Audit report, City of Carrollton Board of Education, Carroll County, year ended June 30, 1998

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AUDIT REPORT CITY OF CARROLLTON BOARD OF EDUCATION
CARROLL COUNTY, GEORGIA YEAR ENDED JUNE 30, 1998
STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

CTIY 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 INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

EXHIBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

GENERAL AND SPECIAL REVENUE FUNDS

7

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

8

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

18

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

20

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

22

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

23

SCHEDULES

1 SCHEDULE OF REQUIRED SUPPLEMENTARY INFORMATION

24

2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

25

3 SCHEDULE OF STATE REVENUE

27

4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

28

5 SCHEDULE OF EXPENDITURES

LOTIERY PROGRAMS

29

CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDmONAL FINANCIAL INFORMATION

SCHEDULES

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

6

OVERALL

31

7

BY PROGRAM

32

SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133

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

SECTIONN FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
August 26, 1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe 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, 1998, as listed in the table of contents. These general purpose financial statements are the responsibility ofthe City ofCarrollton Board ofEducation's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.
Except as discussed in the following paragraph, 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 ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also inCludes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
We did not observe the taking of either the Federal donated commodities inventory or purchased foods inventory at June 30, 1998, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures.
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 frotp. generally accepted accounting principles. These variances are described as follows:

98ARL-13B

* 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.
* School activity accounts maintained at the individual schools are not included in the general purpose
financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general purpose financial statements.
The 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 of such adjustments, if any, on the Special Revenue Fund, as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy of the food service inventories as discussed in the third paragraph and except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements referred to above present fairly, in all material respects, the financial position ofthe City of Carrollton Board ofEducation as ofJune 30, 1998, and the results ofits 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 August 26, 1999, on our consideration ofthe City of Carrollton Board ofEducation's internal control over financial reporting and our tests ofits compliance with certain provisions of laws, regulations, contracts and grants.
The year 2000 supplementary information on Schedule "1" is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally ofinquiries ofmanagement regarding the methods ofmeasurement and presentation ofthe supplementary information. However we did not audit the information and do not express an opinion on it. In addition, we do not provide assurance that City of Carrollton Board ofEducation is or will become year 2000 compliant, that the Board's year 2000 remediation efforts will be successful in whole or in part, or that parties with which City ofCarrollton Board ofEducation does business are or will become year 2000 compliant.
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 through H) and the financial schedules (Schedules 2 through 7), 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 ofthe general purpose financial 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 effect of adjustments, if any, on the Special Revenue Fund, as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy of the food service inventories as discussed in the third paragraph and except for theeffects ofthe matters referred to in the fourth paragraph, such information is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole.
98ARL-13B

A copy of this report has be.en 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,
~ k) .~::$;;:
Russell W. Hinton State Auditor
RWH:gp 98ARL-13B

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. 1998

ASSETS
Cash and Cash Equivalents
Accounts Receivable
Inventories Food Donated Commodities Purchased Food
Amount Available in Debt Service Fund
Amount to be Provided in Future Years For Payment of Capital Lease Agreements For Payment to City of Carrollton

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$ 4,564,978.58 $

207.55

1,653,541.00

319,306.85 $ 6,085,566.22

35,121.49 17,525.33

Total Assets

$ 6,218,519.58 $

372,161.22 $ 6,085,566.22

EXHIBIT "A"

DEBT SERVICE
FUND

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS (Memorandum Only) JUNE 30,1998 JUNE 30,1997

$

602,083.82

$ 5,167,269.95 $ 4,008,355.75

349,258.79

8,407,672.86

1,800,913.26

35,121.49 17,525.33

$

951,342.61

951,342.61

527,652.40 5,048,657.39

527,652.40 5,048,657.39

25,280.77 8,091.73
804,872.11

$

951.342.61 $

6.527.652.40 $ 20,155,242.03 $ 6,647,513.62

$

199,231.75

398,525.69 $

409,116.32

1,403,016.06

1,326,579.88

3,201.80

5,872.27

450,726.26

108.262.40

$

527.652.40

527.652.40

804,872.11

6.000.000.00

6.000.000.00

$

6,527,652.40 $ 9,090.616.36 $ 2,546,440.58

$

951.342.61

0.00

$

951.342.61

$

9,329.00

1,046.58

951.342.61

35,121.49$ 17,525.33 5,286,001.81 41.344.00
4.722.914.85
$ 11 .064,625.67 $

25,280.77 8.091.73
145,348.00
3.922.352.54 4,101.073.04

$

951 ,342.61 $

6,527.652.40 $ 20,155.242.03 $ 6.647,513.62 -3-

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 30.1998
The notes to the general purpose financial statements are an integral part of this statement. -4-

