questions about this report or need additional financial information, contact Dr. Stanley McCain, Superintendent, City of Bremen Board of Education, 504 Laurel Street, Bremen, Georgia 30110. You may also email your questions to Dr. McCain at stanley.mccain@bremencs.com
-x-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY STATEMENT OF NET ASSETS JUNE 30, 2008

EXHIBIT"A"

Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Inventories Capital Assets Land Construction in Progress Land Improvements Buildings Equipment Less: Accumulated Depreciation
Total Assets
LIABILITIES
Accounts Payable Salaries and Benefits Payable Short-Term Debt Contracts Payable Retainages Payable Deferred Revenue Long-Term Liabilities
Due Within One Year Due in More Than One Year
Total Liabilities
NET ASSETS
Invested in Capital Assets, Net of Related Debt Restricted for
Bus Replacement Continuation of Federal Programs Debt Service Capital Projects Unrestricted Governmental Activities Bremen Educational Foundation, Inc.
Total Net Assets
Total Liabilities and Net Assets

PRIMARY GOVERNMENT GOVERNMENTAL
ACTIVITIES

COMPONENT UNIT BREMEN
EDUCATIONAL FOUNDATION, INC.

$

5,256,197.58 $

1,000,000.00

494,474.66 1,209,252.14
95,152.00 25,099.87

1,525,903.00 17,203,248.82
120,084.00 11,020,081.00
565,461.00 -3 015 645.00

128,620.00 1,154,560.00

$

35.499,309.07 $ ====1.2.8.=3=1=8=0=.o=o

$

1,257.41

1,772,588.76

545,000.00

773,253.05

752,467.44

41,508.00

676,000.00 11,924,000.00

$

16 486 074.66

$

15,707,862.73

11,154.00 145,992.80 844,223.13 416,949.68

1,887,052.07 $

$

19,013,234.41 $

1,283,180.00 1,283,180.00

$ 35,499,309.07 $

1 283 180.00

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

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2008

GOVERNMENTAL ACTIVITIES
Instruction Support Services
Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Operations of Non-Instructional Services Enterprise Operations Community Services Food Services Interest on Short-Term and Long-Term Debt
Total Governmental Activities
COMPONENT UNIT
Bremen Educational Foundation, Inc.
General Revenues Taxes Property Taxes For Maintenance and Operations Sales Taxes Special Purpose Local Option Sales Tax For Capital Projects For Debt Service Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous
Total General Revenues
Change in Net Assets
Net Assets - Beginning of Year
Net Assets - End of Year

EXPENSES

CHARGES FOR SERVICES

$ 10,925,898.16 $
587,939.44 411,474.42 246,809.03 358,123.63 893,805.59 123,204.68 1,885,385.98 158,511.35
9,036.62 73,370.87
416,234.67 3,891.13
676,781.42 506,833.09
$ 17 277 300.08 $

541,390.41
332,182.13 386,061.43 1,259,633.97

$ ===1=3=7=4=1.=00=

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

EXHIBIT"B"

PROGRAM REVENUES

OPERATING

CAPITAL

GRANTS AND

GRANTS AND

CONTRIBUTIONS CONTRIBUTIONS

NET(EXPENSES)REVENUES

AND CHANGES IN NET ASSETS

PRIMARY

COMPONENT UNIT

GOVERNMENT

BREMEN

GOVERNMENTAL

EDUCATIONAL

ACTIVITIES

FOUNDATION, INC.

$

7,780,113.73 $

148,715.17 221,627.83 223,850.51 480,428.18 496,339.41
2,852.03 546,111.28
13,523.73

1,158.70

334,340.83 $ 10,249,061.40 $

3,151,116.46 $
100,955.49 15,356.94 32,715.50 3,102.00
163,678.41 3,466,924.80 $

546,722.44
-439,224.27 -189,846.59
-22,958.52 223,260.04 -382, 109.24 -120,352.65 -1,306,559.20 -141,885.62
-9,036.62 -72,212.17
-84,052.54 -3,891.13
207,299.25 -506,833.09
-2,301,679.91

$

-13,741.00

$

2,691,987.69

1,098,144.73 927,255.50
1,063,462.00 455,756.57 $ 596,973.22

$

6,833,579.71 $

$

4,531,899.80 $

14 481 334.61

65,463.86 11 335.00
76 798.86 63,057.86
1,220,122.14

$ 19,013,234.41 $ ===1=,2=8=3"=1'=80==00=

-3-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30, 2008

EXHIBIT"C"

ASSETS
Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Inventories
Total Assets
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts Payable Salaries and Benefits Payable Short-Term Debt Contracts Payable Retainages Payable Deferred Revenue
Total Liabilities
FUND BALANCES
Reserved for Bus Replacement Continuation of Federal Programs Debt Service Capital Projects
Unreserved Designated for Student Activities Undesignated Reported in: General Fund
Total Fund Balances
Total Liabilities and Fund Balances

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTAL

$ 2,130,363.57 $ 3,122,417.24 $
1,000,000.00

3,416.77 $

5,256,197.58 1,000,000.00

86,508.64 1,209,252.14
95,152.00 25,099.87

351,601.11

438,109.75 1,209,252.14
95,152.00 25,099.87

$ 4,546,376.22 $ 3,474,018.35 $ 3 416.77 $ 8,023,811.34

$

1,257.41

1,772,588.76

$

41 508.00

545,000.00 773,253.05 752,467.44

$ 1,815,354.17 $ 2,070,720.49

$

1,257.41

1,772,588.76

545,000.00

773,253.05

752,467.44

41 508.00

$ 3,886,074.66

$

11,154.00

$

145,992.80

$ 840,806.36 $ 3,416.77

562,491.50

11,154.00 145,992.80 844,223.13 562,491.50

244,593.87

244,593.87

2,329,281.38

2,329,281.38

$ 2,731,022.05 $ 1,403,297.86 $ 3 416.77 $ 4,137,736.68

$ 4,546,376.22$ 3,474,018.35$ 3416.77 $ 8,023,811.34

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

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS JUNE 30, 2008

EXHIBIT"D"

