II
CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY
.. . ~
- TABLE OF CONTENTS -

SECTION!

FINANCIAL

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

EXHIBITS

GENERAL-PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

3

C

COMBINED, STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

4

D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

5

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

14

F

. COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

16

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

18

2 SCHEDULE OF STATE REVENUE

21

EARNINGS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

3

BY PROGRAM

22

4

BY SITE

23

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY - TABLE OF CONTENTS -

SECTION II

COMPLIANCE AND INTERNAL CONTROL REPORTS

REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL

REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

.

. REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-B3

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

II
SECTION I FINANCIAL
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RUSSEI.I. \\"'. HI:'.To/,;
STATE AUDITOR (404).656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street. S.w.. Suite 214 Atlanta. Georgia 30334-X40()
March 6, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members 6fthe State Board of Education
and Superintendent and Members of the City of Buford Board ofEducation

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

Ladies and Gentlemen:

We have audited the accompanying general-purpose financial statements ofthe City ofBuford Board of Education, a component unit of the City of Buford, Georgia, as of and for the year ended June 30, 2001, as listed in the table ofcontents. These general-purpose financial statements are the responsibility of the City of Buford Board of Education's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our
op~mon.

As described in the notes to the general-purpose financial statements, th~ Board of Education's

financial statements have been prepared using certain accounting practices and policies which, in our

opinion, vary in some respects from generally accepted accounting principles. These variances are

described as follows:

.

200 1ARL-13

* The general-purpose financial statements of the Board of Education did not contain a
General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accouriting principles.
* School activity accounts maintained at the individual schools are not included in the
.general-purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements.
* The Board of Education did not recognize as expenditures, in the year ended
June 30, 2001, a portion of salaries and the corresponding employer's cost of related benefits earned for contrac~ual services completed prior to June 30; 2001. Also funds received, subsequent to June 30,2001, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were improperly recorded in the year ended June 30, 2001. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general-purpose financial statements of the matters referred to in the preceding paragraph, the general-purpose financial statements referred to above present fairly; in all material respects, the financial position ofthe City ofBuford Board ofEducation as of June 30, 2001, and the results of its operations 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 March 6, 2002, on our consideration ofthe City ofBuford Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions oflaws, regulation8, contracts and grants: That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the City of Buford Board of Education taken as a whole. The accompanying combining statements (Exhibits E and F) and the financial schedules (Schedules I through 4), which includes the Schedule of Expenditures ofFederal Awards as required by U. S. Office ofManagement and Budget Circular A-I33, Audits ofStates. Local Governments. and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the general-purpose financial statements. Such information has been subjected to the auditing procedures applied in the
200 1ARL-13

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audit of the .general-purpose financial statements and in our opinion, except for the effects of the matters referred to in the third paragraph, such information is fairly stated, in all material respects, in relation to the general-purpose financial statements taken as a whole.
A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the pres~ ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24.
Respectfully submitted,
~lD:~
Ru ell W. Hinton State Auditor
R:wtI:gp 2001ARL-13

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CITY OF BUFORD BOARD OF EDUCAnON - GWINNETT COUNTY

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CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY COMBINED BALANCE SHEET ALl. FUND TYPES JUNE 30, 2001

EXHIBIT "A"

ASSETS
Cash and Cash Equivalents
Accounts Receivable
Prepaid Items
Inventories Food Donated Commodities Purchased Food

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTALS (Memorandum Only)' JUNE 30, 2001 JUNE 30, 2000

$ 946,092.82 $ 439,824.94 ,$ 1,385,917.76 $ 1,489,326.59

1,628,142.26

6,929.64

1,635,071.90

1,498,185.26

2,130.00

2,130.00

20,774.61

4,977.40 5,456.54

4,977.40 5,456.54

21,481.05 6,760.54

Total Assets

$ 2,576,365.08 $ 457,188.52 $ 3,033,553.60 $ 3,036,528.05

LIABILITIES AND FUND EqUITY

LIABILITIES

Accounts Payable Salaries Payable .Expired Grant Balances Payable Deferred Revenue