EXHIBIT"B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS (Memorandum Only)
YEAR ENDED JUNE 30, 1998 JUNE 30, 1997

$ 1,012,118.00
$ 76,924.41
$ 1,089,042.41 $

$
922,248.20 6,563.51
928,811.71 $

14,117,688.86 $ 1,441,833.97 7,293,092.60 1,615,696.48
24,468,311.91 $

12,953,577.81 1,238,257.86 6,086,656.89 1,415,640.27
21 ,694,132.83

$

$

124,178.98

1,831,457.47

$ 1,955,636.45 $

$

-866,594.04 $

0.00 $ 13,411,677.19 $ 12,281,773.60

877,676.44 862,285.38 417,345.55 548,614.37 1,121,965.40 231,890.03 1,481,736.46 637,668.75
79,346.25 259,770.21 1,300,982.88 2,000,718.61

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

289,219.71 44,915.12

599,147.93 80,360.92

0.00 $ 23,565,812.35 $ 20,714,069.49

928,811.71 $

902,499.56 $

980,063.34

$ 6,007,247.85 $ 41,344.00
$ 6,048,591.85 $
$ 5,181,997.81 $ 145,348.00

22,530.90 $ 22,530.90 $

6,029,778.75 12,000.00 71,611.71 $ -71,61'1.71
6,041,n8.75 $

63,267.50 -63,267.50
0.00

951,342.61 $ 0.00

6,944,278.31 $ 4,101,073.04

980,063.34 3,107,422.13

9,840.72 9,433.60

12,270.66 1,316.91

$ 5,327,345.81 $

951,342.61 $ 11,064,625.67 $ 4,101,073.04

-5-

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 30.1998

EXHIBIT"C"

GENERAL FUND

BUDGET

ACTUAL

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 11,381,290.00 $ 12,082,811.12

819.91

6,028,466.00 . 6,370,844.40

440,310.00

940,220.45

Total Revenues

$ 17,850,066.00 $ 19,394,695.88

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 OuUay Debt Service

$ 11,779,773.00 $ 12,251,329.33

598,375.00 461,383.00 489,673.00 413,685.00 1,235,705.00 110,895.00 1,609,499.00 751,411.00.
79,033.00
38,479.00 269,569.00

595,316.45 763,162.13 417,345.55 466,709.51 1,121,965.40 107,705.05 1,437,564.78 618,565.91
79,346.25 178,350.00 36,948.92 169,261.14 256,446.83

Total Expenditures

$ 17,837,480.00 $ 18,500,017.25

Excess of Revenues over (under) Expenditures

$

12,586.00 $ 894,678.63

OTHER FINANCING SOURCES (USES)

Other Sources Other Uses

$

12,000.00

-71,611.71

Total Other Financing Sources (Uses)

$

-59,611.71

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

12,586.00 $ 835.066.92

FUND BALANCE JULY 1.1997

3,744,696.88

3,718,729.68

Food Inventory - Net Change in Period Donated Commodities Purchased Food

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$

80,804.00 $ 1,022,759.74

1,276,493.00

1,441,014.06

471,764.00

591,988.11

$ 1,829,061.00 $ 3,055,761.91

$ 471,913.00 $ 1,160,347.86

52,022.00 21,500.00

282,359.99 99,123.25

74,205.00

81,904.86

3,000.00

6.00 44,171.68 19,102.84

10,261.00 1,192,049.00

81,420.21 1,264,033.96

77,688.00

$ 1,824,950.00 $ 3,110,158.65

$

4,111.00 $

-54,396.74

$

30,267.71

$

30,267.71

$

4,111.00 $

-24,129.03

235,458.76

236,995.36

9.840.72 9,433.60

FUND BALANCE JUNE 30. 1998

$ 3,757,282.88 $ 4,553,796.60

$ 239,569.76 $ 23.-2.,.1.4..0.65..

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

CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1998
Note 1: SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The City ofCarrollton Board ofEducation (Board) was established under the laws ofthe State ofGeorgia 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 ofall the organizations that compose its legal entity.
FUND ACCOUNTING
The Board uses funds and an account group to report on its financial position and the results ofits operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time ofpurchase. A General Fixed Assets Account Group is not presently maintained by the Board. To confonn 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 confonn to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements.
The general purpose financial statements account for all State, Federal, Taxes and Other funds under control ofthe Board, in compliance with generally accepted accounting principles applicable to governmental units,' unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most ofa Board's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.
SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department ofEducation and from the Federal government to accomplish specific educational objectives.
-8-

CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30.1998
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 ofmajor capital facilities.
DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for material capital lease obligations.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
Governmental funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible wit:hin the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income.
Expenditures are generally recognized when the related fund liability is incurred.
A substantial number of personnel of the Board were employed for a one hundred and ninety day period beginning in late August of 1997 and ending in early June 1998. Employment contracts for these employment periods typically specify that compensation be paid in twelve equal monthly payments beginrting in September 1997 and ending in August 1998. 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.
-9-

CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30; 1998
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUDGET
The City of Carrollton Board ofEducation's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level ofbudget control was established by the Board at the aggregate level. The budget for governmental funds was prepared 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 ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral 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 ofthe Quality Basic Education Act, OCGA 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 1997 tax year (calendar year) on September 22, 1997 (levy date). Taxes were due on December 22, 1997. The lien date for property taxes was January 1, 1997. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1998. The City of Carrollton City Clerk bills and collects the property taxes for the Board ofEducation and remits the taxes collected to the Board.
- 10-

CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30. 1998

Note 1: SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES

The tax millage rate levied for the 1997 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

SALES TAXES

Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $922,248.20 and was recorded in the Debt Service Fund. The State will terminate collection of this tax once an additional $14,737,751.80 has been collected or on December 31,2002, whichever occurs first.

INVENTORIES

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

INTERFUND TRANSACTIONS

The Board has the following types of inter:fund 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 inter:fund 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 confonnity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation ofthis data.

- 11 -

CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY EXHIBIT "D"
NOTES TO TIIE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1998
Note 2: DEPOSITS
COLLATERALIZATION OF DEPOSITS Official Code ofGeorgia 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 ofinsurance, or by collateral. The aggregate of the face value of such surety bond and the market value ofsecurities pledged shall be equal to not less than 110 percent ofthe 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) fusurance on accounts provided by the Federal Deposit fusurance Corporation,
(3) Bonds, bills, notes, certificates ofindebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates ofindebtedness or other obligations ofthe counties or municipalities ofthe State of Georgia,
(5) Bonds of any public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
(6) fudustrial revenue bonds and bonds ofdevelopment authorities created by the laws ofthe State of Georgia, and
(7) Bonds, bills, notes, certificates ofindebtedness, 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 futermediate 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, 1998, the bank balances were $5,871,001.23. 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 th~ Board's name.
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CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1998

Note 2: DEPOSITS

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

The Board's deposits are classified by risk category at June 30, 1998, as follows:

Risk CategOly

Bank Balance

1

$ 100,000.00

2

602,083.82

3

5,168,917.41

Total

$ 5,871.001.23

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 ofassets; 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 ofthat loss can be reasonably estimated.

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

-13 -

CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1998

Note 4: RISK MANAGEMENT

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

1997 1998

$

0.00 $

7,725.00 $

7,725.00 $

0.00

$

0.00 $

2,702.00 $

2,702.00 $

0.00

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

Position Covered

Amount

Superintendent

$ 100,000,00

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The City of Carrollton Board ofEducation has entered into various lease agreements as lessee for classroom computer equipment and copiers, 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 oftheir inception,

CITY OF CARROLLTON DEBT PROCEEDS The Board entered into a joint resolution with the City of Carrollton (City) whereby the City issued $6,000,000,00 of 1998 Series general obligation debt on behalf ofthe Board to finance the cost Qf acquiring constructing, renovating, modifying, improving, extending and equipping capital outlay projects throughout the City of Carrollton School System, This sale provided $6,007,247,85 in proceeds available for capital construction, The Board has agreed that Sales and Use Tax proceeds sufficient to retire the principal and interest will be placed in escrow to service the debt.

The changes in General Long-Term Debt during the fiscal year ended June 30, 1998, were as follows:

Capital Leases

City of Carrollton Debt Proceeds

Total

Balance July 1, 1997

$ 804,872,11

$ 804,872,11

Additions

12,000,00 $ 6,000,000,00 6,012,000,00

Deductions Payments

289,219,71

289,219,71

Balance June 30, 1998

$ 527,652.40 $ 6,000,000,00 $ 6,527,652.40 - 14-

CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY EXHIBIT "D" NOTES TO TIlE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1998

Note 5: GENERAL LONG-TERM DEBT

At June 30, 1998, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30
1999 2000 2001 2002 2003
Total Principal and Interest
Deduct: Imputed Interest
NetPresent Value ofFuture Minimum Lease Payments
Note 6: ON-BEHALF PAYMENTS