Total Fund Balances - Governmental Funds (Exhibit "C")
Amounts reported for Governmental Activities in the Statement of Net Assets are different because:
Capital Assets used in Governmental Activities are not financial resources and therefore are not reported in the funds. These assets consist of:
Land Construction in Progress Land Improvements Buildings Equipment Accumulated Depreciation
Total Capital Assets
Some of the School District's property tax revenues will be collected after year-end but are not available soon enough to pay for the current period's expenditures.
Long-Term Liabilities, including Bonds Payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. Long-Term Liabilities at year-end consist of:
Bonds Payable Capital Leases
Total Long-Term Liabilities
Net Assets of Governmental Activities (Exhibit "A")

$ 4,137,736.68

$ 1,525,903.00 17,203,248.82 120,084.00 11,020,081.00 565,461.00 -3,015,645.00

27,419,132.82

56,364.91

$ -12,000,000.00 -600,000.00

-12,600,000.00

$ 19,013,234.41

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

CITY OF BREMEN BOARD OF EDUCATION- HARALSON COUNTY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2008

EXHIBIT "E"

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Enterprise Operations Community Services Food Services Operation
Capital Outlay Debt Services
Principal Dues and Fees Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Proceeds of Long-Term Capital Related Debt Capital Leases
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning
Fund Balances - Ending

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTAL

$ 2,690,609.42 $
10,505,511.57 810,113.83
1,259,633.97 134,073.60 581 163.61

1,098,144.73 $
3,463,822.80
319,694.51 15,809.61

$
927,255.50
1,988.46

2,690,609.42 2,025,400.23 13,969,334.37
810,113.83 1,259,633.97
455,756.57 596,973.22

$ 15,981,106.00 $ 4,897,471.65 $ 929,243.96 $ 21,807,821.61

$ 10,738,558.16

$ 10,738,558.16

587,939.44

411,474.42

246,809.03

351,958.27 $

163.36

892,892.59

121,204.68

2,000.00

866,509.76

14,702.98

129,474.35

9,036.62

73,370.87

416,234.67

3,891.13

667,050.42

516,207.00 14,340,051.06

587,939.44 411,474.42 246,809.03 352,121.63 892,892.59 123,204.68 881,212.74 129,474.35
9,036.62 73,370.87 416,234.67
3,891.13 667,050.42 14,856,258.06

$
61,915.00

600,000.00 444,918.09

600,000.00 61,915.00
444 918.09

$ 16,032,611.41 $ 14,418,832.40 $ 1,044,918.09 $ 31,496,361.90

$ -51 505.41 $ -9,521,360. 75 $ -115 674.13 $ -9,688,540.29

$ 6,000,000.00
600,000.00

$ 6,000,000.00
600,000.00

$ 6,600,000.00

$ 6,600,000.00

$ -51,505.41 $ -2,921,360. 75 $ -115,674.13 $ -3,088,540.29

2,782,527.46

4,324,658.61

119,090.90

7,226,276.97

$ 2,731,022.05 $ 1,403,297.86 $

3 416.77 $ 4,137,736.68

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

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2008

EXHIBIT "F"

Total Net Change in Fund Balances - Governmental Funds (Exhibit "E")
Amounts reported for Governmental Activities in the Statement of Activities are different because:
Capital Outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activities, the cost of Capital Assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are:
Capital Outlay Depreciation Expense
Excess of Capital Outlay over Depreciation Expense
Because some property taxes will not be collected for several months after the School District's fiscal year ends, they are not considered "available" revenues.
Bond proceeds and capital lease issuance provide current financial resources to Governmental Funds; however, issuing debt increase Long-Term Liabilities in the Statement of Net Assets. In the current period, proceeds were received from:
General Obligation Bonds Issued Capital Lease Issuance
Total Proceeds
Repayment of Long-Term Debt is reported as an expenditure in Governmental Funds, but the repayment reduces Long-Term Liabilities in the Statement of Net Assets. In the current year, these amounts consist of:
Bond Principal Retirements
Change in Net Assets of Governmental Activities (Exhibit "B")

$ -3,088,540.29

$ 13,854,029.82 -234,968.00

13,619,061.82

1,378.27

$ -6,000,000.00 -600,000.00

-6,600,000.00

600,000.00 $ 4,531,899.80

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

{This page left intentionally blank)

CITY OF BREMEN BOARD OF EDUCATION- HARALSON COUNTY STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30, 2008

EXHIBIT "G"

ASSETS Cash and Cash Equivalents
LIABILITIES Funds Held for Others

AGENCY FUNDS
$

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

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2008

EXHIBIT "H"

Note 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY
REPORTING ENTITY
The City of Bremen Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity.
DISCRETELY PRESENTED COMPONENT UNIT
The Bremen Educational Foundation, Inc. is a non-profit organization established in 2001 as a permanent endowment created by alumni and supporters of the Bremen City School District to support the tradition of excellence in the system. The purpose of the Foundation is to improve the quality of education in the system and act a fiscal agent for donors who wish to sponsor approved projects for the system, its teachers and students. (See Note "16")
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The School District's basic financial statements are collectively comprised of the District-wide financial statements, fund financial statements and notes to the basic financial statements of the City of Bremen Board of Education.
District-wide Statements: The Statement of Net Assets and the Statement of Activities display information about the financial activities of the overall School District, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions.
The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities.
Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the School District related to the administration and support of the School District's programs, such as office and maintenance personnel and accounting) are not allocated to programs.