$ 199.397.54 $ 60,340.13 $ 259.737.67 $ 163.612.18

5,808.37

103,461.67

109,270.04

65.852.61

103,094.37

103,094.37

132.373.37

2,987.13

2,987.13

Total Liabilities

$ 205,205.91 $ 269,883.30 $ 475.089.21 $' 361,838.16

FUND EqUITY

, Fund Balances Reserved For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated

$

4,977.40 $

5,456.54

4.977.40 $ 5,456.54

21,481.05 6.760.54

$ 2.371,159.17

176,871.28

2,548.030.45

2,646,448.30

Total Fund Equity

$ 2,371,159.17 $ 187,305.22 $ 2.558,464.39 $ 2,674,689.89

Total Liabilities and Fund Equity

$ 2,576,365.08 $ 457,188.52 $ 3,033,553.60 $ 3,036,528.05

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

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 2001

EXHIBIT "B"

FUND BALANCE JUNE 30

$ 2,371,159.17 $ 187,305.22 $ 2,558,464.39 $ 2,674,689.89

The notes to the general-purpose financial statements are an integral part of this statement.
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CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL -(NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 2001

EXHIBIT "C"

FUND BALANCE JUNE 30, 2001

$ 166,660,04 $ 2,371,159,17

$ -275,985.38 $ 187,305.22

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

CITY OF BUFORD BOARD OF EDUCAnON - GWINNEIT COUNTY EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 200 1

Notel: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

REPORTING ENTITY

The City ofBuford Board of Education (School District) was established under the laws ofthe State of Georgia and operates under the guidance of a school board ofwhich four members are elected by the public and the fifth member is elected as the Chairman of the City Commission and a Superintendent appointed by the Board. The School District is not organized as a separate legal entity and does not have the power to levy taxes or issue bonds. Its budget is subject to approval by the City of Buford, Georgia. Accordingly, the City of Buford Board of Education is detennined to be a component unit of the City of Buford, Georgia, which is the primary government.

FUND ACCOUNTING

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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

I

segregating transactions related to certain governmental functions or activities. A fund is a separate

accounting entity with a self-balancing set of accounts:

General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the School District. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.

Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general-purpose financial statements.

The general-purpose financial statements account for all State, Federal, Taxes and Other funds under control of the School District, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds presented in this report are as follows:

GOVERNMENTAL FUND TYPES - are used to account for all or most of a School District's educational activities. Governmental Fund Types include:

GENERAL FUND - the fund used to account for all financial resources of the School District except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.

SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue

sources that are legally restricted to expenditures for specified purposes. These funds are

received primarily from the Georgia Department ofEducation and from the Federal government

to accomplish specific educational objectives.

.

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CITY OF BUFORD BOARD OF EDUCAnON - GWINNETT COUNTY EXHIDIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus, All governmental funds are accounted for using a current financial resources measurement focus .. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funqs.
Governmental funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The School District considers receivables collected within sixty days after yearend to be available and therefore susceptible to accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
.Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 2001, a substantial number ofpersonnel of the School District were employed for a one hundred and nin~ty. day period beginning in August 2000 and ending in early June 2001. Personnel contracts for this .employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2000 and ending in August 2001. . State grants to fund the State's share of these contracts were disbursed from the Georgia. Department of Education to the School District in the same twelve months. As of June 30, 2001, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 2001, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30,2001. Also, the State's portion ofthe compensation paid in July and August 2001 was recei:ved and recorded as revenue in the fiscal year subsequent to June 30, 2001. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were recorded in the year ended June 30, 2001. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
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CITY OF BUFORD BOARD OF EDUCAnON - GWINNETT COUNTY EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 200 I
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUDGET
The City ofBuford Board ofEducation's budget is a complete financial plan for the School District's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
The budget process begins when the School District's administration prepares a tentative budget for . the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised
at least once in a newspaper of general circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisionsas necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the .Quality Basic Education Act, OCGA Section 20-2-167(c), to the Georgia '-' Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of cash on hand and demand deposits in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.
RECEIVABLES
Receivables consist of grant reinibursementsdue on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general-purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
PROPERTY TAXES
The City of Buford Board of Commissioners fixed the property tax levy for the 2000 tax year (calendar year) on September 5,2000 (levy date). Taxes were due on November 20,2000 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2001. The City of Buford City Clerk bills and collects the property taxes for the School District and remits the taxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2001 for maintenance and operations amounted to $8,376,166.00.
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CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The tax millage rate levied for the 2000 tax year (calendar year) for the City of Buford Board of. Education was as follows (a mill equals $1 per thousand dollars'of assessed value):

