CITY OF BUFORD BOARD OF EDUCATION
A COMPONENT UNIT OF THE CITY OF BUFORD, 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 BUFORD BOARD OF EDUCATION - GWINNETT 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

B

STATEMENT OF ACTIVITIES

FUND FINANCIAL STATEMENTS

C

BALANCE SHEET

GOVERNMENTAL FUNDS

D

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET ASSETS

E

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES

GOVERNMENTAL FUNDS

F

RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT

OF REVENUES, EXPENDITURES AND CHANGES IN FUND

BALANCES TO THE STATEMENT OF ACTIVITIES

G

STATEMENT OF FIDUCIARY NET ASSETS

FIDUCIARY FUNDS

H

NOTES TO THE BASIC FINANCIAL STATEMENTS

SCHEDULES

REQUIRED SUPPLEMENTARY INFORMATION

1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND

Page
1 2 4 5 6 7 8 9
23

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

SECTION I

FINANCIAL

SCHEDULES

SUPPLEMENTARY INFORMATION

2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

24

3 SCHEDULE OF STATE REVENUE

25

4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

26

5 ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

BY PROGRAM

27

SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
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
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

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY -TABLE OF CONTENTS -
SECTIONV MANAGEMENT'S RESPONSES SCHEDULE OF MANAGEMENT'S RESPONSES

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
August 10, 2009

Honorable Sonny Perdue, Governor Members ofthe General Assembly Members of the State Board of Education
and Superintendent and Members ofthe City of Buford 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) of the City of Buford Board of Education, a component unit of the City of Buford, Georgia as of and for the year ended June 30, 2008, which collectively comprise the Board's basic financial statements as listed in the table of contents. These financial statements are the responsibility ofthe City ofBuford Board of Education's management. Our responsibility is to express opinions on these 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 GovernmentAuditing 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 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 Buford 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 opinions.

2008ARL-11

In our opinion, the financial statements referred to previously present fairly, in all material respects, the respective financial position ofthe governmental activities, each major fund, and the aggregate remaining fund information ofthe City ofBuford Board ofEducation, 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 August 10, 2009, on our consideration of the City of Buford 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 ix and page 23 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 Buford 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, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.
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,
~v.,,Oi ~-
Russell W. Hinton, CPA, CGFM State Auditor
RWH:as 2008ARL-11

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2008
The discussion and analysis of the City of Buford School District's financial performance provides an overall review of the School District's financial activities for the fiscal year ended June 30, 2008. The intent of this discussion and analysis is to look at the School District's financial performance as a whole. Readers should also review the financial statements and the notes to the basic financial statements to enhance their understanding of the School District's financial performance.
Financial Highlights
Key financial highlights for fiscal year 2008 are as follows:
The School District's financial status increased during fiscal year 2008. Net assets increased approximately $4.4 million. This increase was due to an increase in the allotment received from City of Buford Government and increase in SPLOST revenues and construction in progress.
General revenues and special item accounted for $21.1 million in revenue, or 54.6 percent of all revenues. Program specific revenues in the form of charges for services and sales, grants and contributions accounted for $17.5 million or 45.4 percent of total revenues. Total revenues were $38.6 million.
The School District had $34.2 million in expenses related to governmental activities; only $17.5 million of these expenses were offset by program specific charges for services, grants or contributions. General revenues of $21.1 million wei:e adequate to provide for these programs.
Among major funds, the general fund had $34.3 million in revenues and other financing sources and $33.3 million in expenditures. The general fund's balance increased to $6.2 million from $5.2 million.
Using the Basic Financial Statements
This annual report consists of a series of financial statements and notes to those statements. These statements are organized so the reader can understand the City of Buford Board of Education as a financial whole, or as an entire operating entity.
The Statement ofNet Assets and Statement ofActivities provide information about the activities of the School District as a whole, presenting both an aggregate view of the School District's finances and a longer-term view of those finances. The fund financial statements provide the next level ofdetail. For governmental funds, these statements tell how services were financed in the short-term as well as what remains for future spending. The fund financial statements also look at the School District's most significant funds. In the case of the City of Buford Board of Education, the general fund is the most significant fund.
1

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2008
Reporting the School District as a Whole
Statement ofNet Assets and Statement ofActivities
While these documents contain the large number of funds used by the School District to provide programs and activities, the view of the School District as a whole looks at all financial transactions and asks the question, "How did we do financially during fiscal year 2008?" The Statement ofNet Assets and the Statement ofActivities answer this question. These statements include all assets and all liabilities using the accrual basis of accounting similar to the accounting used by most private-sector companies. This basis of accounting takes into account all ofthe current year's revenues and expenses regardless ofwhen cash is received or paid.
These two statements report the School District's net assets and changes in those assets. This change in net assets is important because it tells the reader whether, 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 result of many factors, some financial, some not. Nonfinancial factors include the School District's local allotments base, facility conditions, required educational programs and other factors.
In the Statement of Net Assets and the Statement of Activities, the School District has one distinct type ofactivity:
Governmental Activities - All of the School District's programs and services are reported here including instruction, support services, operation and maintenance of plant, pupil transportation, food service, after school program, school activity accounts and various others.
Reporting the School District's Most Significant Funds
Fund Financial Statements
Fund financial reports provide detailed information about the School District's major funds. The School District uses two funds to account for a multitude of financial transactions. However, these fund financial statements focus on the School District's most significant funds. The School District's major governmental funds are the General Fund and the District-wide Capital Projects Fund.
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 an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the School District's general government operations and the basic services it provides. Governmental fund information helps you determine whether there are more or fewer
11

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

financial resources that can be spent in the near future to finance educational programs. The relationship (or differences) between governmental activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental/unds- is reconciled in the financial statements.

Fiduciary Funds: The School District is the trustee, or fiduciary, for assets that belong to others, such as school clubs and organizations within the school activity 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 District-wide financial statements because it cannot use these assets to finance its operations.

The School District as a Whole

The perspective of the Statement of Net Assets is of the School District as a whole. Table 1 provides a summary of the School District's net assets for fiscal year 2008 compared to fiscal year 2007.

Table 1 Net Assets

Governmental Activities

Fiscal

Fiscal

Year 2008

Year 2007

Assets Current and Other Assets Capital Assets, Net

$ 21,880,905 $ 12,127,270

42,027,450

31,367,756

Total Assets

$ 63,908,355 $ 43,495,026

Liabilities Current and Other Liabilities Long-Term Liabilities

$ 6,860,661 $ 4,465,360

13,633,829

56,585

Total Liabilities

$ 20,494,490 $ 4,521,945

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

$ 35,638,868 532,103
7,242,894

$ 31,367,756 2,132,816 5,472,509

Total Net Assets

$ 43,413.865 $ 38,973.081

Total net assets increased approximately $4.4 million.

lll

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2008
Chart 1 provides a visual summary of the School District's net assets for fiscal year 2008.
Chart 1 Net Assets

50%

Current and Other Assets
Capital Assets, Net
D Current and Other Liabilities
D Long-Term Liabilities

Chart 2 shows revenues and special item for fiscal year 2008. Chart 2 Revenues and Special Item

0.1%

39.9%

Charges for Services and Sales
Operating Grants and Contributions
Capital Grants and Contributions
Property Tax
SPLOST

Allotment from City Government
Investment Earnings

Miscellaneous

lV

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2008
Chart 3 shows expenditures for the School District for fiscal year 2008.
CHART 3 EXPENDITURES
Instruction Pupil Services Improvement oflnstructiona I
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
V

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

Table 2 shows the changes in net assets for fiscal year 2008 compared to the changes in net assets for fiscal year 2007.

