{rA A~bO lfil [:33 C~ tq%~9'1 AUDIT REPORT CITY OF CARROLLTON BOARD OF EDUCAnON CARROLL COUNTY, GEORGIA YEAR ENDED JUNE 30, 1997 ''------------------~ STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS 254 WASH I NGTON STREET ATLANTA, GEORGIA 30334-8400 CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY - TABLE OF CONTENTS - SECTION I FINANCIAL INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATIONSCHEDULE OF EXPENDITURES OF FEDERAL AWARDS EXHIBITS GENERAL PURPOSE FINANCIAL STATEMENTS COMBINED STATEMENTS - OVERVIEW A COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP 2 B COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES 3 C COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUNDS 5 D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 6 ADDITIONAL FINANCIAL INFORMATION COMBINING STATEMENTS SPECIAL REVENUE FUND E COMBINING BALANCE SHEET 16 F COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 17 SCHEDULES 1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 18 2 SCHEDULE OF STATE REVENUE 20 3 SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS 21 ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS 4 OVERALL 23 5 BY PROGRAM 24 CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY. - TABLE OF CONTENTS - SECTIONll COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 SECTIONID AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION I FINANCIAL CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 May 29, 1998 Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the City of Carrollton Board of Education INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Ladies and Gentlemen: We have audited the accompanying general-purpose financial statements of the City of Carrollton Board of Education, as of and for the year ended June 30, 1997, as listed in the table of contents. These generalpurpose fmancial statements are the responsibility ofthe City of Carrollton Board ofEducation's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As described in the notes to the general-purpose financial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows: * The general-purpose financial statements of the Board did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles. 97ARL-13 * School activity accounts maintained at the individual schools are not included in the general-purpose fmancial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements. The aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined, but are believed to be material. In our opinion, except for the effects on the general-purpose financial statements of the matters referred to in the preceding paragraph, the general-purpose financial statements referred to above present fairly, in all material respects, the fmancial position of the City of Carrollton Board of Education as of June 30, 1997, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued our report dated May 29, 1998, on our consideration of the City of Carrollton Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the City of Carrollton Board of Education taken as a whole. The accompanying combining statements (Exhibits E and F) and the financial schedules (Schedules 1 through 5), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-B3, Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for puiposes of additional analysis and are not a required part of the general-purpose fmancial statements. Such information has been subjected to the auditing procedures applied in the audit of the general-purpose financial statements and in our opinion, except for the effects of the matters referred to in the third paragraph, such information is fairly presented in all material respects in relation to the general-purpose 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, CLV:cm 97ARL-13 Claude L. Vickers State Auditor CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 1997 EXHIBIT "A" ASSETS GOVERNMENTAL FUND TYPES SPECIAL CAPITAL GENERAL REVENUE PROJECTS FUND FUND FUND ACCOUNT GROUP GENERAL LONG-TERM DEBT TOTALS (Memorandum Only) JUNE 30, 1997 JUNE 30, 1996 Cash and Cash Equivalents $ 3,787,573.09 $ 75,434.66 $ 145,348.00 $ 4,008,355.75 $ 2,705,935.04 Accounts Receivable 1,552,811.23 248,102.03 1,800,913.26 2,115,376.79 Inventories Food Donated Commodities Purchased Food 25,280.77 8,091.73 25,280.77 8,091.73 13,010.11 6,774.82 Amount to be Provided in Future Years For Payment of Capital Lease Agreements $ 804,872.11 804,872.11 1,404,020.04 Total Assets $ 5,340,384.32 $ 356,909.19 $ 145,348.00 $ 804,872.11 $ 6,647,513.62 $ 6,245,116.80 LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable $ 395,466.44 $ 13,649,88 Salaries Payable 1,226,188.20 100,391.68 Expired Grant Balances Payable 5,872.27 Capital Lease Agreements $ Total Liabilities $ 1,621.654.64 $ 119,913.83 $ FUND EQUITY Fund Balances Reserved For Expired Grant Balances/Questioned Costs For Inventories Food Donated Commodities Purchased Food For State Capital Outlay Projects Unreserved