School Operations

13.65 mills

SALES TAXES

Special Purpose Local Option Sales Tax (SPLOST) is to be used for capital outlay for educational purposes and is collected in Gwinnett County and Hall County. The Gwinnett County SPLOST will provide the City of Buford Board of Education with a maximu'mof $14,850,000.00 and the Hall County SPLOST. will provide the City of Buford Board of Education with a maximum of '$3,000,000.00. The Statewill terminate collection ofthis tax once the respective maximum amount has been collected or on June 30, 2002, whichever occurs first.

The City of Buford (City Goverriment) has created and maintains Capital Projects Funds to account
for the funds derived from aforementioned SPLOST tax initiatives which benefit the Board of Education. The City Government also handles all budgeting for the various capital projects~ All revenues and expenditures associated with these SPLOST tax initiatives are reflected in the City of
Buford (City Government) Financial Report.

INVENTORIES

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

PREP-AID ITEMS

Payments made to vendors for services that will benefit periods subsequent to June 30, 2001,. are recorded as prepaid items.

COMPENSATED ABSENCES

Compensated absences represent obligations of the School District relating to employees' rights to . receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably

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CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY EXHIDIT "0" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS nINE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

estimated. No liability has been recorded in the individual funds for the current portion of this obligation as this amount is deemed immaterial to the general-purpose financial statements.

Additionally, the dollar value of accumulated compensated absences at June 30, which will be payable from future resources has not been recorded in a General Long-Term Debt Account Group as this liability is also deemed to be immaterial to the fair presentation ofthese financial statements.

INTERFUND TRANSACTIONS

The School District has the following types of interfund transactions:

Reimbursements ofexpenditures initially made from a fund that are properly applicable to another

fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the

fund that is reimbursed.

.

Operating transfers are recorded for ap interfund transactions other than reimbursements.

MEMORANDUM ONLY - TOTAL COLUMNS

Total columns on the general-purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results ofoperations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.

Note 2: DEPOSITS

COLLATERALIZAnON 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 ofmoney which has not
been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face
value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance.
If a depository elects the pooled method (OCGA45-8-13.1) the aggregate ofthe market value ofthe
securities pledged to secure a pool ofpublic funds shall be no~ less than 11 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.

Acceptable security for deposits consists of anyone of or any combination of the following:

(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Geo~gia,

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CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001

Note 2: DEPOSITS

(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,

(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, Of other obligations of ~ subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Asso~iation, and the Federal National Mortgage Association.

CATEGORIZATION OF DEPOSITS At June 30, 2001, the bank balances were $2,072,318.76. The amountsofthetotal bank balances are classified into three categories of credit risk:

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

The School District's deposits are classified by risk category at June 30, 2001, as follows:.

Risk Category

Bank Balance

1

$ 100,000.00

2

0.00

3

1,972.318.76

Total

.. $ 2.072,318.76

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CITY OF BUFORD BOARD OF EDUCAnON - GWINNETT COUNTY EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001

Note 3: NON-MONETARY TRANSACTIONS

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

Note 4: RISK MANAGEMENT

The 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; natural disaster and unemployment compensation.

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

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

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

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

Position Covered

Amount

Superintendent Each Principal

$ 50,000.00 $ 3,000.00

Note 5: ON-BEHALF PAYMENTS

The School D'istrict has recognized revenues and expenditures in the amount of $201,809.73 for

health insurance and retirement contributions paid on the School District's behalfby the following

State Agencies.

.

.

Georgia Department of Education Paid tothe Georgia Department of Community Health For Health Insurance ofNon-Certified Personnel In the amount of$180,358.73

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CITY OF BUFORD BOARD OF EDUCAnON - GWINNETI COUNTY EXHIDIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001

Note 5: 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 $21 ,451.00

.