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

Year2008

Year 2007

$ 2,353,560 15,160,703
202395

$ 1,975,555 13,493,837
1122512

Total Program Revenues

$ 175342658 $ 155812904

General Revenues:

Taxes

Property Taxes

For Maintenance and Operations

$ 9,856,774

Sales Taxes

Special Purpose Local Option Sales Tax

For Capital Projects

3,173,395

Investment Earnings

431,263

Miscellaneous

538,140

Special Item

Transfer from City Government

721112527

$ 9,958,050
602,331 143,146 776,690
52943A06

Total General Revenues and Special Item

$ 2121112099 $ 17A232623

Total Revenues

$ 3826452757 $ 332005527

Program Expenses Instruction Support Services Pupil Services
Improvement oflnstructional Services Educational Media Services General Administration School Administration
Business Administration
Maintenance and OJ?eration ofPlant Student Transportation Services Central Support Services Other Support Services Operations ofNon-Instructional Services
Enterprise Operations Community Services Food Services

$ 22,086,397
1,705,396 310,917 540,462
1,220,054 2,065,226
218,941 2,347,702
845,543 2,158 3,630
1,167,407 297,249
123932891

$ 20,543,650
1,310,514 473,163 517,844
1,171,245 1,912,077
193,698 2,231,079
422,196 62,795
564,399
123332513

Total Expenses

$ 3422042973 $ 3027362173

Increase in Net Assets

$ 4.440.784 $ 2.269.354

vi

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

Governmental Activities

The Statement of Activities shows the cost of program services and the charges for services and grants offsetting those services. Table 3 shows, for governmental activities, the total cost of services and the net cost of services comparing fiscal year 2008 with fiscal year 2007. That is, it identifies the cost ofthese services supported by tax revenue and unrestricted State entitlements.

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
Total Expenses
The School District's Funds

Table3
Governmental Activities

Total Cost of Services

Fiscal

Fiscal

Year 2008

Year 2007

$22,086,397 $ 20,543,650

1,705,396 310,917 540,462
1,220,054 2,065,226
218,941 2,347,702
845,543 2,158 3,630

1,310,514 473,163 517,844
1,171,245 1,912,077
193,698 2,231,079
422,196 62,795

1,167,407 297,249
1,393,891

564,399 1,333,513

$ 34,204,973 $30,136,113

Net Cost of Services

Fiscal

Fiscal

Year2008

Year2007

$ 9,372,759 $ 9,433,466

1,511,343 150,578 237,137 762,022
1,450,986 213,367
1,641,043 654,227
9

1,232,762 285,210 178,639 693,748
1,244,283 187,767
1,465,473 131,711 62,795

560,581 53,033 63,230

99,087 139,328

$16,670,315 $ 15,154,269

The School District's governmental funds are accounted for using the modified accrual basis of accounting. Total governmental funds had revenues of$30.7 million, an allotment from the city in the amount of $7.1 million and the net proceeds received from the Gwinnett County School District for the advance funding of the SPLOST III Project were $13.1 million, for a total of $50.90 million in receipts. General Fund expenditures totaled $33.3 million and Capital Projects expenditures totaled $16.7 million. There was an increase of$5.6 million in the capital projects fund. The general fund had an increase of$1.0 million. The increase in the fund balance ofthe general fund for the year indicates that the School District had lower than expected cost.

General Fund Budgeting Highlights

The School District's budget is prepared according to Georgia law. The most significant budgeted fund is the General Fund.

vii

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

For the General Fund, the actual revenues and other financing sources were $34.3 million. The final actual expenditures were $33.3 million. The School District was able to increase its financial reserves during fiscal year 2008 budget. The actual revenues and expenditures were above School District's final budget amounts.

Capital Assets and Debt Administration

Capital Assets

At the end of fiscal year 2008, the School District had $42 million invested in capital assets, all in governmental activities. Table 4 indicates balances at June 30, 2008.

Table 4 Capital Assets (Net of Depreciation)

Governmental Activities

Fiscal

Fiscal

Year 2008

Year 2007

Construction in Progress Buildings Equipment Land Improvements

$ 11,775,911 29,092,626 1,077,589 81,324

$ 426,111 29,675,301 1,146,085 120,259

Total

$ 42.027_450 $ 31,367,756

Debt

Table 5 shows the School District's debt.

Table 5 Debt at June 30

Governmental Activities

Fiscal

Fiscal

Year 2008

Year 2007

Compensated Absences Intergovernmental Agreement

$

58,682 $

13,575,147

56,585

Total

$ 13,633.829 $=="'=56'=",5'=='8='=5

Vlll

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2008
Current Issues
The City ofBuford School District is buffered from some of the financial hardships other School Districts experience by the financial support of a well run and fiscally responsible city government. However, changes in the student clientele, state and Federal regulations, and legal requirements continue to impact system operations and finance.
With 2008 state mandates the School District had to substantially increase the budget for fiscal year 2008 by approximately $2.3 million.
With the increase in 2008 ofrevenues, the School District was able to increase the ending fund equity to provide for a stable financial future and absorb some of the downturn in the economy.
The School District has employed appropriate personnel and funded all programs adequately.
The School District began to receive payments from SPLOST in July of fiscal year 2008. The amount to be received from Hall County is $3 million and approximately $18.7 million from Gwinnett County.
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 information, contact Mrs. Angela Adams, Director of Finance, City of Buford School District, 70 Wiley Drive, Buford, Georgia 30518. You may also email your questions to angela.adams@bufordcityschools.org.