Capital Leases

City of Carrollton Debt Proceeds

Total Debt

$ 232,987.59 230,823.49 115,229,28 2,954.28 983.86

$ 1,328,562,50 1,344,322,50 1,345,660,00 1,358,457,50 1.368,257.50

$ 1,561,550,09 1,575,145,99 1,460,889,28 1,361,411.78 1.369,241.36

$ 582,978,50 $ 6,745,260.00 $ 7.328,238.50

55.326.10

$ 527,652.40

The Board has recognized revenues and expenditures in the amount of$363,219,51 for health insurance and retirement contributions paid on the Board's behalfby the following State Agencies,

Georgia Department ofEducation Paid to the State Merit System ofPersonnel Administration For Health Insurance ofNon-Certified Personnel In the amount of $300,383,97

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $22,124.54

Office ofTreasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $40,711.00

Note 7: SIGNIFICANT COMMITMENTS

The following is an analysis of significant outstanding construction or renovation contracts executed by the Board as of June 30, 1998,

- 15 -

CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY EXHIBIT "0"
NOTES TO THE GENERAL PURPOSE FINANCIAL STATE:MENTS
JUNE 30. 1998

Note 7: SIGNIFICANT COMMITMENTS

Project

Unearned Executed Contracts

97-766-043 97-766-044

$ 123,087.28 376.058.62

$ 499.145.90

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 ofthese proceedings is not presently determinable, but is not believed to be material to the general purpose financial statements.

Note 9: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

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

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Board who are covered by TRS are required by State statute to contribute 5% oftheir gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.81% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

- 16-

CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY EXHIBIT "D"
NOTES TO TIIE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30; 1998

Note 9: RETIREMENT PLANS
Fiscal Year
1998 1997 1996

Percentage Contributed
100% 100% 100%

Required Contribution
$ 1,360,750.30 $ 1,297,951.36 $ 1,265,490.08

- 17 -

CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30.1998

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

230,883.19

9,656.46 $

96,390.00

35,121.49 17,525.33

Total Assets

$

293,186.47 $ = = 9...6.=,3=9=0.=00==

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

$

96,390.00

$

4,810.86

57,674.12

$

62,484.98 ,$

96,390.00

$

35,121.49

17,525.33

178,054.67 $

$

230,701.49 $

0.00 0.00

Total Liabilities and Fund Equity

$

293,186.47 $==-_=960.10,3;;,;;9=0.=.00=

See notes to the general purpose financial statements.

- 18-

EXHIBIT "E"

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS
JUNE 30,1998 JUNE 30,1997

$ 230,883.19 $ 262,991.33

$ 195,964.11 $

17,296.28

319,306.85

248,102.03

35,121.49 17,525.33

25,280.77 8,091.73

$ 195,964.11 $

17,296.28 $ 602,836.86 $ 544,465.86

$ 117,381.94 $ 19,471.99 54,861.80 3,201.80
$ 194,917.53 $

16,903.70 $ 16,903.70 $

230,675.64 $ 24,282.85 112,535.92 3,201.80
370,696.21 $

187,556.67 13,649.88
100,391.68 5,872.27
307,470.50

$

1,046.58

0.00 $

$

1,046.58 $

$

1,046.58

392.58 392.58 $

35,121.49 $ 17,525.33
178,447.25
232,140.65 $

25,280.77 8,091.73
203,622.86
236,995.36

$ 195,964.11 $

17,296.28 $ 602,836.86 $ 544,465.86

- 19-

CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND
YEAR ENDED JUNE 30. 1998

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

90,216.00 $

664,419.11

490,975.18

$ 1,245,610.29 $

836,882.63 21,396.43
858,279.06

$ 640,813.21

$

1,219.84

98,445.57 6,898.66 2,136.74
6.00 44,171.68

5,000.00 1,264,033.96

$ 1,270,253.80 $

$

-24,643.51 $

1,699.17
66,520.53 11,167.47 871,859.03 -13,579.97

$

-24,643.51 $

236,070.68

9,840.72 9,433.60.

13,579.97
0.00 0.00

$ 230,701.49 $

0..0..0.

Se~ notes to the general purpose financial statements.