Designated for EqUipment Purchases Undesignated $ $ 3,718,729.68 25,280.77 8,091.73 $ 203,622.86 145,348.00 0.00 Total Fund Equity $ 3,718,729.68 $ 236,995.36 $ 145,348.00 $ 804,872.11 409,116.32 $ 1,326,579.88 5,872.27 804,872.11 386,331.08 1,347,303.36 40.19 1,404,020.04 804,872.11 $ 2.546,440.58 $ 3,137,694.67 $ 52,384.61 $ 25,280.77 8,091.73 145,348.00 13,010.11 6,774.82 145,348.00 3,922,352.54 11,074.58 2,878.830.01 $ 4,101,073.04 $ 3,107,422.13 Total Liabilities and Fund Equity $ 5,340,384.32 $ 356,909.19 $ 145,348.00 $ 804,872.11 $ 6,647,513.62 $ 6,245,116.80 The notes to the general purpose financial statements are an integral part of this statement. -2- CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30,1997 EXHIBIT"B" REVENUES GENERAL FUND SPECIAL REVENUE FUND CAPITAL PROJECTS FUND TOTALS (Memorandum Only) YEAR ENDED JUNE 30,1997 JUNE 30,1996 State Funds Federal Funds Taxes Other Funds $ 11,938,220,09 $ 1,015,357.72 $ 1,238,257.86 6,086,656.89 863,285.05 552,355.22 0.00 $ 12,953,577.81 $ 1,238,257.86 6,086,656.89 1,415,640.27 12,634,712.73 1,263,429.11 5,877,001.85 1,245,804.42 Total Revenues $ 18,888,162.03 $ 2,805,970.80 $ 0.00 $ 21,694,132.83 $ 21,020,948.11 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 Capital Outlay Debt Service Principal Interest $ 11,276,814.84 $ 1,004,958.76 644,664.39 626,936.56 468,410.18 391,081.82 1,056,680.15 100,592.79 1,388,779.13 846,702.73 75,303.65 168,580.47 52,674.73 133,876.28 265,423.07 76,645.84 113,142.98 20,476.93 36,250.37 8,668.34 6,339.94 1,208,289.19 $ 546,616.76 64,612.09 52,531.17 15,748.83 $ 12,281,773.60 $ 13,450,223.58 63,267.50 910,087.46 703,582.40 468,410.18 504,224.80 1,056,680.15 100,592.79 1,409,256.06 882,953.10 83,971.99 174,920.41 1,260,963.92 197,143.78 989,707.45 732,537.68 445,783.73 511,674.97 1,140,555.15 85,160,83 1,341,110.25 694,154.87 97,577.59 22,119.79 1,175,620.80 68,900.28 599,147.93 80,360.92 487,378.66 81,491.98 Total Expenditures $ 17,842,326.57 $ 2,808,475.42 $ 63,267.50 $ 20,714,069.49 $ 21,323,997.61 Excess of Revenues over (under) Expenditures $ 1,045,835.46 $ -2,504.62 $ -63,267.50 $ 980,063.34 $ -303,049.50 OTHER FINANCING SOURCES (USES) Proceeds from Sale of School Property Capital Leases Operating Transfers In Operating Transfers Out $ -63,267.50 $ 100,000.00 676,654.53 $ 63,267.50 $ 63,267.50 241,284.92 -63,267.50 -241,284.92 Total Other Financing Sources (Uses) $ -63,267.50 $ 63,267.50 $ 0.00 $ 776,654.53 Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $ 982,567.96 $ -2,504.62 $ 0.00 $ 980,063.34 $ 473,605.03 FUND BALANCE JULY 1 2,736,161.72 225,912.41 145,348.00 3,107,422.13 2,643,871.32 Food Inventory - Net Change in Period Donated Commodities Purchased Food 12,270.66 1,316.91 12,270.66 1,316.91 -8,014.02 -2,040.20 FUND BALANCE JUNE 30 $ 3,718,729.68 $ 236,995.36 $ 145,348.00 $ 4,101,073.04 $ 3,107,422.13 The notes to the general purpose financial statements are an integral part of this statement. - 3- THIS PAGE LEFT BLAHK CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30,1997 EXHIBIT "C" GENERAL FUND BUDGET ACTUAL REVENUES State Funds Federal Funds Taxes Other Funds $ 10,952,431.00 $ 11,938,220.09 18,000.00 5,893,858.00 6,086,656.89 440,310.00 863,285.05 Total Revenues $ 17,304,599.00 $ 18,888,162.03 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 Capital Outlay Debt Service $ 11,860,084.00 $ 11,276,814.84 593,154.00 586,961.00 482,533.00 400,097.00 1,192,020.00 95,493.00 1,569,621.00 876,271.00 76,955.00 32,909.00 130,000.00 644,664.39 626,936.56 468,410.18 391,081.82 1,056,680.15 100,592.79 1,388,779.13 846,702.73 75,303.65 168,580.47 52,674.73 133,876.28 611,228.85 Total Expenditures $ 17,896,098.00 $ 17,842,326.57 Excess of Revenues over (under) Expenditures $ -591,499.00 $ 1,045,835.46 OTHER FINANCING USES Other Uses -63,267.50 Excess of Revenues over (under) Expenditures and Other Financing Uses $ -591,499.00 $ 982,567.96 FUND BALANCE JULY 1J 1996 2,570,837.63 2,736,161.72 Food Inventory - Net Change in Period Donated Commodities Purchased Food SPECIAL REVENUE FUND BUDGET ACTUAL $ 121,317.00 $ 1,015,357.72 1,064,666.00 1,238,257.86 454,854.00 552,355.22 $ 1,640,837.00 $ 2,805,970.80 $ 439,386.21 $ 1,004,958.76 63,066.00 265,423.07 76,645.84 69,062.00 113,142.98 1,000.00 9,696.00 1,152,008.00 20,476.93 36,250.37 8,668.34 6,339.94 1,208,289.19 68,280.00 $ 1,734,218.21 $ 2,808,475.42 $ -93,381.21 $ -2,504.62 $ -93,381.21 $ -2,504.62 357,527.34 225,912.41 12,270.66 1,316.91 FUND BALANCE JUNE 30.1997 $ 1,979,338.63 $ 3,718,729.68 $ 264,146.13 $===2=36=,9=9=5.=36= The notes to the general purpose financial statements are an integral part of this statement. -5- CITY OF CARROLLTON BOARD OF EDUCAnON - CARROLL COUNTY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30,1997 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY The City of Carrollton Board of Education (Board) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes. Accordingly, the Board is a primary government and consists of all the organizations that compose its legal entity. FUND ACCOUNTING The Board uses funds and an account group to report on its fmancial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid fmancial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources. General Fixed Assets are recorded as expenditures in the various funds at-the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types. Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements. The general purpose fmancial statements account for all State, Federal, Taxes and Other funds under control ofthe Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows: GOVERNMENTAL FUND TYPES - are used to account for all or most of a Board's educational activities. Governmental Fund Types include: GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education. SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives. -6- CITY OF CARROLLTON BOARD OF EDUCAnON - CARROLL COUNTY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities. ACCOUNT GROUP GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for material capital lease obligations. BASIS OF ACCOUNTING The accounting and fmancial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources. Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group. Governmental funds are accounted for using the modified accrual basis of accounting under which: Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are property taxes, intergovernmental grants and investment income. Property taxes are considered available if they are collected and remitted by the collecting agent to the Board within 60 days after fiscal year-end. Expenditures are generally recognized when the related fund liability is incurred. A substantial number of personnel of the Board were employed for a one hundred and ninety day period beginning in late August of 1996 and ending in early June 1997. Employment contracts for these employment periods typically specify that compensation be paid in twelve equal monthly payments beginning in September 1996 and ending in August 1997. State grants to fund the State's share of these contracts are disbursed to the Board in the same twelve month period. In accordance with generally accepted accounting principles, salary and fringe benefit expenditures and the related revenue from the State to fund these contracts are recorded in the fiscal period covered by these financial statements. -7- CITY OF CARROLLTON BOARD OF EDUCAnON - CARROLL COUNTY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BUDGET The City of Carrollton Board ofEducation's budget is a complete fmancial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared in accordance with generally accepted accounting principles. The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, bCGA Section 20-2-167, to the Georgia Department ofEducation. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end. CASH AND CASH EQUIVALENTS COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations. RECEIVABLES Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables. PROPERTY TAXES The City of Carrollton City Clerk fixed the property tax levy for the 1996 tax year (calendar year) on October 20, 1996 (levy date). Taxes were due on December 20, 1996. The lien date for property taxes was January 1, 1996. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1997 since their collection meets the criteria of GASB codification section P70.1 03. The City of Carrollton City Clerk bills and collects the property taxes for the Board of Education and remits the taxes collected to theBoard. -8- CITY OF CARROLLTON BOARD OF EDUCAnON - CARROLL COUNTY EXillBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30,1997 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The tax millage rate levied for the 1996 tax year (calendar year) for the City of Carrollton Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value): School Operations 18.34 mills INVENTORIES FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time of purchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets. INTERFUND TRANSACTIONS The Board has the following types of interfund transactions: Reimbursements of expenditures initially made from a fund that are properly applicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed. Operating transfers are recorded for all interfund transactions other than reimbursements. MEMORANDUM ONLY - TOTAL COLUMNS Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results of operations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. Certain reclassifications have been made to the comparative data to conform to the current year classifications. Note 2: DEPOSITS COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond - 9- CITY OF CARROLLTON BOARD OF EDUCAnON - CARROLL COUNTY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 2: DEPOSITS and the market value of securities shall be equal to not less than 110 percent of the public funds being secured after the deduction ofthe amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts. Acceptable security for deposits consists of anyone of or any combination of the following: (1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of 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, . (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 and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association. CATEGORIZATION OF DEPOSITS At June 30, 1997, the bank balances were $4,716,515.40. The amounts of the total bank balances are classified into three categories of credit risk: Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the Board or by the Board's agent in the Board's name. Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Board's name. Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Board's name.) - 10- CITY OF CARROLLTON BOARD OF EDUCAnON - CARROLL COUNTY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 2: DEPOSITS The Board's deposits are classified by risk category at June 30, 1997, as follows: Risk Category Bank Balance 1 $ 100,000.00 2 0.00 3 4,616,515.40 Total $ 4,716.515.40 Note 3: NON-MONETARY TRANSACTIONS The Board receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories Note 4: RISK MANAGEMENT The Board is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; natural disaster and unemployment compensation. The Board has obtained commercial insurance for risk of loss associated with torts, assets, errors or omissions, job related illness or injuries to employees and natural disaster. The Board has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any of the past three years. The Board is self-insured with regard to unemployment compensation claims. The Board accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. Changes in the unemployment compensation claims liability during the last two fiscal years are as follows: 1996 1997 Beginning of Year Liability Claims and Changes in Estimates $ 0.00 $ 2,980.00 $ $ 0.00 $ 7,725.00 $ Claims Paid End of Year Liability 2,980.00 $ 0.00 7,725.00 $ 0.00 The Board has purchased a surety bond to provide additional insurance coverage as follows: - 11 - CITY OF CARROLLTON BOARD OF EDUCAnON - CARROLL COUNTY EXillBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 4: RISK MANAGEMENT Position Covered Amount Superintendent $ 100,000.00 Note 5: GENERAL LONG-TERM DEBT CAPITAL LEASES The City of Carrollton Board of Education has entered into various lease agreements as lessee for classroom computer equipment. These lease agreements qualify as capital leases for accounting purposes and, therefore, . have been recorded at the present value of the future minimum lease payments as of the date of their inception. The changes in General Long-Term Debt during the fiscal year ended June 30, 1997, were as follows: Capital Leases Balance July 1, 1996 $ 1,404,020.04 Deductions Payments 599,147.93 Balance June 30, 1997 $ 804,872.11 At June 30, 1997, payments due by fiscal year which includes principal and interest for these items are as follows: Fiscal Year Ended June 30 Capital Leases 1998 1999 2000 2001 $ 332,165.31 230,033.31 227,869.21 112,275.00 Total Principal and Interest $ 902,342.83 Deduct: Imputed Interest 97,470.72 Net Present Value of Future Minimum Lease Payments $ 804,872.11 - 12 - CITY OF CARROLLTON BOARD OF EDUCAnON - CARROLL COUNTY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 6: ON-BEHALF PAYMENTS The Board has recognized revenues and expenditures in the amount of$376,419.47 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies. Georgia Department of Education Paid to the State Merit System of Personnel Administration For Health Insurance of Non-Certified Personnel In the amount of$313,961.57 Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of$21,075.90 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$41,382.00 Note 7: SIGNIFICANT COMMITMENTS The following is an analysis of significant outstanding construction or renovation contracts executed by the Board as of June 30, 1997, together with funding available: Project Unearned Executed Contracts Funding Available From State GSFIC 97-766-043 GSFIC 97-766-044 $ 24,483.42 $ 425,987.00 46,931.46 586,131.00 $ 71.414.88 $ 1.012,118.00 The amounts described in this note are not reflected in the general purpose financial statements. Note 8: CONTINGENT LIABILITIES Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The Board believes that such disallowances, if any, will be immaterial to its overall financial position. The Board is a defendant in various legal proceedings pertaining to matters incidental to the performance of routine Board operations. The ultimate disposition of these proceedings is not presently determinable, but is not believed to be material to the general purpose financial statements. - 13 - CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 9: SUBSEQUENT EVENTS On September 16, 1997 the voters ofthe City of Carrollton voted in favor of a Special Purpose Local Option Sales Tax referendum for educational purposes. The imposition of the tax by the voters, as stated on the Official Ballot of the City of Carrollton and applicable to the City of Carrollton Board of Education is as follows: "Shall a special one percent sales and use tax be imposed in the City of Carrollton for a period of time not to exceed five years (20 calendar quarters) and for the raising of not more than $65,800,000 for the purpose of...