Note 6: CONTINGENT LIABILITIES

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

Note 7: ACCUMULATED EMPLOYEES' LEAVE

The School District has provisions for both termination and retirement payments. The termination policy provides that twelve month employees will be paid for their accumulated vacation leave at their existing pay rate at the end oftheir employment. The retirement policy provides that payments will be made to those retirees with an accumulation of a minimum of 100 sick leave days not to exceed 125 sick leave days at a rate of$20.00 per day. See Note 1 - Compensated Absences

Note 8: RETIREMENT PLANS .

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

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

TRS CONTRIDUTIONS REQUIRED AND MADE Employees ofthe 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 11.29% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

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CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

.

JUNE 30, 2001

Note 8: RETIREMENT PLANS
Fiscal Year 2001 2000 1999

Percentage Contributed
100% 100% 100%

Required Contribution
$ 1,210,253.68 $ 1,059,111.46 $ 982,562.38

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, CITY OF BUFORD BOARD OF EDUCAT'ION - GWINNETI COUNTY COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 2001

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

SCHOOL FOOD
SERVICES FUND

LOTIERY PROGRAMS

$

201,353.06 $

0.00

6,929.64

4,977.40 5,456.54

$

218,716.64 $=====0',;;,,00=

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Inventories Food Donated Commodities Purchased Food Unreserved ,Undesignated
Total Fund Equity
Total Liabilities and Fund Equity

$

3,830.65

27,580.77

$

31 ,411.42

$

4,977.40

5,456.54

176,871.28 $

0.00

$

187,305.22 $

0.00

$

218,716.64 $ ====,;;,,0.=:0=0

See notes to the general-purpose financial statements, - 14-

EXHIBIT"E"

FEDERAL PROGRAMS

TOTALS

JUNE 30, 2001

JUNE 30, 2000

$

238,471.88 $

439,824.94 $

403,267.60

6,929.64

6,974.27

4,977.40 5,456.54

21,481.05 6,760.54

$

238,471.88 $

457,188.52 $ ==4=3=8=,4=83=.4=:6=

$

4,758.10

$

56,509.48 $

60,340.13

36,312.47

75,880.90

103,461.67

65,852.61

103,094.37

103,094.37

126,892.58

2,987.13

2,987.13

$

238,471.88 $

269,883.30 $

233,815.76

$

4,977.40 $

21,481.05

5,456.54

6,760.54

$

O: :. :..::;OO~

176,871.28

176,426.11

$

0.00 $

187,305.22 $ _---=2=0"""4""',6-=-67:..:..7.:....:0~

$

238,471.88 $

457,188.52 $ ==4=3=8=,4=83=".4=:6=

- 15-

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2001

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration Student Transportation Services Food Services Operation
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Operating Transfers In
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory- Net Change in Period Donated Commodities Purchased Food
FUND BALANCE JUNE 30

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

51,842.00 $

395,021.33

328,093.00

$

774,956.33 $

45,355.00 45,355.00

$

45,355.00

$

774,511.16

$

774,511.16 $

$

445.17 $

45,355.00 0.00

$

445.17 $

0.00

204,667.70

0.00

-16,503.65 -1,304.00

$

187j05.22 $=====0.=00==

See notes to the general-purpose financial statements. - 16 -

EXHIBIT "F"

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 30,' 2001

JUNE 30, 2000

$

43,056.36 $

140,253.36 $

141,550.10

788,863.14

1,183,884.47

958,365.23

328,093.00

292,684.11

$

831,919.50 $ 1,652,230.83 $ 1,392,599.44

$

814,383.45 $

859,738.45 $

276,722.84

99,675.42 26,645.15
1,198.14 12,408.71

99,675.42 26,645.15
1,198.14 12,408.71 774,511.16

389,141.63 22,950.67 1,361.56 5,825.48 8,431.91
726,662.73

$

954,310.87 $ 1,774,177.03 $ 1,431 ,096.82

$

-122,391.37 $

-121,946.20 $.