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY STATEMENT OF NET ASSETS JUNE 30, 2008

EXHIBIT"A"

ASSETS
Cash and Cash Equivalents Accounts Receivable, Net
Taxes State Government Federal Government Local Government Other Inventories Prepaid Items Capital Assets, Non-Depreciable Capital Assets, Depreciable (Net of Accumulated Depreciation)
Total Assets
LIABILITIES
Accounts Payable Salaries and Benefits Payable Payroll Withholdings Payable Contracts Payable Retainages Payable 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
Continuation of Federal Programs Debt Service Capital Projects Unrestricted
Total Net Assets
Total Liabilities and Net Assets

GOVERNMENTAL ACTIVITIES

$

5,517,460.51

1,761,228.02 1,895,336.95
564,704.10 12,089,607.13
140.00 20,302.44 32,125.75 11,775,911.33 30,251,538.89

$ ===63='=90=8=,3=5=5.=1=2

$

1,377,406.70

3,296,839.09

120,232.29

1,160,406.00

905,777.00

58,682.29 13,575,147.20

$

20,494,490.57

$

35,638,868.10

25,312.78 427,951.81
78,838.56 7,242,893.30

$

43,413,864.55

$ ===63..,.9=0=8=,3=5=5.=12=

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

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT 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
Total Governmental Activities
General Revenues Taxes Property Taxes For Maintenance and Operations Sales Taxes Special Purpose Local Option Sales Tax For Capital Projects Investment Earnings Miscellaneous
Special Item Transfer from City Government
Total General Revenues and Special Item
Change in Net Assets
Net Assets - Beginning of Year
Net Assets - End of Year

EXPENSES

CHARGES FOR SERVICES

$

22,086,397.03 $

1,705,395.76 310,917.41 540,462.35
1,220,053.81 2,065,226.26
218,940.67 2,347,701.93
845,543.26 2,158.28 3,629.61

1,167,407.45 297,248.69
1,393,891.25

$

34,204,973.76 $

1,043,715.73
602,352.23 244,216.10 463,276.24 2,353,560.30

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

EXHIBIT"B"

PROGRAM REVENUES OPERATING GRANTS AND
CONTRIBUTIONS

CAPITAL GRANTS AND CONTRIBUTIONS

NET (EXPENSES) REVENUES
AND CHANGES IN NET ASSETS

$

11,669,922.23

194,053.07 160,339.74 303,325.66 458,031.37 614,239.79
5,573.79 706,658.57 170,920.87 $
2,158.28 3,620.57

4,473.74

867,385.32

$

15,160,703.00 $

$ 20,395.00 20,395.00 $

-9,372,759.07
-1,511,342.69 -150,577.67 -237,136.69 -762,022.44
-1,450,986.47 -213,366.88
-1,641,043.36 -654,227.39 0.00 -9.04
-560, 581 .48 -53,032.59 -63,229.69
-16,670,315.46

$

9,856,774.46

3,173,395.39 431,262.58 538,139.75

7 111 526.83

$

21 111 099.01

$

4,440,783.55

38,973,081.00

$ ===4='3,=4=13=,8=6=4=.5=5

-3-

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30, 2008

EXHIBIT"C"

ASSETS
Cash and Cash Equivalents Accounts Receivable, Net
Taxes State Government Federal Government Local Other Inventories Prepaid Items

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

TOTAL

$ 5,618,799.21

$

76,651.53 $ 1,895,336.95
564,704.10 2,756,681.79
140.00 20,302.44 32,125.75

527,951.81 9,332,925.34

5,618,799.21
604,603.34 1,895,336.95
564,704.10 12,089,607.13
140.00 20,302.44 32,125.75

Total Assets

$ 10,964,741.77 $ 9,860,877.15 $===2=0,=82=5=,6=1=8=.9==2

LIABILITIES AND FUND BALANCES
LIABILITIES
Cash Overdraft Accounts Payable Salaries and Benefits Payable Payroll Withholdings Payable Contracts Payable Retainages Payable
Total Liabilities
FUND BALANCES
Reserved for: Continuation of Federal Programs Debt Service Inventories Capital Projects
Unreserved Designated for Student Activities Undesignated Reported in: General Fund
Total Fund Balances

$ 101,338.70 $ $ 1,377,406.70
3,296,839.09 120,232.29 1,160,406.00 905,777.00
$ 4,794,478.08 $ 2,167,521.70 $

101,338.70 1,377,406.70 3,296,839.09
120,232.29 1,160,406.00
905 777.00
6,961,999.78

$

5,010.34

$

$ 427,951.81

20,302.44

7,265,403.64

466,635.81

5,678,315.10

$ 6,170,263.69 $ 7,693,355.45 $

5,010.34 427,951.81
20,302.44 7,265,403.64
466,635.81
5,678,315.10
13,863,619.14

Total Liabilities and Fund Balances

$ 10,964,741.77 $ 9,860,877.15 $==2=0..,,8=2=5'=61=8=.9=2

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

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT 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:
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, 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:
Intergovernmental Agreement Compensated Absences
Total Long-Term Liabilities
Net Assets of Governmental Activities (Exhibit "A")

$ 13,863,619.14

$ 11,775,911.33 584,027.08
34,696,307.00 2,589,009.00 -7,617,804.19

42,027,450.22

1,156,624.68

$ -13,575, 147.20 -58,682.29

-13,633,829.49

$ 43,413,864.55

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

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT 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 Service
Principal
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Intergovernmental Agreement Proceeds Transfer from City Government
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

TOTAL

$ 9,055,139.78 $
13,377,547.29 1,803,550.71 2,353,560.30 36,431.31 547,911.69
$ 27,174,141.08 $

$ 3,173,395.39
394,830.97

9,055,139.78 3,173,395.39 13,377,547.29 1,803,550.71 2,353,560.30
431,262.28 547 911.69

3,568,226.36 $ 30,742,367.44

$ 21,228,794.74 $

13,253.00 $ 21,242,047.74

1,720,686.56 310,234.94 540,462.35
1,169,639.81 2,058,088.29
218,453.85 2,395,683.15
894,663.04 2,158.28 3,629.61
1,167,407.45 297,248.69
1,316,594.46

11,535,344.11

1,720,686.56 310,234.94 540,462.35
1,169,639.81 2,058,088.29
218,453.85 2,395,683.15
894,663.04 2,158.28 3,629.61
1,167,407.45 297,248.69
1,316,594.46 11,535,344.11

5,124,852.80

5,124,852.80

$ 33,323,745.22 $ 16,673,449.91 $ 49,997,195.13

$ -6 149 604.14 $ -13, 105,223.55 $ -19,254,827.69

$ 18,700,000.00 $ 18,700,000.00

$ 7,111,526.83

7,111,526.83

$ 7,111,526.83 $ 18,700,000.00 $ 25,811,526.83

$

961,922.69 $ 5,594,776.45 $ 6,556,699.14

5,208,341.00

2,098,579.00

7,306,920.00

Fund Balances - Ending

$ 6,170,263.69 $

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

-6-

7,693,355.45 $ 13,863,619.14

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT 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.
In the Statement of Activities, only the loss on the sale of equipment is reported, whereas in the Governmental Funds, the entire proceeds from the sale increase financial resources. Thus, the change in net assets differs from the change in fund balances by the carrying value of the equipment sold.
Proceeds from an intergovernmental agreement are recorded in the Governmental Funds as an other financing source. However, in the Statement of Net Assets the net balance of these funds is reported as a Long-Term Liability.
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:
Intergovernmental Agreement Retirements
Some items reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in Governmental Funds. These activities consist of:
Increase in Compensated Absences

$ 6,556,699.14

$ 11,541,002.41 -871,536.25

10,669,466.16

801,634.68

-9,771.94

-18,700,000.00

5,124,852.80 -2 097.29

Change in Net Assets of Governmental Activities (Exhibit "B")

$ 4,440,783.55

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

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT 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
$ ==20=,7=7=9=.3=1
$ ==20=,7=7=9=.3=1

The notes to the basic financial statements are an integral part of this statement. -8-

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT 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 ofBuford Board of Education (School District) was established under the laws ofthe State ofGeorgia and operates under the guidance ofa 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 Board 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 determined to be a component unit of the City of Buford, Georgia, which is the primary government.
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 ofthe City of Buford Board of Education.
District-wide Statements: The Statement ofNet Assets and the Statement ofActivities display information about the financial activities ofthe 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 ofthe School District's programs, such as office and maintenance personnel and accounting) are not allocated to programs.
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.