- 10 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2008

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Program revenues include (a) charges paid by the recipients of goods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
Fund Financial Statements: The fund financial statements provide information about the School District's funds, including fiduciary funds. Eliminations have been made to minimize the double counting of internal activities. Separate statements for each category (governmental and fiduciary) are presented. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column.
The School District reports the following major governmental funds:
General Fund is the School District's primary operating fund. It accounts for all financial resources of the School District, except those resources required to be accounted for in another fund.
District-wide Capital Projects Fund accounts for financial resources including Special Purpose Local Option Sales Tax (SPLOST), Bond Proceeds and grants from Georgia State Financing and Investment Commission to be used for the acquisition, construction or renovation of major capital facilities.
Debt Service Fund accounts for taxes (sales) legally restricted for the payment of general long-term principal, interest and paying agent's fees.
The School District reports the following fiduciary fund type:
Agency funds account for assets held by the School District as an agent for various clubs or individuals.
BASIS OF ACCOUNTING
The basis of accounting determines when transactions are reported on the financial statements. The District-wide governmental and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, sales taxes, grants and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year in which the underlying transaction (sale) takes place. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
- 11 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2008

EXHIBIT"H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The School District uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts.
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The School District considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities and acquisitions under capital leases are reported as other financing sources.
The School District funds certain programs by a combination of specific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the School District's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Official Code of Georgia Annotated Section 45-8-14 authorizes the School District to deposit its funds in one or more solvent banks, insured Federal savings and loan associations or insured chartered building and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interestearning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
- 12 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2008

EXHIBIT"H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool 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.
The School District does not have a formal policy regarding investment policies that address credit risks, custodial credit risks, concentration of credit risks, interest rate risks or foreign currency risks.
RECEIVABLES
Receivables consist of amounts due from property and sales taxes, grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the basic financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
PROPERTY TAXES
The City of Bremen fixed the property tax levy for the 2007 tax digest year (calendar year) on September 24, 2007 (levy date). Taxes were due on December 3, 2007 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2007 tax digest are reported as revenue in the governmental funds for fiscal year 2008. The Bremen City Clerk bills and collects the property taxes for the School District, withholds $3.50 per bill as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during fiscal year ended June 30, 2008, for maintenance and operations amounted to $2,690,609.42.

- 13 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2008

EXHIBIT"H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The tax millage rate levied for the 2007 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

12.95 mills

SALES TAXES

Special Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $2,025,400.23 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years.

INVENTORIES

FOOD INVENTORIES On the basic financial statements, inventories of donated food commodities used in the preparation of meals are reported at their Federally assigned value and purchased foods inventories are reported at cost (first-in, first-out). The School District uses the consumption method to account for inventories whereby donated food commodities are recorded as an asset and as revenue when received, and expenses/expenditures are recorded as the inventory items are used. Purchased foods are recorded as an asset when purchased and expenses/expenditures are recorded as the inventory items are used.

CAPITAL ASSETS

Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund financial statements at the time of purchase (including ancillary charges). On the District-wide financial statements, all purchased capital assets are valued at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at estimated fair market value on the date donated. Disposals are deleted at depreciated recorded cost. The cost of normal maintenance and repairs that do not add to the value of assets or materially extend the useful lives of the assets is not capitalized. Depreciation is computed using the straight-line method. The School District does not capitalize book collections or works of art. During the fiscal year under review, no events or changes in circumstances affecting a capital asset that may indicate impairment was known to the School District.

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

- 14 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2008

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Capitalization Policy

Estimated Useful Life

Land Land Improvements Buildings and Improvements Equipment

All

NIA

$ 10,000.00 10 to 60 years

$ 50,000.00 45 to 60 years

$ 10,000.00 5 to 30 years

Depreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives.

GENERAL OBLIGATION BONDS

The School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities.

In the District-wide and fund financial statements, the School District recognized bond premiums and discounts, as well as bond issuance costs during the fiscal year bonds are issued. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. To conform to generally accepted accounting principles, bond premiums and discounts, as well as issuance costs, should be deferred and amortized over the life of the bonds using the straight-line method. The effect of this deviation is deemed to be immaterial to the fair presentation of the basic financial statements.

General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the Statement of Net Assets.

NET ASSETS

The School District's net assets in the District-wide Statements are classified as follows:

Invested in capital assets, net of related debt - This represents the School District's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt.

Restricted net assets - These represent resources for which the School District is legally or contractually obligated to spend resources for bus replacement, continuation of Federal programs, debt service and capital projects in accordance with restrictions imposed by external third parties.

- 15 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2008

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Unrestricted net assets - Unrestricted net assets represent resources derived from property taxes, sales taxes, grants and contributions not restricted to specific programs, charges for services, and miscellaneous revenues. These resources are used for transactions relating to the educational and general operations of the School District, and may be used at the discretion of the Board to meet current expenses for those purposes.
FUND BALANCES RESERVED
Reserves represent those portions of fund balance equity that are legally segregated for a specific future use.
UNRESERVED-DESIGNATED Designated fund balances represent tentative plans for future use of financial resources.
Note 3: 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 of the public funds being secured after the deduction of the amount of deposit insurance. If a depository elects the pooled method (OCGA 45-8-13.1) the aggregate of the market value of the securities pledged to secure a pool of public funds shall be not less than 110 percent of the daily pool balance. At June 30, 2008, $1,182,864.00 of component unit deposits were not secured by surety bond, insurance or collateral as specified above.
Acceptable security for deposits consists of any one of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,

- 16 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2008

EXHIBIT "H"

Note 3: DEPOSITS

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

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

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

CATEGORIZATION OF DEPOSITS At June 30, 2008, the bank balances were $7,768,796.70. The amounts of the total uninsured bank balances are classified into three categories of custodial credit risk:

Category 1 - Uncollateralized, Category 2 - Cash collateralized with securities held by the pledging financial institution,
or Category 3 - Cash collateralized with securities held by the pledging financial institution's
trust department or agent but not in the School District's name.