-38,497.38

122,391.37

122,391.37

42,970.57

$

0.00 $

445.17 $

4,473.19

0.00

204,667.70

198,040.17

-16,503.65 -1,304.00

2,014.56 139.78

$

0.00 $

'187,305.22 $ =~2:=;0~4o,;;16;,;;,6,;.;7.~70~

- 17 -

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY SCHEDULE OF EXPENDITURES OF' FEDERAL AWARDS YEAR ENDED JUNE 30, 2001

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Agriculture. U. S, Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program National School Lunch Program
Total Child Nutrition Cluster
Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1)
Total U. S, Department of Agriculture
Education. U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Disa~i1ities Education Act Part B - Special Education Flow Through Capacity Building Improvement
Other Programs Pass Through From Georgia Department of Education Elementary and Secondary Education Act Tille I Grants to Local Educational Agencies Tille II Eis~nhower Professional Development Tille VI Innovative Education Program Strategies Class Size Reduction Title VII Immigrant Education Goals 2000 State and Local Education Systemic Improvement Grants Safe and Drug-Free Schools Vocational Education - Basic Grants to States High School Program Basic Grant Tech-Prep Education
Total U. S. Department of Education

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

10.553 10,555

N/A

$ 90.337,84

N/A

279,493,37 $

$ 369,831.21 $

(2) 749.321,04 (3)
749.321.04

10,550

N/A

25.190.12

$ 395.021.33 $

25,190,12 774.511,16

84.027 84.027

N/A

$ 101,685,46 $

N/A

8,818.00

101.685.46 53,431.36 (3)

84,010 84.281' 84.298 84.340 84.162
84.276 84.186
84.048 84.243

N/A

399,459.00

418.882.97 (3)

N/A

16,000.00

16,681.02 (3)

N/A

7.231.21

7,231,21

N/A

67,950.00

101,310,17 (3)

N/A

14,862.00

17,392.34 (3)

N/A

120.762.87

148,862.87 (3)

N/A

6,442.61

6,442.61

N/A

10,651,99

N/A

35.000.00

$ 788,863,14 $

36,267.78 (3) 46,123.08 (3)
954,310.87

Total Federal Financial Assistance
= N/A Not Available

$ 1,183,884.47 $ ====:1,~72;;;;8;,;;,8;;;;2;;;;,2;;;;.0;;;,3

- 18 -

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2001

SCHEDULE "1"

Notes to the Schedule of Expenditures of Federal Awards
(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the current fiscal year.
(2) Expenditures for the School Breakfast Program were not maintained separately and are included in the 2001 National School Lunch Program.
(3) Expenditures for this program include State, and/or Other Funds. Expenditures'are not maintained by fund source.
Major Programs are identified by an asterisk (0) 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 Buford Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the general-purpose financial statements.

See notes to the general-purpose financial statements.

- 19 -

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2001

SCHEDULE "2"

. AGENCY/FUNDING
GRANTS' 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 Middle School (6-8) Program High School General Education (9-12l Program Vocational Laboratory (9-12) Program .Students with Disabilities Category I Category II Category III Category IV Category V Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program Staff and Professional Development Indirect Cost Categorical Grants Pupil Transportation Regular Bus Replacement Nursing Services Principal Supplements Vocational Supervisors Education Equalization Funding Grant Food Services Vocational Education Other State Programs At-Risk Summer School Program Health Insurance Mentoring Program Mentor Teachers Remedial Summer School Lottery Programs Computers in the Classroom
Office of Treasury and Fiscal Services Public School Employees Retirement
CONTRACTS Education, Georgia Department of Georgia Reading Challenge Program Georgia Reading First Program
OTHER Metropolitan Regional Educational Service Agency Arts Connect Project

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 455,600.00 37,855.00
1,176,424.00 120,451.00 650,192.00
1,173,871.00 981,555.00 263,123:00
45,312.00 92,460.00 522,174.00 100,873.00 11,917.00 170,564.00 46,951.00 87,551.00 201,838.00 192,598.00 51,792.00 1,291,433.00

$ 455,600.00 37,855.00
.1,176,424.00 120,451.00 650,192.00
1,173,871.00 981,555.00 263,123.00
45,312.00 92,460.00 522,174.00 100,873.00 11,917.00 170,564.00 46,951.00 87,551.00 201,838.00 192,598.00 51,792.00 1,291,433.00