(iii) funding the acquisition, construction, renovation, modification, improvement, extending and equipping of capital outlay projects throughout the Carrollton School System, including, but without limitation, renovations, modifications, improvements, extensions and equipping of facilities at the Carrollton High School to include a band room, kitchen expansion, and the addition of a science wing; at the Carrollton Junior High School to include a classroom addition of regular classrooms, science classrooms, a technology laboratory and a media center; at the Carrollton Elementary School to include a classroom addition of regular classrooms, restrooms, covered walkways; and improvements to the Maple Street Education Center; including the acquisition of all property, both real and personal, necessary therefor (the "Carrollton School Projects"), the maximum cost of such Carrollton School Projects not to exceed $12,743,302.50; (iv) to pay the principal and interest coming due on the outstanding Series 1990 and Series 1995 General Obligation School Bonds of the City of Carrollton as they come due on July 1, 1998, through July 1,2003, which principal and interest payments total $2,916,697.50;...?" Note 10: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts. TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Board who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.81 % and employer contributions for the current fiscal year and the preceding two fiscal years are as follows: - 14 - CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30,1997 Note 10: RETIREMENT PLANS Fiscal Year 1997 1996 1995 Percentage Contributed 100% 100% 100% Required Contribution $ 1,297,951.36 $ 1,265,490.08 $ 1,143,192.07 - 15 - CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30. 1997 EXHIBIT"E" Cash and Cash Equivalents Accounts Receivable Inventories Food Donated Commodities Purchased Food SCHOOL FOOD SERVICES FUND LOTIERY PROGRAMS FEDERAL PROGRAMS OTHER TOTALS PROGRAMS JUNE 30, 1997 JUNE 30, 1996 $ 262,991.33 $ 0.00 $ 262,991.33 $ 260,359.59 1,185.42 $ 231,696.72 $ 15,219.89 248,102.03 341,322.06 25,280.77 8,091.73 25,280.77 8,091.73 13,010.11 6,774.82 Total Assets $ 297,549.25 $ 0.00 $ 231,696.72 $ 15,219.89 $ 544,465.86 $ 621,466.58 LIABILITIES AND FUND EQUITY LIABILITIES Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable $ 4,368.89 57,109.68 Total Liabilities $ 61,478.57 FUND EQUITY Fund Balances Reserved For Inventories Food Donated Commodities $ 25,280.77 Purchased Food 8,091.73 Unreserved Designated for Equipment Purchases Undesignated 202,698.18 $ Total Fund Equity $ 236,070.68 $ $ 173,261.46 $ 9,280.99 43,282.00 5,872.27 $ 231,696.72 $ 14,295.21 $ 14,295.21 $ 187,556.67 $ 13,649.88 100,391.68 5,872.27 307,470.50 $ 211,594.24 32,646.28 151,273.46 40.19 395,554.17 0.00 $ 0.00 $ 0.00 $ 0.00 $ $ 924.68 924.68 $ 25,280.77 $ 8,091.73 203,622.86 236,995.36 $ 13,010.11 6,774.82 11,074.58 195,052.90 225,912.41 Total Liabilities and Fund Equity $ 297,549.25 $ 0.00 $ 231,696.72 $ 15,219.89 $ 544,465.86 $ 621,466.58 See notes to the general purpose financial statements. - 16- See notes to the general purpose financial statements. - 17- CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 1997 SCHEDULE "1" FUNDING AGENCY PROGRAM/GRANT Agriculture, U. S. Department of Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program 1997 Grant National School Lunch Program 1997 Grant Food Distribution Program (1) Total U. S. Department of Agriculture Corporation for National and Community Service Pass-Through From Georgia Department of Education Leam and Serve America School and Community Based Programs 1997 Grant Education, U. S. Department of Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies 1997 Grant State School Improvement Grants 1997 Grant Title II Eisenhower Professional Development 1997 Grant Title VI Innovative Education Program Strategies 1997 Grant Goals 2000 State and Local Education Systemic Improvement Grants 1997 Grant Individuals with Disabilities Education Act Part B - Special Education Flow Through 1997 Grant Preschool 1997 Grant Stewart B. McKinney Homeless Assistance Act Education for Homeless Children and Youth 1997 Grant Vocational Education - Basic Grants to States High School Program Basic Grant 1997 Grant Tech-Prep Education 1997 Grant Total U. S. Department of Education Total Federal Financial Assistance = N/A Not Available CFDA NUMBER PASSTHROUGH ENTITYID NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD * 10.553 * 10.555 10.550 N/A $ 114,953.09 N/A 