- 20-

EXHIBIT "F"

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS YEAR ENDED JUNE 30,1998 JUNE 30,1997

$ $ 776,594.95

95,661.11 $ 79,616.50

1,022,759.74 $ 1,441,014.06
591,988.11

1,015,357.72 1,238,257.86
552,355.22

$

776,594.95 $

175,277.61 $ 3,055,761.91 $ 2,805,970.80

$ 519,534.65

$ 1,160,347.86 $ 1,004,958.76

77,610.62 $ 92,224.59 71,569.22

106,303.80 6,979.06

19,102.84

74,721.04

282,359.99 99,123.25 81,904.86 6.00 44,171.68 19,102.84
81,420.21 1,264,033.96

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

66,520.53 11,167.47

52,531.17 15,748.83

$ 780,041.92 $ 188,003.90 $ 3,110,158.65 $ 2,808,475.42

$

-3,446.97 $

-12,726.29 $

-54,396.74 $

-2,504.62

4,493.55

12,194.19

30,267.71

$

1,046.58 $

0.00

-532.10 $ 924.68

-24,129.03 $ 236,995.36

-2,504.62 225,912.41

9,840.72 9,433.60

12,270.66 1,316.91

$

1,046.58 $

392.58 $ 232,140.65 $ 236,995.36

- 21 -

CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30. 1998

EXHIBIT"G"

ASSETS Cash and Cash Equivalents Accounts Receivable Due from Other Funds
Total Assets

BOND PROCEEDS

LOTIERY PROJECT

TOTALS JUNE 30, 1998 JUNE 30,1997

$

145,348.00

$ 5,959,993.28 $

125,572.94 $ 6,085,566.22

673,991.47

673,991.47

$ 5,959,993.28 $

799,564.41 $ 6,759,557.69 $

1.4..5.,.3.4..8...0...0.

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

$

$

673,991.47

$ 673,991.47 $

$ 5,286,001.81 $
0.00
$ 5,286,001.81 $

199,231.75 $ 450,726.26 108,262.40

199,231.75 450,726.26 108,262.40 673,991.47

758,220.41 $ 1,432,211.88

$ 5,286,001.81

41,344.00

41,344.00 $

0.00

0.00

41,344.00 $ 5,327,345.81 $

145,348.00 0.00
145,348.00

Total Liabilities and Fund Equity

$ 5,959,993.28 $

799,564.41 $ 6,759,557.69 $

1.4..5.,.3.4..8....0..0.

See notes to the general purpose financial statements.

-22-

CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 1997

EXHIBIT"H"

FUND BALANCE JUNE 30

$ 5,286,001,81 $

41,344.00 $ 5,327,345.81 $===1.4.5.:!,=34=8:=,0=:.0

See notes to the general purpose financial statements.

-23-

CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY SCHEDULE OF REOUIRED SUPPLEMENTARY INFORMATION
YEAR 2000 DISCLOSURES
YEAR ENDED JUNE 30. 1998

SCHEDULE "1"

At June 30, 1998, the City of Carrollton Board ofEducation had no outstanding contractual commitments for the purpose ofmaking computer systems and other electronic equipment year 2000 compliant. The year 2000 issue is the result ofshortcomings in many electronic data processing systems and other equipment that make operations beyond year 1999 troublesome. The year 2000 issue is ofprimary concern for the Board's financial accounting system, student information system, instructional computer equipment systems, heating and air conditioning control equipment system, public address system and fire and burglar alarm system. The following stages have been identified as necessary to implement a year 2000 compliant systems.
Awareness Stage - Encompasses establishing a budget and project plan for dealing with the year 2000 Issue.
Assessment Stage - The actual process of identifying all of its systems and individual components of the systems to check for compliance.
Remediation Stage - When changes are made to systems and equipment.
Validation/Testing Stage - The process of ensuring that the changes made to systems and equipment will produce a year 2000 compliant system.
It will be necessary for the Board to progress through all four of these stages for each computer and/or electronic system, not already year 2000 compliant, in order to assure that these systems will not be adversely affected. As of June 30, 1998, the financial accounting system, instructional computer equipment systems, heating and air conditioning control equipment system, public address system and fire and burglar alarm system were determined to be at the Validation/Testing stage. The student information system was determined to be at the Awareness Stage.

See notes to the general purpose financial statements. - 24-

CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 1998

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U. S. Department of Pass-Through From Georgia Department of Education Food and Nutrition Program Nutrition and Education Training Program 1998 Grant Food Services School Breakfast Program 1998 Grant National School Lunch Program 1998 Grant Food Distribution Program (1)
Total U. S. Department of Agriculture
Education, U. S. Department of Direct Impact Aid 1998 Grant Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies 1998 Grant Title II Eisenhower Professional Development 1998 Grant Title VI Innovative Education Program Strategies 1998 Grant Goals 2000 State and Local Education Systemic Improvement Grants 1998 Grant Individuals with Disabilities Education Act Part B - Special Education Flow Through 1998 Grant Preschool 1998 Grant Stewart B. McKinney Homeless Assistance Act Education for Homeless Children and Youth 1998 Grant Vocational Education - Basic Grants to States High School Program Basic Grant 1998 Grant Tech-Prep Education 1998 Grant
Total U. S. Department of Education