PRIMARY GOVERNMENT The School District's uninsured deposits are classified by custodial credit risk category at June 30, 2008, as follows:

Custodial Credit Risk Category

Bank Balance

1

$

0.00

2

1,676,013.44

3

0.00

Total

$ 1,676,013.44

COMPONENT UNIT At June 30, 2008, Bremen Educational Foundation, Inc.'s, bank balances of $1,283,180.00 were classified by custodial credit risk category as follows:

- 17 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2008

EXHIBIT "H"

Note 3: DEPOSITS

Custodial Credit Risk Category

Bank Balance

1

$ 1,182,864.00

2

0.00

3

0.00

Total

$ 1,182,864.00

Note 4: NON-MONETARY TRANSACTIONS

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

Note 5: CAPITAL ASSETS

The following is a summary of changes in the Capital Assets during the fiscal year:

Governmental Activities Capital Assets, Not Being Depreciated:
Land Construction in Progress
Total Capital Assets Not Being Depreciated
Capital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements
Less Accumulated Depreciation for: Buildings and Improvements Equipment Land Improvements
Total Capital Assets, Being Depreciated, Net
Governmental Activity Capital Assets - Net

Balances Julx 1, 2007

Increases

Decreases

Balances June 30, 2008

$ 1,009,996.00 $ 515,907.00 $ 3,891,100.00 13,312,148.82
$ 4,901,096.00 $ 13,828,055.82 $

0.00 $ 1,525,903.00 17,203,248.82
0.00 $18,729,151.82

$ 11,020,081.00 549,930.00 $ 120,084.00

25,974.00 $

$ 11,020,081.00

10,443.00

565,461.00

120,084.00

2,441,044.00 282,581.00 67,495.00

184,205.00 47,329.00
3 434.00

$ 8,898,975.00 $ -208,994.00 $

$ 13,8QQ,Q71.QQ $13,612 Q61.82 $

10,443.00

2,625,249.00 319,467.00 70,929.00

0.00 $ 8,689,981.00

Q,QQ $21,412,132 82

Current year depreciation expense by function is as follows:

- 18 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2008

EXHIBIT"H"

Note 5: CAPITAL ASSETS

Instruction Support Services
General Administration School Administration Maintenance and Operation of Plant Student Transportation Services Food Services

$ 187,340.00

$

6,002.00

913.00

1,945.00

29,037.00

37,897.00 9,731.00

$ 2341968.00

Note 6: RESTRICTED ASSETS

Special Purpose Local Option Sales Tax (SPLOST) and general obligation bond proceeds are restricted assets in the Statement of Net Assets because their use is limited by applicable bond covenants or statutory provisions. Restricted assets at June 30, 2008, were as follows:

District-wide Capital Projects

Bond

SPLOST

Proceeds

Debt Service Funds

Restricted Cash and Cash Equivalents: Debt Services Capital Acquisitions

$ 840,806.36

$

$ 145,050.30 $ 2,136,560.58

3,416.77

Note 7: RISK MANAGEMENT

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

The School District participates in the Georgia School Boards Association Risk and Insurance Management System, a public entity risk pool organized on July 1, 1994, to develop and administer a plan to reduce risk of loss on account of general liability, motor vehicle liability, or property damage, including safety engineering and other loss prevention and control techniques, and to administer one or more groups of self-insurance funds, including the processing and defense of claims brought against members of the system. The School District pays an annual premium to the system for its general insurance coverage. Additional coverage is provided through agreements by the system with other companies according to their specialty for property, boiler and machinery (including coverage for flood and earthquake), general liability (including coverage for sexual harassment, molestation and abuse), errors and omissions, crime and automobile risks. Payment of excess insurance for the system varies by line of coverage.

- 19 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2008

EXHIBIT"H"

Note 7: RISK MANAGEMENT

Coverage in the Georgia School Boards Association Risk and Insurance Management System includes Dishonesty and Faithful Performance coverage as follows:

Position Covered

Amount

Superintendent Employees

$ 50,000.00 $ 50,000.00

The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the same fund from which that employee's salary and benefits were paid. Claims are accounted for with expenses/expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated.

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

Beginning ofYear Liability

Claims and Changes in Estimates

Claims Paid

EndofYear Liability

2007 2008

$

0.00 $

1,235.00 $

1,235.00 $

0.00

$

0.00 $

1,278.00 $

1,278.00 $

0.00

The School District participates in the Georgia Education Workers' Compensation Trust, a public entity risk pool organized on December 1, 1991, to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The School District pays an annual premium to the Trust for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Trust with the Midwest Employers Casualty Company to provide coverage for potential losses sustained by the Trust in excess of $500,000.00 loss per occurrence, up to $2,000,000.00.

Note 8: OPERATING LEASES

City of Bremen Board of Education has entered into various leases as lessee for mobile classroom and various copiers. These leases are considered for accounting purposes to be operating leases. Lease expenditures for the year ended June 30, 2008, for governmental funds amounted to $38,530.00. Future minimum lease payments for these leases are as follows:

-20-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2008

EXHIBIT "H"

Note 8: OPERATING LEASES

Year Ending

Governmental Funds

2009 2010 2011 2012

$ 25,136.00 6,449.00 4,229.00 2,304.00

Total

$ 38,118.00

Note 9: SHORT-TERM DEBT

The School District issued tax anticipation notes in advance of sales tax collections, depositing the proceeds in its District-wide Capital Projects Fund. This short-term debt is to provide cash for the purchase of land until sales tax collections are received by the School District. Article IX, Section V, Paragraph V of the Constitution of the State of Georgia limits the aggregate amount of short-term debt to 75 percent of the total gross income from taxes collected in the preceding year and requires all short-term debt to be repaid no later than December 31 of the calendar year in which the debt was incurred.