-9 -

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

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 ofthe 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) to be used for the acquisition, construction or renovation of major capital facilities.
The School District reports the following fiduciary fund type:
Agency funds account for assets held by the School District as an agent for various funds, governments or individuals.
BASIS OF ACCOUNTING
The basis ofaccounting 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.
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 ofaccounting. 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 and compensated absences, 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 are reported as other financing sources.

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

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The School District funds certain programs by a combination ofspecific 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 ofcash 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 authorize 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.

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 ofBuford Board of Commissioners fixed the property tax levy for the 2007 tax digest year (calendar year) on August 13, 2007 (levy date). Taxes were due on November 20, 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 City of Buford City Clerk bills and collects the property taxes for the School District and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2008, for maintenance and operations amounted to $9,055,139.78.

The tax millage rate levied for the 2007 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

13.3 mills

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

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SALES TAXES
Special Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $3,173,395.39 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 ofmeals 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.
PREPAID ITEMS
Payments made to vendors for services that will benefit periods subsequent to June 30, 2008, are recorded as prepaid items in both District-wide and fund financial statements.
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 were known to the School District.
Capitalization thresholds and estimated useful lives of capital assets reported in the District-wide statements are as follows:

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CITY OF BUFORD BOARD OF EDUCATION - GWINNETT 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

$ 5,000.00

NIA

$ 5,000.00

15 years

$ 5,000.00

60 years

$ 5,000.00 5 to 15 years

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

COMPENSATED ABSENCES

Members ofthe Teachers Retirement System ofGeorgia (TRS) may apply unused sick leave toward early retirement. The liability for early retirement will be borne by TRS rather than by the individual school districts. Otherwise, sick leave does not vest with the employee, and no liability is reported in the School District's financial statements.

Prior to March 15, 2004, vacation leave not utilized during a fiscal year could be carried over to the next fiscal year. Vacation leave of 10 days was awarded on a fiscal year basis to all full-time personnel employed on a twelve month basis until they have reached 15 fiscal years of service. After 15 fiscal years ofservice, employees earned 15 days per fiscal year. No other employees were eligible to earn vacation leave. After March 15, 2004, employees are no longer allowed to carry over unused vacation leave from one fiscal year to the next, except for the vacation days carried forward prior to these changes in the Vacation Leave Policy.

The amount of compensated absences reported at June 30, 2008, is for the unused vacation leave days for twelve month employees earned and carried forward prior to the change in the School District's Leave Policy as ofJune 30, 2008. The compensated absence balance was calculated by the School District using the individual employees' current daily pay rate.

2006 2007 2008

Beginning Liability

Current Year Increase

Current Year Decrease

Ending Liability

$ 97,858.00 $

0.00 $ 44,846.00 $ 53,012.00

$

53,012.00 $

3,573.00 $

0.00 $ 56,585.00

$

56,585.00 $

2,581.63 $

484.34 $ 58,682.29

NET ASSETS

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

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

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
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.
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 ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. If a depository elects the pooled method (OCGA 45-8-13 .1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. At June 30, 2008, $308,839.05 of deposits were not secured by surety bond, insurance or collateral as specified above. The School District is working with the affected financial institutions to ensure appropriate levels of collateral are maintained for all of the School District's deposits.
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,

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CITY OF BUFORD BOARD OF EDUCATION - GWINNETT 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, 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 $6,008,571.61. 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.

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

$ 308,839.05

2

0.00

3

0.00

Total

$ 308!839.05

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

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

EXHIBIT "H"

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:
Construction in Progress
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

$ 426,111.00 $ 11,349,800.33 $

0.00 $11,775,911.33

$34,696,307.00 2,408,093.00 $ 584,027.00

191,202.00 $ 0.08

$ 34,696,307.00 10,286.00 2,589,009.00
584,027.08

5,021,006.00 1,262,008.00
463,768.00

582,675.28 249,925.60
38,935.37

$ 30,941,645.00 $ -680,334.17 $

$ 31,361,156 QQ $ I Q 662,466.16 $

514.06

5,603,681.28 1,511,419.54
502,703.37

9 771.94 $30,251,538.89

2,111.24 $ 42,Q21,4SQ 22

Current year depreciation expense by function is as follows:

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

$ 658,898.64

$

3,481.20

667.44

5,736.82

14,498.89

123,626.20

148,010.55 64,627.06

$ 871,536.25

Note 6: INTERFUND TRANSFERS

Interfund transfers for the year ended June 30, 2008, consisted of the following:

Transfers From City of Buford

$ 7.111,526.83

The School District receives supplemental funding from the City of Buford.

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

EXHIBIT"H"

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 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 acts of God. 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 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 of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

2007 2008

$

0.00 $

5,065.00 $

5,065.00 $

0.00

$

0.00 $

0.00 $

0.00 $

0.00

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

Position Covered

Amount

Superintendent Assistant Superintendent Principal

$ 50,000.00 $ 50,000.00 $ 3,000.00

Note 8: LONG-TERM DEBT

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 estimated. Typically, the General Fund is the fund used to liquidate this long-term debt. The School District uses the vesting method to compute compensated absences.

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

EXHIBIT"H"

Note 8: LONG-TERM DEBT

INTERGOVERNMENTAL AGREEMENT In March 2007, the Gwinnett County School District issued general obligations bonds in the amount of $425,000,000.00 to provide advance funding for Capital Outlay projects associated with the voters' approval of a Special Purpose Local Option Sales Tax ("SPLOST"). Per an Intergovernmental Agreement signed on August 4, 2006, between the Gwinnett County School District ("Gwinnett") and the City of Buford Board of Education ("Buford"). Gwinnett agreed to provide advance funding of $18,700,000.00 of proceeds from the general obligation bonds to Buford. In exchange, Buford agreed to relinquish upon receipt from the State of Georgia, its share ofproceeds from the SPLOST. The agreement also allows for a reduction in this advance funding for any deficiency of collected funds from advance of funds related to the prior SPLOST project.