CFDA NUMBER

PASSTHROUGH
ENTITY 10
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

10.564
* 10.553 * 10.555
10.550

N/A

$

5,000.00 $

5,000.00

N/A

120,480.22

(2)

N/A

479,610.17

1,205,925.08 (4)

N/A

59,328.72

59,328.72

$ 664,419.11 $ 1,270,253.80

84.041

$

819.91

(3)

* 84.010

N/A

84.281

N/A

84.298

N/A

308,039.01 $
13,977.51 18,806.00

308,535.32 (4) 13,847.46 18,806.00

84.276

N/A

72,556.99

71,640.46

* 84.027

N/A

* 84.173

N/A

84.196

N/A

251,668.13 56,950.31
20,000.00

255,589.04 (4) 56,950.31
20,000.00

84.048 84.243

N/A

29,597.00

N/A

5,000.00

$ 777,414.86 $

29,673.33 (4) 5,000.00
780,041.92

Total Federal Financial Assistance
= N/A Not Available

- 25-

$ 1,441,833.97 $ 2,050,295.72

CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30,1998

SCHEDULE "2"

Notes to the Schedule of Expenditures of Federal Awards
(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the current fiscal year.
(2) Expenditures for the School Breakfast Program were not maintained separately and are included in the 1998 National School Lunch Program.
(3) Expenditures on this program/project were not maintained on a program/project basis. (4) 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.

-26-

CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30,1998

SCHEDULE "3"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Quality Basic Education General and Career Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement 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 Ad Valorem Tax Adjustment Advanced Placement Exams At-Risk Summer School Program Environmental Science Program Health Insurance Mentoring Program Mentor Teacher Program Preschool Handicapped Program Remedial Summer School Program Teachers'Retirement Lottery Programs Exceptional Growth-Capital Outlay Instructional Technology Assistive Technology Classroom Technology
Human Resources, Georgia Department of Family Connection
Juvenile Justice, Georgia Department of Family Connection
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$ 7,541,751.00
1,458,167.00 274,978.00 317,219.00 95,325.00
2,085,650.00
213,056.00 68,586.00
256,866.00 368,797.00
85,738.00 30,822.00 28,842.00 -1,871,402.00 -1,544,974.00 1,653,541.00 439,062.00
$
50,000.00
75,887.00 52.50
16,933.41 500.00
300,383.97 5,000.00 7,332.00
52,108.00 9,754.70
22,124.54

$ 7,541,751.00
1,458,167.00 274,978.00 317,219.00 95,325.00
2,085,650.00

90,216.00

213,056.00 68,586.00
256,866.00 368,797.00
85,738.00 30,822.00 28,842.00 -1,871,402.00 -1,544,974.00 1,653,541.00 439,062.00 90,216.00 50,000.00

75,887.00 52.50
16,933.41 500.00
300,383.97 5,000.00 7,332.00
52,108.00 9,754.70
22,124.54

$ 1,012,118.00

1,012,118.00

9,092.00 96,390.00

9,092.00 96,390.00

50,000.00

50,000.00

45,661.11

45,661.11

731,400.63

731,400.63

40,711.00

40,711.00

See notes to the general purpose financial statements.

$ 12,082,811.12 $ 1,022,759.74 $ 1,012,118.00 $ 14,117,688.86
- 27-

CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30,1998

SCHEDULE "4"

PROJECT
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 the same come due on July 1, 1998 through July 1, 2003
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

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED
COST (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS

$ 2,916,697,50 $ 2,916,697.50 $

0,00 $

0.00

12,743,302.50 12,743,302,50 1,831,457.47

0,00

$ 15,660,000.00 $ 15,660,000.00 $ 1,831,457.47 $

0.00

(1) The Board's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax.
(2) The Board's current estimate of total cost for each project. Includes all cost from project inception to completion.
(3) The voters of City of carrollton 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 project.

See notes to the general purpose financial statements.

-28-

CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY SCHEDULE OF EXPENDITURES LOTIERY PROGRAMS YEAR ENDED JUNE 30,1998

SCHEDULE "5"

EXPENDITURES

INSTRUCTIONAL TECHNOLOGY

ASSISTIVE

CLASSROOM

TECHNOLOGY TECHNOLOGY

PRE-KINDERGARTEN PROGRAM

Current

Instruction

$

Support Services

Pupil Services

Improvement of Instructional Services

General Administration

Business Administration

Maintenance and Operation of Plant

Other Support Services

Debt Service

9,092.00 $

18,702.00 $

77.688.00

613,019.21 $
98,445.57 6.898.66 2.136.74 6.00
44,171.68 1,699.17

TOTAL
640,813.21
98.445.57 6.898.66 2,136.74 6.00
44.171.68 1,699,17
77.688.00

Total Expenditures

$

9,092.00 $

96,390,00 $

766.377.03 $ -=....,;;;8.7..1;,r,;.8;;;;5.9..;;;,03;.