123,947.00 29,067.00 60,728.00
9,215.00 10,062.00 117,845.00
$ 20,012.00

51,842.00 14,956.36

1,671.63 180,358.73
8,200.00 1,304.00 2,014.50

45,355.00

123,947.00 29,067.00 60,728.00
9,215.00 10,062.00 117,845.00 51,842.00 34,968.36
1,671.63 180,358.73
8,200.00 1,304.00 2,014.50
45,355.00

21,451.00

21,451.00

24,892.00

28,100.00

24,892.00 28,100.00

3,650.00

3,650.00

See notes to the general-purpose financial statements.

$ 8,288,951.86 $ 140,253.36 $ 8,429,205.22 - 21 -

,---------~-----------~~~~~~-~-~--~-~-~--~--~-~--~-~-~-~-------------

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY GENERAL FUND - qUALITY BASIC EDUCATION PROGRAM (aBE)
EARNINGS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2001

SCHEDULE "3"

DESCRIPTION
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 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 III Category IV Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL)
TOTAL DIRECT INSTRUCTIONAL PROGRAMS
Media Center Program Staff and Professional Development

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE aBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

$

543,116.00 $ 588.241.07 $ 18.750.46 $ 606.991.53

45.127.00

114.256.89

114.256.89

1,402,404.00 1,493.299.15

77.573.57

1.570.872.72

143.589.00

160.572,86

160.572,86

775.088.00 1;084.342.97

54.822.46

1.139.165.43

233,437.24

12.831.76

246.269.00

1.399.361.00 1,478.079.40

91.281.66

1,569.361.06

1.170.103.00 .1.317.783.38

152.945.09

1,470.728.47

313.666,00

377.268.69

27.996.33

405.265.02

921.172.00

419,414.74

197.869.92

617.284.66

187.881.31

1.682.60

189,563.91

522.635.12 .

2.684.74

525,319.86

3.773.56

3,773.56

203',328.00

274,404.01

2.603.96

277,007.97

55.969,00

160,651.59

1.950.95

162.602.54

104.369.00

116,866.07

116,866,07

240.608.00

225,251.61

332.56

225.584.17

$

7,317.900.00 $ 8.758,159.66 $ 643.326.06 $ . 9,401,485.72

229.594.00 61.741.00

386.711.36 12.140.54

59.729.74 50.514.11

446,441.10 62.654.65

TOTAL aBE FORMULA FUNDS

$

7,609.235.00 $ 9.157.011.56 $ 753.569.91 $ 9.910.581.47

(1) Comprised of State Funds plus Local Five Mill Share.

See notes to the general-purpose financial statements.

- 22-

CITY OF BUFORD BOARD OF EDUCATION - GWINNETI COUNTY GENERAL FUND - OUALITY BASIC EDUCATION PROGRAM (OBE)
EARNINGS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2001

SCHEDULE "4"

SITE' Buford Academy Buford High School Buford Elementary School Buford Middle School Central Office (Alternative Education Program)
TOTAL
(1) .Comprised of State Funds plus Local Five Mill Share,

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE OBE . PROGRAM
COSTS

$

1,651,759.00 .$

2,168~337.65

1,792,893.00

2,476,928.74

1,848,579.00

2,208,671.13

1,920,300.00

2,352,654.96

104,369.00

194,893.24

$

7,317,900.00 $ =====9=,4=,0,=:1=,4:::8=5,=:.7==2

..J
See notes to the general-purpose financial statements. - 23-

SECTION II COMPLIANCE AND IN:rERNAL CONTROL REPORTS

RIISSEI.I. \\'. HI:-'TON
STATE AUDITOR 1404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street. S.w.. Suite 214 Atlanta. Georgia 30334-X400
March 6, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Buford Board of Education
REPORT ON COMPLIANCE' AND ON INTERNAL CQNTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of City ofBuford Board ofEducation as of and for the year ended June 30, 2001, and have issued our report thereon dated March 6, 2002. This report was qualified for various departures fr~m generally accepted accounting principles, as identified in the auditor's report on the general-purpose financial statements. We conducted ouraudit 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, issuea by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether City of Buford Board of Education's financial statements are free. of material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly; we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered City of Buford Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressIng our opinion on the financial statements and not to provide assurance on the internal
2001YB-41

control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in our judgment, could adversely affect City of Buford Board of Education's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompanying Schedule ofFindings and Questioned Costs as item FS-7641-0 1-01.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we consider item FS-7641-01-01 to be a material weakness.
This report is intended solely for the information and use ofthe management, members ofthe City of Buford Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to he and should not be used by anyone other than these specified parties.
Respectfully submitted,