In fiscal year 2008, Gwinnett provided the advance funding of$18,700,000.00; net of$2,985,471.74, related to the deficiency of the prior SPLOST project collection. SPLOST proceeds of $2,139,381.06 were received and remitted by Buford to Gwinnett during the fiscal year. The remaining advance funding proceeds of$13,575,147.20 are reported as long-term debt on the School District's Statement of Net Assets.

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

Governmental Funds

Inter-

Compensated Governmental

Absences

Agreement

Balance July 1, 2007

$ 56,585.00 $

0.00

Additions Annual Leave Earned Intergovernmental Agreement

2,581.63 18,700,000.00

Deductions Annual Leave Utilized Debt Retired

484.34

5,124,852.80

Balance June 30, 2008

$ 58,682.29 $ 13,575,147.20

Portion of Long-Term Debt Due within One Year

$ 58,682.29

(1)

(1) Per the Intergovernmental Agreement with the Gwinnett County School District, the portion oflong-term debt due within one year is equal to Special Purpose Local Option Sales Tax collections to be made by the School District in the subsequent fiscal year. It is not possible to determine the specific amount ofthese funds to be collected.

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

EXHIBIT"H"

Note 9: ON-BEHALF PAYMENTS

The School District has recognized revenues and costs in the amount of $630,060.29 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 $627,570.29

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 $2,490.00

Note 10: SIGNIFICANT COMMITMENTS

The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2008:

Project

Unearned Executed Contracts

Buford Academy Additions Buford High School Additions

$ 564,725.15 4,071,052.10

$ 4,635,777.25

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

Note 11: 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.

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

EXHIBIT "H"

Note 12: 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 ofCommunity 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 ofthe 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 ofCommunity Health at 2 Peachtree Street, Atlanta, Georgia 30303.

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 $2,622,402.47, which equaled the required contribution, plus a portion ofthe employee's costs for health insurance coverage. For each employee who chose to enroll in any health insurance program offered through the School District, the School District paid the employee rate for a single person with the PPO option coverage.

Note 13: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

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

- 20 -

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

EXHIBIT "H"

Note 13: RETIREMENT PLANS

TRS CONTRIBUTIONS 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 9.28% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2008 2007 2006

100% 100% 100%

$ 1,640,865.37 $ 1,473,726.00 $ 1,327,323.00

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CITY OF BUFORD BOARD OF EDUCATION - GWINNETT 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 Food Services Operation Enterprise Operations Community Service Operations
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Transfers From City Government
Net Change in Fund Balances
Fund Balances - Beginning
Adjustments

NONAPPROPRIATED BUDGETS

ORIGINAL (1)

FINAL (1)

ACTUAL AMOUNTS

$ 16,000,000.00 $ 11,833,148.00 1,330,633.00 1,163,950.00 20,550.00 20,150.00
$ 30,368,431.00 $

16,000,000.00 $ 12,491,343.00 1,330,633.00 1,163,950.00
20,550.00 20,150.00
31,026,626.00 $

9,055,139.78 13,377,547.29
1,803,550.71 2,353,560.30
36,431.31 547,911.69
27,174,141.08

$ 20,000,565.47 $
1,773,020.85 135,772.93 533,436.97
1,581,582.30 1,900,461.38
201,925.94 2,776, 152.48
851,100.91
1,292,542.52 352,435.60
$ 31,398,997.35 $
$ -1,030,566.35 $

20,561,605.14 $
1,857,197.25 393,816.03 532,889.81
1,236,671.72 2,006,805.74
212,983.94 2,649,689.48
877,384.85
11,944.25 1,292,542.52
352,435.60
31,985,966.33 $
-959,340.33 $

21,228,794.74
1,720,686.56 310,234.94 540,462.35
1,169,639.81 2,058,088.29
218,453.85 2,395,683.15
894,663.04 2,158.28 3,629.61
1,316,594.46 1,167,407.45
297,248.69
33,323,745.22
-6,149,604.14

$ -1,030,566.35 $ 4,972,953.38 38,836.94

-959,340.33 $ 4,948,285.58
481,274.05

7,111,526.83 961,922.69
5,208,341.00

Fund Balances - Ending

$ 3,981,223.97 $

4,470,219.30 $ ==6=",1=7=0.,.,2=6=3.=69=

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.

-23-

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT 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
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 State Grants for Innovative Programs Title 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) 1,201,852.03
1,201,852.03

10.550

N/A $

49 283.07 1,251,135.10

84.027

N/A

$

390,110.13

84.048
84.365 84.367 84.186
. 84.298 84.010

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

46,849.47 56,660.06 106,074.01 8,619.10
3,603.21 415,965.32
1,027,881.30

Total Federal Financial Assistance NIA = Not Available

$==2=27=9=,0=1=6=.4=0

Notes to the Schedule of Expenditures of Federal Awards

(1) The amount shown for the Food Donation 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 ($213,296.01) 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 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 fund financial statements.

See notes to the basic financial statements.

- 24 -

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2008

SCHEDULE "3"

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 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 Category I Category II Category 111 Category IV Category V 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 Nursing Services Vocational Supervisors Food Services Vocational Education Amended Formula Adjustment Other State Programs Graduation Coaches Health Insurance Remedial Summer Middle School Virtual Schools Grant
Office of Treasury and Fiscal Services Public School Employees Retirement

See notes to the basic financial statements.

- 25 -

GOVERNMENTAL FUND TYPE GENERAL FUND

$

895,357.00

84,057.00

2,163,076.00

179,367.00

876,537.00

56,858.00

1,664,838.00

1,451,244.00

328,314.00

227,380.00 112,428.00 936,924.00 162,080.00 291,094.00 385,435.00 56,141.00 132,476.00 435,721.00 289,815.00 87,358.00 53,534.00

436,893.00 562,263.00 682,288.00

130,644.00 20,395.00 35,802.00 67,291.00 8,663.00 61,094.00 25,788.00 -259,505.00
104,349.00 627,570.29
1,413.00 75.00

2,490.00

$ ===1=3,=37=7=,5=4=7=.2=9

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT 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)

AMOUNT EXPENDED
IN PRIOR YEARS (3)

PROJECT STATUS

Gwinnett County SPLOST Projects: equipping additional classrooms, instructional and support space and remodeling, renovating, and equipping existing classrooms, instructional and support space; acquiring, constructing and equipping a new middle school; additional classroom for elementary school; multi-purpose arena; technology improvements system-wide; purchasing buses; renovating existing building or administrative offices.

$ 14,669,048.00 $

18,583,253.39 $

2,236,983.39 $ 16,346,270.00 Ongoing

Gwinnett County SPLOST Projects: acquiring new sites for the construction of new schools, support facilities and athletic facilities and the expansion of existing school and support facilities; developing sites for constructing and equipping new schools, support facilities and athletic facilities; making additions to, acquiring or renovating, equipping and modernizing existing schools, support facilities and athletic facilities; making existing or new lease/purchase payments or payments with respect to the acquisition of new and existing schools and support facilities along with buses and other transportation vehicles; and modernizing technology and making system-wide technology improvements.