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

Beginning Balance

Issued

Redeemed

Ending Balance

Tax Anticipation Notes $===='0-.0-0 $ 545,000.00 $====0~.0-0 $ 545,000.00

Note 10: LONG-TERM DEBT

CAPITAL LEASES The City of Bremen Board of Education entered into an agreement dated April 1, 2008, with the Georgia School Board Association for the construction and subsequent lease of property. The School District received $600,000.00 in cash for the financing of the property, which remained unspent at June 30, 2008. This unspent balance is classified as cash on the statement of net assets. Under the terms of the agreement, the School District will make annual payments through 2015. This lease agreement qualifies as a capital lease for accounting purposes, and, therefore, has been recorded at the present value of the future minimum lease payments as of the date of the inception.

- 21 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2008

EXHIBIT "H"

Note 10: LONG-TERM DEBT

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

Purpose

Interest Rates

Amount

General Government - Series 2006 General Government - Series 2007

4.10% - 4.38% $ 6,000,000.00

3.869%

6,000,000.00

$ 12,000,000.00

The changes in Long-Term Debt during the fiscal year ended June 30, 2008, were as follows:

G.O. Bonds Capital Leases

Balance July 1, 2007

Governmental Funds

Additions

Deductions

Balance June 30, 2008

Due Within One Year

$ 6,600,000.00 $ 6,000,000.00 $ 600,000.00 $ 12,000,000.00 $ 600,000.00

_ _ _o=.o=o 600,000.00 _ _ _ _ 600.000.00

76.ooo.oo

$ 6.600.000.00 $ 6.600.000.00 $ 600.000.00 $ 12.600.000.00 $ 676.000.00

At June 30, 2008, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30
2008 2009 2010 2011 2013 2014- 2018 2019 - 2023
Total Principal and Interest

Ca2ital Leases

Princi2al

Interest

General Obligation Debt

Princi2al

Interest

$ 76,000.00 $ 78,000.00 82,000.00 85,000.00 89,000.00 190,000.00

16,877.25 $ 15,117.40 12,867.10 10,501.40 8,049.16 8,279.96

600,000.00 625,000.00 645,000.00 670,000.00 695,000.00 3,925,000.00 4,840,000.00

$ 476,839.26 453,141.64 428,573.49 403,134.81 376,728.89
1,446,693.89 543,650.67

$ 600,000.00 $ 71,692.27 $ 12,000,000.00 $ 4,128,762.65

Note 11: ON-BEHALF PAYMENTS

The School District has recognized revenues and costs in the amount of $303,134.25 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies.

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $301,869.25

- 22 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2008

EXHIBIT "H"

Note 11: ON-BEHALF PAYMENTS

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$1,265.00

Note 12: SIGNIFICANT COMMITMENTS

The following is an analysis of significant outstanding construction or renovation contracts executed by the School District as of June 30, 2008, together with funding available:

Project

Unearned Executed Contracts

Funding Available From State

Bremen Elementary School Project (07-763-071) $ Bremen Middle School (07-763-015) Bremen Middle School - Sports Complex Bremen High School (07-763-070)

154,366.20 $ 56,160.53
1,229.88 112,064.60

225,193.96 384,869.20
36,292.60

$ 323!821.21 $ 646!355.76

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

Note 13: SIGNIFICANT CONTINGENT LIABILITIES

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

Note 14: POSTEMPLOYMENT BENEFITS

Georgia Retiree Health Benefit Fund

Plan Description. The School District contributes to the Georgia Retiree Health Benefit Fund ("GRHBF"), a cost-sharing multiple-employer defined benefit postemployment healthcare plan administered by the Department of Community Health. GRHBF provides health insurance benefits to eligible retirees and their qualified beneficiaries. Pursuant to Title 45, Chapter 18 of the Official Code of Georgia Annotated, the authority to establish and amend the benefit provisions of the plan is assigned to the Board of Community Health. The Department of Community Health issues a publicly available financial report that includes financial statements and required supplementary information for GRHBF. That report may be obtained from the Department of Community Health at 2 Peachtree Street, Atlanta, Georgia 30303.

- 23 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2008

EXHIBIT"H"

Note 14: POSTEMPLOYMENT BENEFITS

Funding Policy. The contribution requirements of plan members and participating employers are established and may be amended by the Board of Community Health. Contributions of plan members or beneficiaries receiving benefits vary based on plan election, dependent coverage, and Medicare eligibility and election. On average, plan members pay approximately twenty-five percent (25%) of the cost of health insurance coverage.

Participating employers are statutorily required to contribute in accordance with the employer contribution rate established by the Board of Community Health. This contribution rate is established to fund both the active and retired employee health insurance plans based on projected pay-as-you-go financing requirements. The employer contribution rates for the combined active and retiree plans for the fiscal year ended June 30, 2008, were as follows:

Teachers Non-Certificated Employees

18.534% of state-based salaries $162.72 per month

The School District's contribution to the health insurance plans for the fiscal year ended June 30, 2008, was $1,408,963.57, which equaled the required contribution.

Note 15: 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 costsharing 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 School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District 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 9.28% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

- 24-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2008

EXHIBIT "H"

Note 15: RETIREMENT PLANS

Fiscal Year

Percentage Contributed

Required Contribution

2008 2007 2006

100% 100% 100%

$ 841,659.90 $ 779,138.79 $ 779,112.43

Note 16: COMPONENT UNIT

The Bremen Educational Foundation, Inc. (Foundation) is a legally separate tax-exempt component unit of the City of Bremen Board of Education (School District). It was organized on December 17, 2001, as a Georgia Corporation pursuant to the provisions of the Georgia NonProfit Corporation Code. The Foundation's governing board consists of 8 members consisting of alumni and or local business persons plus ex-officio member to include the superintendent of the Bremen City School System. New members are elected by the Foundation Board. Although the School District does not control the timing or amount of receipts from the Foundation, the majority of resources or income thereon the Foundation holds and invests are restricted to the improvement of the quality of education of the School District and act as a fiscal agent for donors who wish to sponsor approved projects for the system, its teachers and students. Consequently, the Foundation is considered a component unit of the School District and is discretely presented in the School District's financial statements.