RECAP: Salaries and Benefits Pre-Kindergarten Program Other Expenditures Instructional Technology Assistive Technology Classroom Technology Pre-Kindergarten Program

$ 679.728.36
9,092.00 96.390.00 86.648,67

$ 871,859.03

See notes to the general purpose financial statements.

-29-

CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30.1998

SCHEDULE "6"

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

$

9,592,115.00 $

2;;.;5=2=,5;.;;.8.;;;.;3'.;;;.00;;..

$

9,833,808.15

1,457,188.54 $ _ _1.;,.l,,3.;;;.;7...;;3=,9;.;;.3.;;;.;0'.;;;.81~

$

11,290,996.69

-99,218.83 $ _---.;1;..;.1.l..:1.,.=,.91.;.:..7,~7...:..7=.8.=,.6

Amount of Underexpenditure for Total Allotment

$

0.00 $=====O=.O:=:O

Note: (1) Salary accruals (July and August 1998 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 1997 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. - 31 -

CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30,1998

GENERAL AND CAREER EDUCATION PROGRAMS Kindergarten (*) Grades 1 - 3 (*) Sub-Total- K-3 Grades 4 5 (*) Grades 6 - 8 (*) Grades 9 - 12 (*) High School Laboratories (*) Vocational Education Laboratories (*) Total General and Career Education Programs
SPECIAL EDUCATION PROGRAMS Regular Programs Category I (*) Category II (*) Category III (*) Category IV (*) Sub-Total- Regular Category VI (Gifted) (*) Total Special Education Programs
rl REMEDIAL EDUCATION PROGRAM
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 (*) Identifies Fourteen Weighted Programs. (1) Salary accruals (July and August 1998 Deferred
Salaries) reported as expenditures In the General Purpose Financial Statements are not Inciuded on this analysis in order to comply with program guidelines. See notes to the general purpose financial statements.

ALLOTMENTS FROM DEPARTMENT OF EDUCATION

REQUIRED

ORIGINAL

~

ORIGINAL

MID-TERM

$

882,537.00

$

794.283.30 $

2,231,599.00

2.008,439.10

$ 3,114.136.00 90 $ 2.802,722.40 $

918.182.00 90

826.363.80

1,533,980.00 90

1.380,582.00

995,282.00 90

895,753.80

627,151.00 90

564,435,90

353,020.00 90

317,718.00

$ 7,541,751.00

$ 6,787,575.90 $

0.00 0.00
0.00

$ 1,206,426.00

$ 1,085,783.40 $

0.00

$ 1.206.426.00 90 $ 1,085.783.40 $

251,741.00 90

226,566.90

$ 1,458,167.00

$ 1,312.350.30 $

$

274,978.00 90 $

247.480.20 $

$ 9.274.896.00

$ 8,347.406.40 $

$

260.125.00 90 $

234.112.50 $

57,094.00 90

51.384.60

$

317.219.00

$

285,497.10 $

$ 9,592.115.00

$ 8,632.903.50 $

0.00
0.00 0.00 0.00
0.00 0.00
0.00

$

27,654.00

67,671.00

$

27,654,00 $

67.671.00

$

95,325.00 100 $

95,325.00 $

(2) Salary accruals (July and August 1997 Deferred Salaries) reported as expenditures In the prior year General Purpose Financial Statements are Included on this analysis as required by program guidelines.

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0,00 0.00
0.00

SCHEDULE .,.