18,700,000.00

18,700,000.00

8,672,693.03

Ongoing

Hall County SPLOST Projects: acquiring, constructing and equipping additional classrooms, instructional and support space and remodeling, renovating, and equipping existing classrooms, instructional and support space; acquiring, constructing and equipping new middle schools; acquiring and installing technology improvements system-wide; and renovating existing school buildings and facilities.

3,000,000.00

3,000,000.00

600,000.00

Ongoing

$ 36,369,048.00 $ 40,283,253.39 $ 11,509,676.42 $ 16,346,270.00

(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 Gwinnett and Hall Counties 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.

-26-

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

SCHEDULE "5"

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 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 Category I Category II Category Ill 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) (2)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

$

1,140,713.00 $ 1,355,956.45 $

45,682.19 $

1,401,638.64

102,860.00

168,553.08

168,553.08

2,686,434.00

3,154,059.41

131,826.43

3,285,885.84

219,489.00

189,621.49

189,621.49

1,101,102.00

1,873,315.11

63,447.21

1,936,762.32

68,811.00 2,077,903.00 1,834,401.00
421,571.00 2,134,840.00
471,073.00 74,244.00
165,598.00 545 409.00

156,691.84 2,854,258.88 2,605,515.08
454,817.49
204,815.13 462.90
1,253,353.21 639,538.87 470,809.39 87,139.39 172,946.22 416577.12

130,532.66 192,113.65
35,535.42
305,870.82 773.68
3,005.78
308.47 1,139.99
332.19

156,691.84 2,984,791.54 2,797,628.73
490,352.91
510,685.95 1,236.58
1,256,358.99 639,538.87 471,117.86 88,279.38 172,946.22 416 909.31

$

13,044,448.00 $ 16,058,431.06 $

910,568.49 $ 16,968,999.55

363,038.00 68 228.00

499,749.30

27,202.39

526,951.69 63 211.14

TOTAL QBE FORMULA FUNDS

$

13 475 714.00 $ 16,558,180.36 $

937,770.88 $ 17,559,162.38

(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.

- 27 -

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
August 10, 2009

Honorable Sonny Perdue, Governor Members ofthe General Assembly Members ofthe State Board of Education
and Superintendent and Members of the City of Buford 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 Buford Board of Education as of and for the year ended June 30, 2008, which collectively comprise City of Buford Board of Education's basic financial statements and have issued our report thereon dated August 10, 2009. 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 of the United States.
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 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 on the effectiveness of the City of Buford Board of Education's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City of Buford Board of Education's internal control over financial reporting.
Our consideration ofinternal control over financial reporting was for the limited purpose described in the preceding paragraph and would not necessarily identify all deficiencies in internal control over financial reporting that might be significant deficiencies or material weaknesses. However, as discussed below, we identified certain deficiencies in internal control over financial reporting that we consider to be significant deficiencies.
2008YB-40

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 affects the City of Buford Board of Education'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 of the City of Buford Board of Education's financial statements that is more than inconsequential will not be prevented or detected by the City of Buford Board of Education's internal control. We consider items FS-7641-08-01, FS-7641-08-02, FS-7641-08-03, FS-7641-08-04 and FS-7641-08-05 in the accompanying Schedule of Findings and Questioned Costs to be significant deficiencies in internal control over financial reporting.
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 of Buford 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 and, accordingly, would not necessarily disclose all significant deficiencies that are also considered to be material weaknesses. However, of the significant deficiencies described above, we consider item FS-7641-08-05 to be a material weakness.
Compliance and Other Matters
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 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.
We noted certain matters that we have reported to management of City of Buford Board of Education in a separate letter dated August 10, 2009.
City of Buford Board of Education's response to the findings identified in our audit is described in the accompanying Schedule ofManagement's Responses. We did not audit City ofBuford Board of Education's response and, accordingly, we express no opinion on it.
2008YB-40

This report is intended solely for the information and use of management, members of the City of Buford Board of Education, 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-40

Ru sell 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
August 10, 2009

Honorable Sonny Perdue, Governor Members ofthe General Assembly Members ofthe State Board of Education
and Superintendent and Members ofthe City ofBuford Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133
Ladies and Gentlemen:
Compliance
We have audited the compliance ofCity ofBuford 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 ofits major Federal programs for the year ended June 30, 2008. City of Buford Board of Education's major Federal programs are identified in the Summary ofAuditor's Results Section ofthe accompanying Schedule ofFindings 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 our audit.
We conducted our audit ofcompliance 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 ofStates, 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 ofBuford 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 Buford Board of Education's compliance with those requirements.
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, 2008.
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 of Education'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 of Buford 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 of a 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 of control 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 of the 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 of the 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,
,- ~~~~nto~C~~~F~ State Auditor
RWH:as 2008SA-10

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

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT 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

FINDING CONTROL NUMBER AND STATUS

FS-7641-06-01 FS-7641-06-02 FS-7641-07-01 FS-7641-07-02 FS-7641-07-03 FS-7641-07-04

Further Action Not Warranted Further Action Not Warranted Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Partially Resolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/1.JABILITIES/DISBURSEMENTS Inadequate Internal Controls and Separation of Duties over School Activity Accounts Finding Control Number: FS-7641-07-01

The School District has implemented steps to ensure that internal controls and adequate separation of duties exist. These steps include meetings with individual school administration staffto review the procedures necessary to ensure separation ofduties exist. In addition, the school activity fund policy and procedure manual will be issued to all administrative personnel.

CAPITAL ASSETS Failure to Adequately Maintain Capital Assets Finding Control Number: FS-7641-07-02

The School District has implemented steps to ensure that capital assets are adequately maintained. These steps include a more in depth review of possible capital asset items from the fiscal year expenditure records. In addition, the School District capital assets policy and procedure manual will be revised to establish asset categories (including estimated useful lives), asset valuation methods, depreciation methods, and physical inventory count requirements.

- 1-

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT 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 CORRECTIVE ACTION/RESPONSES GENERAL LEDGER Inadequate Documentation and Approval of Journal Entries Finding Control Number: FS-7641-07-03 The School District has implemented steps to ensure adequate documentation and approval ofjournal entries. These steps include utilizing journal entry forms and attaching backup documentation. Each journal entry form has a place for preparer, entry and approval signatures. REVENUES/RECEIVABLES/RECEIPTS Inadequate Controls over Tuition Revenues Finding Control Number: FS-7641-07-04 We concur with this finding. The School District will implement steps to establish adequate accounting procedures to ensure that tuition revenues are completely and accurately reported within the financial statements. These steps include creating a master tuition student list for the School District. Each student will have a total amount due. When the school submits tuition each month the student's account will be updated. The school will be sent an updated balance for each student.
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.
-2-

SECTION IV FINDINGS AND QUESTIONED COSTS

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT 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 of Buford Board of Education's financial statements was unqualified.