The Foundation utilizes the accrual method of accounting. The Foundation is subject to Statement of Financial Accounting Standards Board (FASB) 117, "Financial Statement of Notfor-Profit Organizations". As such, certain revenue recognition criteria and presentation features are different from Governmental Accounting Standards Board (GASB) revenue recognition criteria and presentation features. The Foundation's FASB financial statements were reclassified to GASB presentation in these financial statements. The Foundation's fiscal year is July 1, 2007, through June 30, 2008.

During the year ended June 30, 2008, the Foundation made contributions in the form of grants and gifts to all three schools. These contributions totaled $ 8,000.00, with $2,000.00 to Jones Elementary School,$ 2,000.00 to Sewell Middle School, and $4,000.00 to Bremen High School. Scholarships to individuals and colleges totaled $5,250.00.

Complete audited financial statements for the Foundation were not available as of the date of this report. Any inquiries or information about the Foundation can be obtained from Bremen Educational Foundation, Inc. The contacts are as follows: Mr. Vann Pelt, President, 810 Valley Run Drive, Bremen, Georgia 30110, 770-834-0738, Ext 134, e-mail address, ypelt@silvey.com or Ms. Joanie Lowe, Treasurer, 121 Buchanan Street, Bremen, Georgia 30110, 770-537-1110, e-mail address, joanielowe@bellsouth.net.

- 25 -

(This page left intentionally blank)

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL
YEAR ENDED JUNE 30, 2008

SCHEDULE "1"

REVENUES
Property Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Enterprise Operations Community Services Food Services
Capital Outlay
Total Expenditures
Net Change in Fund Balances
Fund Balances - Beginning
Adjustments

NONAPPROPRIATED BUDGETS

ORIGINAL (1)

FINAL (1)

ACTUAL AMOUNTS

$

2,500,000.00 $

2,500,000.00 $

2,690,609.42

9,944,623.00

10,154,094.00

10,505,511.57

723,927.00

726,627.00

810,113.83

928,250.00

928,250.00

1,259,633.97

82,400.00

82,400.00

134,073.60

50,000.00

50,000.00

581,163.61

$ 14,229,200.00 $ 14.441,371.00 $ 15,981,106.00

$ 10,142,969.31 $ 10,173,868.31 $ 10,738,558.16

529,828.56 364,864.00 238,246.13 343,352.38 844,735.90 115,891.50 834,208.45
87,054.93 14,600.00 110,148.20
646,750.00 530,000.00

529,328.56 365,660.00 238,246.13 343,537.38 844,735.90 115,891.50 834,208.45
87,054.93 14,600.00 110,148.22
649,250.00

587,939.44 411,474.42 246,809.03 351,958.27 892,892.59 121,204.68 866,509.76 129,474.35
9,036.62 73,370.87 416,234.67
3,891.13 667,050.42 516,207.00

$ 14,802,649.36 $ 14,306,529.38 $ 16,032,611.41

$

-573,449.36 $

134,841.62 $

-51,505.41

2,665,596.24

2,665,596.24

2,782,527.46

13,398.45

2,576.32

Fund Balances - Ending

$

2,105,545.33 $

2,803,014.18 $

2.731,022.05

Notes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual
(1) Original and Final Budget amounts do not include budgeted revenues or expenditures of the various principal accounts.
The accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements.

See notes to the basic financial statements.

-27 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2008

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program
Total Child Nutrition Cluster
Other Programs Pass-Through From Georgia Department of Education Food Donation (1)
Total U. S. Department of Agriculture
Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Special Education Grants to States Preschool Grants
Total Special Education Cluster
Other Programs Pass-Through From Georgia Department of Education Career and Technical Education - Basic Grants to States English Language Acquisition Grants Improving Teacher Quality State Grants Safe and Drug-Free Schools and Communities State Grants for Innovative Programs Tille I Grants to Local Educational Agencies
Total U. S. Department of Education

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

EXPENDITURES IN PERIOD

10.553 10.555

NIA N/A $
$

(2) 560 745.25
560,745.25

10.550

NIA $

66499.17 627,244.42

84.027 84.173

N/A $ NIA
$

331,683.72 22 797.28
354,481.00

84.048 84.365 84.367 84.186 84.298 84.010

N/A NIA NIA N/A N/A NIA
$

5,293.00 1,008.00 50,068.00 17,000.00 1,608.00 79153.14
508 611.14

Total Federal Financial Assistance
N/A = Not Available

$ ==1,=1=35..,.8=5=5=.5=6

Notes to the Schedule of Expenditures of Federal Awards

(1) The amount shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the School District during the current fiscal year.
(2) Expenditures for the funds earned on the School Breakfast Program ($40,380.60) were not maintained separately and are included in the 2008 National School Lunch Program.

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

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

The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the 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 basic financial statements.

See notes to the basic financial statements.

- 28 -

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2008

SCHEDULE "3"

AGENCY/FUNDING
GRANTS Bright From the Start Georgia Department of Early Care and Learning Pre-Kindergarten Program
Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades - Early Intervention (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program 20 Days Additional Instruction Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Categorical Grants Pupil Transportation Regular Bus Replacement Sparsity Grant - Alternative Program Nursing Services Vocational Supervisors Education Equalization Funding Grant Food Services Vocational Education Amended Formula Adjustment Other State Programs Comprehensive Academic Performance System (CAPS) Health Insurance High School Graduation Coach Middle School Graduation Coach Middle School Summer Remedial Program National Teacher Certification Preschool Handicapped Program Virtual Schools Grant
Georgia State Financing and Investment Commission Reimbursement on Construction Projects
Office of Treasury and Fiscal Services Public School Employees Retirement