RWH:gp 2001 YB-41

State Auditor

RllSSEl.1. \V. HI:\TOf';
STATE AUDITOR (404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
25.t Washington Street. S.W. Suite 214 Atlanta. Georgia 30334-K400
March 6, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board ofEducatiori
and Superintendent and Members of the City of Buford Board of Education

REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133

Ladies and Gentlemen:

Compliance

We have audited the compliance ofCity ofBuford Board of Education with the types of-compliance

u.s. requirements described in the

Office of Mandgement and Budget (OMB) Circular A-133

Compliance Supplement that are applicable to each of its major Federal programs for the year ended

June 30, 2001. City of Buford Board of Education's major Fed~ral 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 Buford Board of Education's

management. Our responsibility is to express an opinion on City of Buford Board of Education's

compliance based on oUf audit.

.

We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and OMB Circular A133, Audits of States, Local' Governments, and Non-Profit Organizations. Those standards and OMB Circular A-I33 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the City of Buford Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on City of Buford Board of Education's compliance with those requirements.

200ISA-IO

In our opinion, the City of Buford 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, 2001.
Internal Control Over Compliance
The management of City of Buford 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 ofBuford Board ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-l33.
(
Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively ldw level of risk that noncompliance with applicable requirements of ll:lws, regulations, contnlcts and grailts that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended solely for the information and use ofthe management, members ofthe City of Buford Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
~~4el.l W,. HinetonrLW' ~ State Auditor
RWH:gp 2001SA-10

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

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS . .

FS':7641-99-01 FS-7641-00-01

Further Action Not Warranted Unresolved - See Corrective Action/Responses

CORRECTIVE ACTIONIRESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7641-00-01

Due to current staffing limitations and budgetary considerations prohibiting the hiring of additional administrative staff, the School District has decided not to pursue the recording of general fixed assets on the financial statements.

SECTION IV FINDINGS AND QUESTIONED COSTS

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001
SUMMARY OF AUDITOR'S RESULTS
1. Type of Report Issued on the Financial Statements The auditor's opinion on the City of Buford Board of Education's financial statements was qualified for variolls departures from generally accepted accounting principles..
2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the City of Buford Board of Education disclosed a financial statement reportable condition related to the following control category.
General Fixed Assets
The reportable condition described above is considered to be a material weakness.
3. Noncompliance Material to the Financial Statements T~e audit ofthe City ofBuford Board of Education disclosed no instances ofnoncompliance that were deemed to be material to the financial statements.
4. Reportable Conditions in Internal Control Over Major Programs The audit report for the City of Buford Board Of Education did not disclose aiJ.ireportable conditions in internal control over major programs.
5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the City ofBuford Board ofEducation's report on compliance with requirements applicable to major programs was unqualified.
6. Audit Findings Required to be Reported by Section .51O{a) ofOMB Circular A-B3 The City of Buford Board of Education's audit did not disclose audit findings required to be reported by section .510(a) ofOMB Circular A-B3.
7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program
8.. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
9. Low Risk Auditee The City of Buford Board of Education qualified as a low risk auditee based on a waiver granted by the U. S. Department of Education.
- 1-

"
CITY OF BUFORD BOARD OF EDUCATION' GWINNETT COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-764l-0l-0l The City of Buford Board of Education did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general-purPose financial statements ofthe School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the School District and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed recor~s should be maintained of all additions and deletions to the General Fixed Assets Account Group. Management's Response: We concur with this recommendation. Due to current staffing limitations and budgetary considerations prohibiting the hiring of additional administrative staff the Board has decided not to pursue the recording of general fixed assets on the financial statements. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.
-2-