450,922.54 $ N/A 76,170.04 $ 642,045.67 $ (2) 1,119,180.76 (3) 76,170.04 1,195,350.80 94.004 N/A $ 14,010.50 $ 14,010.50 84.010 84.218 84.281 84.298 N/A $ 243,947.62 $ N/A 9,000.00 N/A 3,227.17 N/A 17,444.00 243,947.62 9,000.00 3,227.17 17,444.00 84.276 N/A 14,486.61 14,486.61 84.027 N/A 84.173 N/A 84.196 N/A 167,850.45 70,289.60 23,999.24 167,850.45 70,289.60 23,999.24 84.048 84.243 N/A 26,457.00 N/A 5,500.00 $ 582,201.69 $ 26,457.00 5,500.00 582,201.69 $ 1,238,257.86 $ 1,791,562.99 - 18- CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 3D. 1997 SCHEDULE "1" Notes to the Schedule of Expenditures of Federal Awards (1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the currentfiscal year. (2) Expenditures for the School Breakfast Program were not maintained separately and are included in the 1997 National School Lunch Program. (3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source. Major Programs are identified by an asterisk (*) in front of the CFDA number. The Board did not provide Federal Assistance to any Subrecipient. The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the City of Carrollton Board of Education and is presented on the modified accrual basis of accounting which is the same basis of accounting used in the presentation of the general purpose financial statements. See notes to the general purpose financial statements. -19- CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30,1997 SCHEDULE "2" AGENCY/FUNDING GRANTS Administrative Services, Georgia Department of Distant Learning - Interlink Project Children and Youth Services, Georgia Department of Family Connection Education, Georgia Department of Quality Basic Education General and Career Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Middle School Incentive Program Special Instructional Assistance In-School Suspension Counselors Grades 4 and 5 Technology Training Local Fair Share Deferred Summer Salaries (Prior Year) Deferred Summer Salaries (Current Year) Educational Equalization Funding Grant Food Services Vocational Education Other State Programs Advanced Placement Exams At-Risk Summer School Program Environmental Science Program Health Insurance Mentoring Program Mentor Teacher Program Next Generation Schools Preschool Handicapped Program Remedial Summer School Program Teachers'Retirement Lottery Program Instructional Technology Human Resources, Georgia Department of Family Connection Office of School Readiness Pre-Kindergarten Program Office of Treasury and Fiscal Services Public School Employees Retirement CONTRACT Education, Georgia Department of Leadership Development Program GOVERNMENTAL FUND TYPES SPECIAL GENERAL REVENUE FUND FUND TOTAL $ 87,748,51 $ $ 4,732.89 87,748.51 4,732.89 7,111,544.00 1,290,421.00 285,702.00 303,490.00 94,268,00 2,041,847.00 193,300.00 59,546.00 257,350.00 299,469.00 79,765.00 20,150.00 27,157.00 -1,635,429.00 -1,349,784.00 1,544,974.00 523,851.00 192,000.00 609.04 12,679.60 500.00 313,961.57 4,000.00 5,488.00 101,639.00 4,515.47 21,075.90 41,382.00 78,044.00 48,397.00 70,980.00 50,000.00 763,203.83 7,111,544.00 1,290,421,00 285,702,00 303,490.00 94,268.00 2,041,847.00 193,300.00 59,546.00 257,350.00 299,469.00 79,765.00 20,150.00 27,157.00 -1,635,429.00 -1,349,784.00 1,544,974.00 523,851.00 78,044.00 192,000.00 609.04 12,679.60 500.00 313,961.57 4,000.00 5,488.00 101,639.00 48,397.00 4,515.47 21,075.90 70,980.00 50,000.00 763,203.83 41,382.00 5,000.00 5,000.00 See notes to the general purpose financial statements. $ 11,938,220.09 $ 1,015,357.72 $ 12,953,577.81 - 20- CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY SCHEDULE OF EXPENDITURES LOTIERY PROGRAMS YEAR ENDED JUNE 30,1997 SCHEDULE "3" EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation Debt Service INSTRUCTIONAL TECHNOLOGY PRE-KINDERGARTEN PROGRAM TOTAL $ 2,700.00 $ 68,280.00 553,915.20 $ 95,563.55 35,172.11 17,668.77 20,476.93 26,485.00 983.88 12,938.39 556,615.20 95,563.55 35,172.11 17,668.77 20,476.93 26,485.00 983.88 12,938.39 68,280.00 Total Expenditures $ 70,980.00 $ 763,203.83 $ =====8=34=,=18=3=.8==3 RECAP: Salaries and Benefits Pre-Kindergarten Program Other Expenditures Instructional Technology Pre-Kindergarten Program $ 622,266.93 70,980.00 140,936.90 $ 834,183.83 See notes to the general purpose financial statements. - 21 - THIS PAGE LEFT BLAHK CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 1997 SCHEDULE "4" Minimum Expenditure Requirements (Total Allotment) Expenditures on Combined Program Basis Salaries (1) (2) Operations Less: Expenditures for Media Center Programs in Excess of Total Media Allotment Expenditures per Audit FOURTEEN WEIGHTED AND MEDIA CENTER PROGRAMS 100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS $ 8,991,157.00 $ _ _-=2....;.;49;;..!"O.:;.;8::..;,,7.;...;:.0~0 $ 9,536,643.30 874,217.87 $ _ _....;.;7,.;;;.,84..;.:.,3=-1~1.;...;:.8~9 $ 10,410,861.17 -149,248.10 $ 10,261,613.07 Amount of Underexpenditure for Total Allotment $ 0.00 $ =======0=.0=0 Note: (1) Salary