GOVERNMENTAL FUND TYPES

CAPITAL

GENERAL

PROJECTS

FUND

FUND

TOTAL

$ 431,797.32

$

431,797.32

634,360.00 91,005.00
1,445,641.00 150,206.00 679,082.00 55,159.00
1,086,792.00 850,063.00 424,942.00
1,069,837.00 251,835.00 41,733.00 89,218.00 9,484.00 196,821.00 60,926.00 36,396.00
383,083.00 419,600.00 475,322.00
12,259.00 3,102.00
35,802.00 48,637.00
8,663.00 1,063,462.00
39,806.00 17,761.00 -154,982.00
61,538.00 301,869.25
70,886.00 42,096.00
962.00 3,327.00 65,206.00
550.00

634,360.00 91,005.00
1,445,641.00 150,206.00 679,082.00 55,159.00
1,086,792.00 850,063.00 424,942.00
1,069,837.00 251,835.00 41,733.00 89,218.00 9,484.00 196,821.00 60,926.00 36,396.00
383,083.00 419,600.00 475,322.00
12,259.00 3,102.00
35,802.00 48,637.00
8,663.00 1,063,462.00
39,806.00 17,761.00 -154,982.00
61,538.00 301,869.25
70,886.00 42,096.00
962.00 3,327.00 65,206.00
550.00

$ 3,463,822.80
1,265.00

3,463,822.80 1,265.00

See notes to the basic financial statements.

$ 10,505,511.57 $ 3,463,822.80 $ 13,969,334.37
- 29-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2008

SCHEDULE "4"

PROJECT
HARALSON COUNTY Acquiring, constructing and equipping school buildings and other buildings and facilities useful or desirable in connection
therewith, adding to, renovating, repairing,
improving and equipping existing school buildings and other buildings and facilities, useful or desirable in connection therewith, including constructing, modifying and equipping classrooms, acquiring system-wide technology improvements, acquiring school transportation vehicles and acquiring the necessary property for such schools, both real and personal, and for the future school sites, all at a maximum cost of $4,900,000.00
CARROLL COUNTY Funding the acquisition, construction, renovation, modification, improvement, extending and equipping of projects throughout the City of Bremen School System, including, but without limitation, additions, renovations, and improvements of certain existing system facilities, system-wide technology improvements, the acquisition of school transportation vehicles; the acquisition of land for additional schools, and the acquisition of all property, both real and personal, deemed necessary and advisable therefore including the funding of capitalized interest on debt of the City of Bremen with respect to the Bremen School Projects (the "Bremen School Projects"), the maximum cost of such Bremen School Projects not to exceed $4,840,000.00
HARALSON COUNTY II Funding a portion of the costs of the acquisition, construction, equipping and furnishing of new school buildings and facilities, including, but not limited to, additional classrooms, a new middle school, a new fine arts center and new physical education/athletic facilities, the addition, renovation, repair and improvement to existing school buildings and facilities, including, but not limited to, all existing schools, existing physical education/athletic facilities and the high school cafeteria, the acquisition and purchase of system-wide technology and safety equipment, including, but not limited to, computer hardware and software and security and safety equipment, the acquisition and purchase of school vehicles, including, but not limited to, school buses and maintenance vehicles, the addition, renovation, repair, paving and improvement to driveways and parking facilities, the acquisition and purchase of any property necessary and desirable therefore, both real and personal and the purchase of land (the "Bremen Projects"), capitalized interest on the Bremen Bonds through and including October 1, 2007

ORIGINAL ESTIMATED
COST{1)

CURRENT ESTIMATED COSTS{2)

AMOUNT EXPENDED IN CURRENT
YEAR {3)

AMOUNT EXPENDED IN PRIOR
YEAR{3l

PROJECT STATUS

$ 4,900,000.00 $ 5,514,337.03 $ 1,374,737.20 $ 4,139,599.83 Ongoing

4,840,000.00 4,840,000.00

621,750.00

3,320,968.09 Ongoing

9,390,000.00 14,818,977.40 11,304,908.25 3,514,069.15 Ongoing

-30-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2008

SCHEDULE "4"

PROJECT

ORIGINAL ESTIMATED
COST(1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR(3)

CARROLL COUNTY II (TANS AND LEASE PURCHASE)

Consisting of acquiring, constructing, adding to,

renovating, modifying, repairing, improving and

equipping schools and other buildings and facilities

and acquiring any property necessary or desirable

therefor, both real and personal; acquiring real

estate for the construction of new schools and

facilities; constructing and equipping new schools

and facilities and acquiring any property necessary

or desirable therefor, both real and personal;

including but not limited to the following without

prioritizing any of such items: completion and

equipping of Bremen Middle School; constructing

and equipping a fourth and fifth grade academy

at the Bremen Middle School site; acquiring real

estate for the construction of new schools and

facilities, including a new 3-5 school site;

constructing and equipping a performing arts

center; making system-wide technology

improvements; and acquiring maintenance and

transportation vehicles

$ 5,530,000.00 $

5,530,000.00 $

1,070,117.87

AMOUNT EXPENDED
IN PRIOR YEAR (3)

PROJECT STATUS
Ongoing

(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax.
(2) The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion.
(3) The voters of 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 basic financial statements.

- 31 -

(This page left intentionally blank)

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY GENERAL FUND- QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2008

SCHEDULE "5"

DESCRIPTION

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

ELIGIBLE QBE PROGRAM COSTS

SALARIES OPERATIONS

TOTAL

Direct Instructional Programs

Kindergarten Program

$

Kindergarten Program-Early Intervention Program

Primary Grades (1-3) Program

Primary Grades-Early Intervention (1-3) Program

Upper Elementary Grades (4-5) Program

Upper Elementary Grades-Early Intervention (4-5)

Program

Middle Grades (6-8) Program

Middle School (6-8) Program

High School General Education (9-12) Program

Vocational Laboratory (9-12) Program

Students with Disabilities

Category I

Category II

Category Ill

Category IV

CategoryV

Gifted Student - Category VI

Remedial Education Program

Alternative Education Program

English Speakers of Other Languages (ESOL)