TOTAL REQUIRED

ACTUAL EXPENDITURES

SALARIES (1)(2) OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$

794,283.30 $

782,373.15 $

72,960.80 $

855,333.95

2,008,439.10

2,049,107.44

362,070.15

2,411,177.59

$ 2,802,722.40 $ 2,831,480.59 $

435,030.95 $ 3,266,511.54 $

0.00

826,363.80

1,082,590.40

106,997.05

1,189,587.45

0.00

1,380,582.00

1,563,387.05

121,268.04

1,684,655.09

0.00

895,753.80

714,434.75

209,481.08

923,915.83

0.00

564,435.90

1,213,042.14

385,267.34

1,598,309.48

0.00

317,718.00

517,605.21

39,672.30

557,277.51

0.00

$ 6,787,575.90 $ 7,922,540.14 $ 1,297,716.76 $ 9,220,256.90

$ 1,085,783.40 $

179,038.46 $ 194,084.12 607,879.55
50,075.44

1,668.47 $ 2,763.91 66,428.58
301.14

180,706.93 196,848.03 674,308.13
50,376.58

$ 1,085,783.40 $ 1,031,077.57 $

71,162.10 $ 1,102,239.67

0.00

226,566.90

270,775.85

5,051.95

275,827.80

0.00

$ 1,312,350.30 $ 1,301,853.42 $

76,214.05 $ 1,378,067.47

$

247,480.20 $

276,234.49 $

0.00 $

276,234.49

0.00

$ 8,347,406.40 $ 9,500,628.05 $ 1,373,930.81 $ 10,874,558.86

$

234,112.50 $

333,180.10

$

333,180.10

0.00

51,384.60

$

83,257.73

83,257.73

0.00

$

285,497.10 $

333,180.10 $

83,257.73 $

416,437.83

$ 8,632,903.50 $ 9,833,808.15 $ 1,457.188.54 $ 11.290,996.69 $

0.00

$

27,654.00.

67,671.00

$ ===95=,3=2;:5;:.0,,=0

$

97,158.07 $

97,158.07

0.00

0.00

$

97.158.07 $

97,158.07 $ .........-==.....==0..0..0..

33

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

RUSSELL W. HINTON
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND A-CCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
August 26, 1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe City ofCarrollton Board ofEducation
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, 1998, and have issued our report thereon dated August 26, 1999. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditin~ Standards, issued by the Comptroller General ofthe United States.
We did not observe the taking of either the Federal donated commodities inventory or the purchased foods inventory at June 30, 1998, nor could we satisfy ourselves as to the accuracy of the amounts stated as ~ventories through alternative procedures.
Compliance
As part ofobtaining reasonable assurance about whether City of Carrollton Board of Education's financial statements are free ofmaterial misstatement, we performed tests ofits 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.

98YB-40

Internal Control Over Financial Re.porting
In planning and perfonning our audit, we considered City of Carrollton Board ofEducation's internal control over financial reporting in order to detennine 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 operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in our 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 ofFindings and Questioned Costs as item FS-7661-98-01.
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 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 ofperfonning their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, the reportable condition described above is considered to be a material weakness.
This report is intended solely for the information and use ofmanagement, members ofthe City of Carrollton 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,
~. lfLu).~ Russell W. Hinton State Auditor
RWH:gp 98YB-40

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w', Suite 214 Atlanta, Georgia 30334-8400
August 26, 1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members of the State Board ofEducation
and Superintendent and Members ofthe City ofCarrollton Board ofEducation
REPORT ON COMPLIANCE WITH REQUlREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of City of Carrollton Board of Education with the types of compliance
requirements described in the u.s. Office ofManagement and Budget (OMB) Circular A-I33 Compliance
Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 1998. City ofCarrollton Board ofEducation's major Federal programs are identified in the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements oflaws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of City 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.
Vfe conducted our audit of compliance in accordance with generally accepted auditing standards; the
standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and OMB Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the City of 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 ofCarrollton Board ofEducation's compliance with those requirements.

98SA-1O

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, 1998.
Internal Control Over Compliance
The management of City of Carrollton Board ofEducation 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 ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133.
Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level ofrisk 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 nonnal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended solely for the infonnation and use ofmanagement, members of the City of Carrollton Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should nqt be used by anyone other than these specified parties.
Respectfully submitted,
?~w.4Lk Russell W. Hinton State Auditor
RWH:gp 98SA-I0

SECTIONID AUDITEE'S ~SPONSE 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. 1998

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

7661-93-02 FS-7661-97-01

Further Action Not Warranted Unresolved - See Corrective Action/Responses

CORRECTIVE ACTIONIRESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7661-97-01

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

.-

SECTIONN FINDINGS AND QUESTIONED COSTS

CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 1998

I SUMMARY OF AUDITOR'S RESULTS

1. T):'pe 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 a scope limitation and for various departures from generally accepted accounting principles.

2. Re.portable 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 ofEducation disclosed no instances ofnoncompliance that were deemed to be material to the financial statements.

4. Re.portable 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. T):'pe ofRe.port 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 Reqyired to be Re.ported by Section .5tOUt) ofQMB 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 84.010 Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies 84.027 Individuals with Disabilities Education Act - Part B - Special Education - Flow Through 84.173 Individuals with Disabilities Education Act - Part B - Special Education- Preschool

8. T):'pe "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.

- 1-

CITY OF CARROLLTON BOARD OF EDUCATION - CARROLL COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 1998
I SUMMARY OF AUDITOR'S RESULTS 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.
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-7661-98-01 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 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.
ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
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