2. Significant Deficiencies in Internal Control Disclosed by the Audit ofthe Financial Statements The audit report for the City of Buford Board of Education disclosed financial statement significant deficiencies related to the following control categories.

Cash and Cash Equivalents Revenues/Receivables/Receipts Capital Assets

Expenditures/Liabilities/Disbursements General Ledger Financial Reporting

Of the significant deficiencies described above, Financial Reporting is considered to be a material weakness.

3. Noncompliance Material to the Financial Statements The audit ofthe City ofBuford Board ofEducation disclosed no instances ofnoncompliance 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 of Buford 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 ofBuford 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) ofOMB Circular A-133 The City ofBuford 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: 84.010 Title I Grants to Local Educational Agencies 84.027 Special Education - Grants to States

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

9. Low Risk Auditee The City ofBuford Board ofEducation qualified as a low risk auditee as defined by Section .530 of 0MB Circular A-133.

- 1-

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2008

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Separation of Duties over School Activity Accounts Significant Deficiency Finding Control Number: FS-7641-08-01

Condition:

This is a repeat finding (FS-7641-07-01, FS-7641-06-01 andFS-7641-05-01) from the fiscal years ended June 30, 2007, June 30, 2006, and June 30, 2005, respectively. The accounting procedures of the School District were insufficient to provide for adequate separation of duties over the school activity accounts.

Criteria:

The School District's management is responsible for designing and maintaining internal controls that provide reasonable assurance that transactions are processed according to established procedures and provide assurance of proper separation of duties, which would limit any one individual's access to both physical assets and the related accounting records.

Questioned Cost: NIA

Information:

Cash and Cash Equivalents The bank reconciliation function was not separated from record keeping and voucher payment functions.

Revenues/Receivables/Receipts The deposit preparation function was not separated from record keeping and cash custody.

Expenditures/Liabilities/Disbursements The check writing functions were not separated from record keeping or processing of signed checks.

Cause:

These deficiencies were a result of management's failure to ensure that internal controls were established, implemented and functioning at the school level. The School District also has not assigned responsibilities to achieve appropriate separation of duties nor utilized management oversight of the incompatible activities to properly safeguard assets.

Effect:

Errors and/or irregularities may not be detected in a timely manner.

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CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2008

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Separation of Duties over School Activity Accounts Significant Deficiency Finding Control Number: FS-7641-08-01

Recommendation:

Management should revise and monitor controls to provide reasonable assurance that transactions are processed according to established procedures and ensure that the key accounting functions ofcustody, record keeping and authorization are separated and/or utilize management oversight of these incompatible activities.

CAPITAL ASSETS Failure to Properly Maintain Capital Assets Significant Deficiency Finding Control Number: FS-7641-08-02

Condition:

This is a repeat finding (FS-7641-07-02 and FS-7641-06-02) from the fiscal years ended June 30, 2007, and June 30, 2006, respectively. Adequate policies and procedures are not in place to ensure that capital assets are properly maintained.

Criteria:

Chapter 37 Fixed Assets of the Financial Management for Georgia Local Units of Administration provides that School Districts must establish fixed asset policies, define system requirements, implement a fixed asset system and maintain fixed asset inventory records.

Questioned Cost: NIA

Information:

A review ofthe School District's capital assets records noted deficiencies as discussed below:
The School District's capital assets policy does not properly address the following items: o Asset categories o Method of valuation of assets at time of acquisition o Depreciation methods o Estimated useful lives of assets o Physical inventory count requirements

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CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2008

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

CAPITAL ASSETS Failure to Properly Maintain Capital Assets Significant Deficiency Finding Control Number: FS-7641-08-02

School District personnel failed to correct the capitalized costs for two security systems placed in service in fiscal year 2007. The capitalized costs only included individual pieces of equipment that exceeded $5,000.00 and did not include all costs associated with the installation ofthe security systems. Capitalized costs totaling $112,559.00 remain unrecorded at June 30, 2008.
Based upon a review of equipment purchases, six items totaling $38,337.59 were for equipment items with a cost of$5,000.00 or more that were not capitalized during the current fiscal year.
School District personnel failed to adequately review accumulated depreciation and inappropriately applied depreciation expense to certain assets in the current fiscal year. As a result, $74,218.49 of depreciation expense was incorrectly recorded and reported for capital assets items that were fully depreciated at the start ofthe current fiscal year.
One bus was identified as having been disposed of but was not properly removed from the capital assets records.
The School District failed to perform a complete physical inventory for all capital assets during the current fiscal year.

Cause:

The School District failed to develop accounting policies and procedures necessary to accurately process, record and report capital assets and related activity.

Effect:

The failure ofthe School District to develop a complete capital assets policy can lead to inaccurate internal and external reporting, as well as noncompliance with generally accepted accounting principles.

Recommendation:

The School District should develop a formal capital assets policy which establishes asset categories (including estimated useful lives), asset valuation methods, depreciation methods, and physical inventory count requirements.

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CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2008

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

GENERAL LEDGER Inadequate Approval of Journal Entries Significant Deficiency Finding Control Number: FS-7641-08-03

Condition:

This is a repeat finding (FS-7641-07-03) from the fiscal year ended June 30, 2007. School District personnel did not ensure that journal entries were properly approved based on the policies and procedures established.

Criteria:

The School District's management is responsible for designing and maintaining internal controls that provide reasonable assurance that journal entries are properly approved, documented and processed.

Questioned Cost: NIA

Information:

There was no evidence provided to document that journal entries were reviewed and approved by someone independent ofthe general ledgerjournal entry function.

Cause:

These deficiencies were a result of management's failure to adequately monitor and implement procedures to ensure that journal entries are properly documented and approved before posting to the accounting records.

Effect:

The lack of adequate control over the journal entry process may result in errors in financial reporting and increases in the risk of material misstatements, including misstatements due to fraud.

Recommendation: The School District should strengthen internal controls over the journal entry process to ensure journal entries are properly approved.

REVENUES/RECEIVABLES/RECEIPTS Inadequate Internal Controls over Tuition Revenues Significant Deficiency Finding Control Number: PS-7641-08-04

Condition:

This is a repeat finding (FS-7641-07-04) from the fiscal year ended June 30, 2007. The accounting procedures ofthe School District were insufficient to ensure proper accounting and reporting for tuition revenues.

Criteria:

The School District's management is responsible for designing and maintaining internal controls that provide reasonable assurance that transactions processed are complete and accurate.

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CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2008

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

REVENUES/RECEIVABLES/RECEIPTS Inadequate Internal Controls over Tuition Revenues Significant Deficiency Finding Control Number: FS-7641-08-04

Questioned Cost: NIA

Information:

A review of tuition revenue revealed that the School District did not have proper internal controls in place to detect errors and ensure the completeness of tuition revenues. Tuition revenues for students attending Buford City Schools and the Buford City Employee Child Care Center are collected at decentralized locations (school level). Funds collected at the school level are remitted to the Central Office to be recorded on the General Ledger. However, there are no formal control procedures in place to ensure that all funds collected are properly accounted for and recorded on the central office's general ledger.