accruals (July and August 1997 Deferred Salaries) reported as expenditures in the General Purpose Financial Statements are not included on this analysis in order to comply with program guidelines. (2) Salary accruals (July and August 1996 Deferred Salaries) reported as expenditures in the prior year General Purpose Financial Statements are included on this analysis as required by program guidelines. See notes to the general purpose financial statements. - 23 - CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM GENERAL FUND QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30,1997 GENERAL AND CAREER EDUCATION PROGRAMS Kindergarten (0) Grades 1 - 3 (0) Sub-Total- K-3 Grades 4 - 5 (0) Grades 6 - 8 (0) Grades 9 - 12 (0) High School Laboratories (0) Vocational Education Laboratories (0) Total General and Career Education Programs SPECIAL EDUCATION PROGRAMS Regular Programs Category I (0) Category II (0) Category III (0) Category IV (0) Sub-Total - ~egular Category VI (Gifted) (0) Total Special Education Programs REMEDIAL EDUCATION PROGRAM (OJ Total Fourteen Weighted Programs MEDIA CENTER PROGRAMS Salaries Operations Total Media Center Programs Total Fourteen Weighted and Media Center Programs STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development Total Staff Development Programs (0) Identifies Fourteen Weighted Programs. (1) Salary accruals (JUly and August 1997 Deferred Salaries) reported as expenditures in the General Purpose Financial Statements are not included on this analysis in order to comply with program guidelines. See notes to the general purpose financial statements. - 24 - ALLOTMENTS FROM DEPARTMENT OF EDUCATION REQUIRED ORIGINAL % ORIGINAL MID-TERM $ 854,739.00 $ 769,265.10 $ 2,064,543.00 1,858,088.70 $ 2,919,282.00 90 $ 2,627,353.80 $ 878,445.00 90 790,600.50 1,533,381.00 90 1,380,042.90 909,545.00 90 818,590.50 566,368.00 90 509,731.20 304,523.00 90 274,070.70 $ 7,111,544.00 $ 6,400,389.60 $ 0.00 0.00 0.00 $ 1,035,464.00 $ 931,917.60 $ 0.00 $ 1,035,464.00 90 $ 931,917.60 $ 254,957.00 90 229,461.30 $ 1,290,421.00 $ 1,161,378.90 $ $ 285,702.00 90 $ 257,131.80 $ $ 8,687,667.00 $ 7,818,900.30 $ $ 245,713.00 90 $ 221,141.70 $ 57,777.00 90 51,999.30 $ 303,490.00 $ 273,141.00 $ $ 8,991,157.00 $ 8,092,041.30 $ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 $ 26,235.00 68,033.00 $ 26,235.00 $ 68,033.00 0.00 0.00 $ 94,268.00 100 $ 94,268.00 $ 0.00 (2) Salary accruals (JUly and August 1996 Deferred Salaries) reported as expenditures in the prior year General Purpose Financial Statements are included on this analysis as required by program guidelines. SCHEDULE "5" TOTAL REQUIRED ACTUAL EXPENDITURES SALARIES (1)(2) OPERATIONS TOTAL AMOUNT OF UNDEREXPENDITURE FOR REQUIRED ALLOTMENT $ 769,265.10 $ 750,806.55 $ 84,470.89 $ 835,277.44 1,858,088.70 1,980,882.28 162,115.46 2,142,997.74 $ 2,627,353.80 $ 2,731,688.83 $ 246,586.35 $ 2,978,275.18 $ 0.00 790,600.50 881,344.03 82,975.15 964,319.18 0.00 1,380,042.90 1,687,982.86 94,853.83 1,782,836.69 0.00 818,590.50 878,911.16 98,044.68 976,955.84 0.00 509,731.20 1,050,184.09 185,480.50 1,235,664.59 0.00 274,070.70 397,868.37 45,804.86 443,673.23 0.00 $ 6,400,389.60 $ 7,627,979.34 $ 753,745.37 $ 8,381,724.71 $ 931,917.60 $ 126,313.08 $ 172,210.89 682,092.03 29,873.58 2,602.61 $ 2,927.16 11,131.92 375.00 128,915.69 175,138.05 693,223.95 30,248.58 $ 931,917.60 $ 1,010,489.58 $ 17,036.69 $ 1,027,526.27 0.00 229,461.30 259,596.89 11,044.93 270,641.82 0.00 $ 1,161,378.90 $ 1,270,086.47 $ 28,081.62 $ 1,298,168.09 $ 257,131.80 $ 275,745.27 $ 2,485.00 $ 278,230.27 0.00 $ 7,818,900.30 $ 9,173,811.08 $ 784,311.99 $ 9,958,123.07 $ 221,141.70 $ 362,832.22 $ 362,832.22 0.00 51,999.30 $ 89,905.88 89,905.88 0.00 $ 273,141.00 $ 362,832.22 $ 89,905.88 $ 452,738.10 $ 8,092,041.30 $ 9,536,643.30 $ 874,217.87 $ 10,410,861.17 $ 0.00 $ 26,235.00 68,033.00 $ 94,268.00 $ 98,863.01 $ 98,863.01 1,048.20 1,048.20 $ 99,911.21 $ 99,911.21 $========0',;,00= - 25 - SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS CLAUDE L. VICKERS STATE AUDITOR (404) 6562174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 May 29, 1998 Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the City of Carrollton Board of Education REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Ladies and Gentlemen: We have audited the financial statements of City of Carrollton Board of Education as of and for the year ended June 30, 1997, and have issued our report thereon dated May 29, 1998. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general-purpose financial statements. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to fmancial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether City of Carrollton Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. Internal Control Over Financial Reporting In planning and performing our audit, we considered City of Carrollton Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its 97YB-40 operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in our judgement, could adversely affect City of Carrollton Board of Education's ability to record, process, summarize and report financial data consistent with assertions ofmanagement in the financial statements. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FS-7661-97-01. A material weakness is a condition in Which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, the reportable condition described above is considered to be a material weakness. This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record. Respectfully submitted, CLV:cm 97YB-40 Claude 1. Vickers State Auditor CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 May 29, 1998 Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the City of Carrollton Board of Education REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTRQL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULARA-133 Ladies and Gentlemen: Compliance We have audited the compliance of City of Carrollton Board of Education with the types of compliance requirements described in the Us. Office ofManagement and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 1997. City of Carrollton Board of Education's major Federal programs are identified in the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of City of Carrollton Board of Education's management. Our responsibility is to express an opinion on City of Carrollton Board of Education's compliance based on our audit. We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133,Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the City of Carrollton Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on City of Carrollton Board ofEducation's compliance with those requirements. 97SA-I0 In our opinion, the City of Carrollton 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, 1997. Internal Control Over Compliance The management of City of Carrollton Board of Education is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered City of Carrollton 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 of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more ofthe internal control components does not reduce to a relatively low level of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses. This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record. Respectfully submitted, ~~~ Claude L. Vickers State Auditor CLV:cm 97SA-I0 SECTIONlli AUDlTEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1997 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS 7661-93-02 7661-94-01 7661-96-01 Unresolved - See Corrective Action/Responses Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented CORRECTIVE ACTIONIRESPONSES GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number 7661-93-02 Due to current staffmg limitations and budgetary considerations prohibiting the hiring of additional administrative staff, the Board has decided not to pursue the recording of general fixed assets on the financial statements. SECTION IV FINDINGS AND QUESTIONED COSTS CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1997 I SUMMARY dF AUDITOR'S RESULTS 1. Type of Report Issued on the Financial Statements The auditor's opinion on the City of Carrollton Board of Education's financial statements was qualified for various departures from generally accepted accounting principles. 2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the City of Carrollton Board of Education disclosed a financial statement reportable condition related to the following control category. General Fixed Assets The reportable condition described above is considered to be a material weakness. 3. Noncompliance Material to the Financial Statements The audit ofthe City of Carrollton Board of Education disclosed no instances of noncompliance that were deemed to be material to the financial statements. 4. Reportable Conditions in Internal Control Over Major Programs The audit report for the City of Carrollton Board of Education did not disclose any reportable conditions in internal control over major programs. 5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the City of Carrollton Board of Education'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 of Carrollton Board of Education's audit did not disclose audit findings required to be reported by section .510(a) ofOMB Circular A-133. 7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program 8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00. 9. Low Risk Auditee The City of Carrollton Board of Education was audited as a low risk auditee based on a waiver granted by the U. S. Department of Education. -I - CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1997 II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-7661-97-01 The City of Carrollton Board of Education did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general purpose financial statements of the Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the Board and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. -2-