699,568.00 $ 694,368.57 $

100,361.00

132,026.48

1,575,335.00 2,139,130.95

164,682.00

126,920.48

748,529.00

875,444.15

60,838.00

56,400.52

1,184,004.00 934,812.00 472,682.00
1,180,970.00
271,738.00 46,723.00 97,612.00 8 989.00

1,349,917.80 1,466,217.76
299,287.77
142,485.32 44,231.00
451,397.36 212,397.18
94,128.26 70,940.15 53,326.93 116,042.79
8,990.76

20,321.25 $
584.06 84,687.28
1,156.63 58,118.37

714,689.82 132,610.54 2,223,818.23 128,077.11 933,562.52

158.24 6,366.36 48,300.56 88,717.87
550.00

56,558.76 6,366.36
1,398,218.36 1,554,935.63
299,837.77

605.32 60.00
551.01 353.96

143,090.64 44,231.00 451,457.36 212,397.18 94,128.26 71,491.16 53,326.93 116,396.75
8,990.76

TOTAL DIRECT INSTRUCTIONAL PROGRAMS

$

7,546,843.00 $ 8,333,654.23 $ 310,530.91 $ 8,644,185.14

Media Center Program Staff and Professional Development

216,007.00 40,430.00

204,144.09 3,658.12

37,141.43 57,103.18

241,285.52 60,761.30

TOTAL QBE FORMULA FUNDS

$

7,803,280.00 $ 8,541,456.44 $ 404,775.52 $ 8,946,231.96

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

See notes to the basic financial statements.

- 33-

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
April 29, 2009

Honorable Sonny Perdue, 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 INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of City of Bremen Board of Education as of and for the year ended June 30, 2008, which collectively comprise City of Bremen Board of Education's basic financial statements and have issued our report thereon dated April 29, 2009. This report was qualified for a scope limitation, as identified in the auditor's report on the basic financial statements. Except as discussed in the following paragraph, we conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
The financial statements of Bremen Educational Foundation, Inc. (Foundation) have not been audited, and we were not engaged to audit the Foundation's financial statements as part of our audit ofthe School District's basic financial statements. The Foundation's financial activities are included in the School District's basic financial statements as a discretely presented component unit. We do not express an opinion for the discretely presented component unit.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered City of Bremen Board of Education's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose ofexpressing an opinion
2008YB-10X

on the effectiveness of the City of Bremen Board of Education's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City ofBremen Board of Education's internal control over financial reporting.
A control deficiency exists when the design or operation ofa control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affect the City ofBremen Board ofEducation's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement ofthe City ofBremen Board ofEducation's financial statements that is more than inconsequential will not be prevented or detected by the City ofBremen Board of Education's internal control.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement ofthe financial statements will not be prevented or detected by the City ofBremen Board of Education's internal control.
Our consideration of the internal control over financial reporting was for the limited purpose described in the first paragraph ofthis section and would not necessarily disclose all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether City of Bremen Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
This report is intended solely for the information and use of management, members of the City of Bremen Board ofEducation, others within the entity, 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,

RWH:as 2008YB-10X

~--illW.~ Ru eH W. Hinton, CPA, CGFM State Auditor

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
April 29, 2009

Honorable Sonny Perdue, 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 ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance ofCity ofBremen Board ofEducation with the types ofcompliance requirements described in the U.S. Office of Management and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 2008. City of Bremen Board of Education's major Federal programs are identified in the Summary of Auditor's Results Section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of City of Bremen Board of Education's management. Our responsibility is to express an opinion on City of Bremen Board of Education's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States ofAmerica; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and 0MB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB 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 ofBremen Board ofEducation's compliance with those requirements and performing such other procedures as we considered necessary in the

2008SA-10

circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on City of Bremen Board of Education's compliance with those requirements.
In our opinion, the City ofBremen 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, 2008.
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 ofBremen 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 ofexpressing our opinion on compliance, but not for the purpose ofexpressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City ofBremen Board of Education's internal control over compliance.
A control deficiency in an entity's internal control over compliance exists when the design or operation ofa control does not allow management or employees, in the normal course ofperforming their assigned functions, to prevent or detect noncompliance with a type ofcompliance requirement of a Federal program on a timely basis. A significant deficiency is a control deficiency, or combination ofcontrol deficiencies, that adversely affects the entity's ability to administer a Federal program such that there is more than a remote likelihood that noncompliance with a type of compliance requirement of a Federal program that is more than inconsequential will not be prevented or detected by the entity's internal control.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that material noncompliance with a type of compliance requirement of a Federal program will not be prevented or detected by the entity's internal control.
Our consideration ofthe internal control over compliance was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above.
2008SA-10

This report is intended solely for the information and use of management, members ofthe City of Bremen Board of Education, 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,
~CQ~~ Russell W. Hinton, CPA, CGFM State Auditor
RWH:as 2008SA-10

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, 2008
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.

SECTION IV FINDINGS AND QUESTIONED COSTS

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2008
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 unqualified for all opinion units with the exception of the Board's discretely presented component unit. Those financial statements have not been audited and we express no opinion on them.
2. Significant Deficiencies in Internal Control Disclosed by the Audit ofthe Financial Statements The audit report for the City ofBremen Board ofEducation did not disclose any significant deficiencies related to the financial statements.
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 financial statements.
4. Significant Deficiencies in Internal Control Over Major Programs The audit report for the City ofBremen Board of Education did not disclose any significant deficiencies in internal control over major programs.
5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the City ofBremen Board ofEducation's report on compliance with requirements applicable to major programs was unqualified.
6. Audit Findings Required to be Reported by Section .510(a) of 0MB Circular A-133 The City ofBremen Board ofEducation's audit did not disclose audit findings required to be reported by section .510(a) ofOMB Circular A-133.
7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food Services - School Breakfast Program 10.555 Food Services - National School Lunch Program
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
9. Low Risk Auditee The City ofBremen Board ofEducation qualified as a low risk auditee as defined by Section .530 ofOMB Circular A-133.
- 1-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2008
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.
-2 -