Cause:

These deficiencies were a result ofmanagement's failure to adequately ensure that accounting policies and procedures were in place to properly monitor tuition revenue.

Effect:

Errors and/or irregularities may not be detected in a timely matter and the potential exists for the misstatement ofrevenues on the financial statements, including the risk of misstatement due to fraud.

Recommendation:

The School District should establish adequate accounting procedures to ensure that tuition revenue is completely and accurately reported within the Board's financial statements.

FINANCIAL REPORTING Deficiencies in Financial Statement Preparation Material Weakness Finding Control Number: FS-7641-08-05

Condition:

The School District's accounting procedures were insufficient to provide for adequate controls over the financial statements preparation process.

Criteria:

A system of internal control over financial reporting does not stop at the general ledger. Management is responsible for implementing a system of internal control over the preparation of financial statements, including the financial statements and appropriate note disclosures.

Questioned Cost: NIA -6-

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2008

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINANCIAL REPORTING Deficiencies in Financial Statement Preparation Material Weakness Finding Control Number: FS-7641-08-05

Information:

The auditors provided significant assistance to the School District in the preparation of the financial statements. As noted below, numerous entries and corrections to the financial statements were proposed by the auditors. The following deficiencies were noted in the School District's financial statements.
Various corrections were proposed and made by auditors to the Basic Financial Statements: o An audit entry was proposed and accepted by the School District to record Special Purpose Local Option Sales Tax (SPLOST) revenues which were understated by $727,064.67. This was due to general ledger posting errors with a net total of $199,112.86 and failure to accrue $527,951.81 in revenues earned during the fiscal year and received in the subsequent period. The effect ofthis adjustment was material to the Capital Projects Fund. o An audit entry was proposed and accepted by the School District to correct an error in the recording of Principals' Accounts activity on the School District's general ledger. The effect of this error was an overstatement of cash and equivalents of$488,727.95 on the Statement ofNet Assets and the General Fund and $9,008.11 in Agency Funds. The effect of this adjustment is material to the aggregate remaining fund information. o An audit entry was proposed and accepted by the School District to correct an omission in the recording ofactivity from the primary government (City ofBuford, Georgia). The School District did not record disbursements made on its behalfby the primary government totaling $789,655.24. The result of this omission was an overstatement of accounts receivable and an understatement ofexpenditures. The effect ofthis adjustment is material to the Capital Projects Fund. o An audit entry was proposed and accepted by the School District to correct an error in calculation ofdelinquent property taxes at June 30, 2008. The effect of this error was an understatement of property tax revenues and receivable of $451,300.28 on the District-wide financial statements.

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CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2008

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINANCIAL REPORTING Deficiencies in Financial Statement Preparation Material Weakness Finding Control Number: FS-7641-08-05

o An audit entry was proposed and accepted by the School District to correct an error in the functional allocation of depreciation expense on the Statement of Activities. $597,016.96 in depreciation expense was allocated to the Capital Outlay function, which is not reported on the Statement ofActivities. A correction was made to allocate these expenses to their proper function.
o A correction was proposed and made to the amount shown for Accumulated Depreciation on the Reconciliation of the Governmental Funds Balance Sheet to the Statements of Net Assets (Exhibit D) which did not agree with the amount reported in Note 5: Capital Assets.
o A correction was proposed and made to the amount shown for Capital Outlay and Depreciation Expense on the Reconciliation of the Governmental Funds Statements of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities (Exhibit F) which did not agree with the amount reported in Note 5: Capital Assets.

Various corrections were proposed and made by auditors to the Notes to the Basic Financial Statements.

Various corrections were proposed and made by auditors to the Required Supplementary Information.

Various corrections were proposed and made by auditors to the Supplementary Information.

Cause:

The School District's management failed to adequately review the year-end financial statements to ensure that the statements as presented for audit were accurate and properly supported by underlying accounting records.

Effect:

The School District does not have adequate controls in place to ensure that the financial statements are properly prepared in accordance with generally accepted accounting principles.

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CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2008

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINANCIAL REPORTING Deficiencies in Financial Statement Preparation Material Weakness Finding Control Number: FS-7641-08-05

Recommendation:

The School District should review the accounting controls and procedures currently in place, identify weaknesses, and design and implement procedures necessary to strengthen controls over the preparation of the financial statements, including appropriate note disclosures.

III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

No matters were reported.

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SECTION V MANAGEMENT'S RESPONSES

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY SCHEDULE OF MANAGEMENT'S RESPONSES YEAR ENDED JUNE 30, 2008
Finding Control Number: FS-7641-08-01
We concur with this finding. The School District has implemented steps to ensure that internal controls and adequate separation of duties exist. These steps include meetings with individual school administration staffs to review the procedures necessary to ensure separation ofduties exist. In addition, the school activity fund policy and procedure manual will be issued to all administrative personnel. The School District anticipates correcting this inadequate separation of duties by December 2009.
Finding Control Number: FS-7641-08-02
We concur with this finding. The School District has implemented steps to ensure that capital assets are adequately maintained. These steps include a more in depth review of possible capital assets items from the fiscal year expenditure records. In addition, the School District capital asset policy and procedure manual will be revised to establish asset categories (including estimated useful lives), asset valuation methods, depreciation methods, and physical inventory count requirements. The School District anticipates correcting this failure to adequately maintain capital assets by January 2010.
Finding Control Number: FS-7641-08-03
We concur with this finding. The School District has implemented steps to ensure adequate documentation and approval of journal entries occur. These steps include utilizing journal entry forms and attaching backup documentation. Each journal entry form has a place for preparer, entry and approval signatures. The School District will implement approval process ofjournal entries outside of the finance department as of September 2009.
Finding Control Number: FS-7641-08-04
We concur with this finding. The School District will continue to implement steps to establish adequate accounting procedures to ensure that tuition revenue is completely and accurately reported within the financial statements. These steps include creating a master tuition student list for the School District. Each student will have a total amount due. When the school submits tuition each month, the student account will be updated. The schools will update the balance for each student. The School District anticipates correcting inadequate control over tuition revenues by December 2009.
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CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY SCHEDULE OF MANAGEMENT'S RESPONSES YEAR ENDED JUNE 30, 2008
Finding Control Number: FS-7641-08-05 We concur with this finding. The School District will complete the financial statements for the Department of Audits no later than December 2009 to ensure there is adequate time to review and revise statements before the arrival ofthe audit team. The finance department will review all points and findings from prior year to ensure that issues are resolved. Contact Person: Angela D. Adams, Director of Finance Telephone: (770) 945-5035, Fax: (770) 945-4629 Email: angela.adams@bufordcityschools.org
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