STATE OF GEORGIA DEPARTMENT OF AUDITS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334

AUDIT REPORT CITY OF COMMERCE BOARD OF EDUCATION
A COMPONENT UNIT OF THE CITY OF COMMERCE, GEORGIA
YEAR ENDED JUNE 30, 1994

CITY OF COMMERCE BOARD OF EDUCATION. JACKSON COUNTY - TABLE OF CONTENTS

SECTION!

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

EXHIBITS

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

GOVERNMENTAL FUND TYPES

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES ACTUAL AND BUDGET

GOVERNMENTAL FUND TYPES

5

D NOTES TO THE 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

18

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

20

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

21

SCHEDULES

I SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

22

2 ANALYSIS OF CASH AND CASH EQUIVALENTS

23

3 ACCOUNTS RECEIVABLE

24

SCHEDULE OF REVENUE

4

STATE FUNDS

25

5

LOCAL AND OTHER FUNDS

26

SCHEDULE OF EXPENDITURES BY OBJECT

6

GOVERNMENTAL FUND TYPES

27

7

LOTTERY PROGRAMS

28

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY - TABLE OF CONTENTS -

SECTION!

FINANCIAL

ADDITIONAL FINANCIAL INFORMATION

SCHEDULES

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

8

OVERALL

29

9

BY PROGRAM

30

JO SCHEDULE OF COMPENSATION AND TRAVEL OF BOARD MEMBERS

32

SECTION II
COMPLIANCE
COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS
SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS

SECTION III
INTERNAL CONTROL
REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY - TABLE OF CONTENTS -
SECTION IV FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS

SECTION I FINANCIAL

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 19, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe City of Commerce Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
Ladies and Gentlemen:
We have audited the financial statements (Exhibits A through D) ofthe City of Commerce Board of Education, as of and for the year ended June 30, 1994, as listed in the table of contents. These financial statements are the responsibility of the Board's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards, Government Auditing Standards issued by the Comptroller General of the United States, and the provisions of the Office of Management and Budget Circular A-128, "Audits of State and Local Governments". Those standards and 0MB Circular A-128 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 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 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.
94ARL-23

School activity accounts maintained at the individual schools are not included in the financial statements. To conform to generally accepted accounting principles, these accounts should be included in the financial statements.
The Board did not recognize as expenditures, in the year ended June 30, 1994, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 1994. Also funds received, subsequent to June 30, 1994, from the Georgia Department ofEducation for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1993, were improperly recorded in the year ended June 30, 1994. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the 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 financial statements of the matters referred to in the preceding paragraph, the financial statements present fairly, in all material respects, the financial position of the City of Commerce Board ofEducation as ofJune 30, 1994, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the financial statements of the City of Commerce Board ofEducation taken as a whole. The combining statements (Exhibits E through H) and the financial schedules (Schedules 1 through 10 which includes the Schedule of Federal Financial Assistance) ar~ presented for purposes ofadditional analysis and are not a required part of the financial statements of the City of Commerce Board ofEducation. Such information has been subjected to the auditing procedures applied in the audit ofthe 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 financial statements taken as a whole.
A copy ofthis r~rt 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.
:i:~
Claude L. Vickers State Auditor
CLV:cm 94ARL-23

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY -1-

EXHIBIT"A"

ASSETS
cash and cash Equivalents
Accounts Receivable
Inventories Food Donated Commodities Purchased Food
Amount to be Provided in Future Years For Payment of capital Lease Agreements

GOVERNMENTAL FUND lYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

170,880.70

8,599.60

6,003.75 $ 146,123.82

ACCOUNT GROUP GENERAL
LONGTERM DEBT

TOTALS ,Memorandum On~ JUNE 30 1994 JUNE 30 1993

179,480.30 $

169,213.74

152,127.57

20,931.61

7,108.79 2,417.12

54 019.47

7,108.79 2,417.12
54 019.47

12,463.53 2,460.86
26 265.76

Total Assets

176 884.45 $ 155 649.73 $

8 599.60 $

54019.47 $

395 153.25 $

231 335.50

L,IABII ITIES AND FUND EQUITY
LIABILITIES
cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable capital Lease Agreements
Totat Liabilities
FUND EQl JITY
Fund Balances Reserved For Bus Replacement Funds For Expired Grant Balances/ Questioned Costs For Inventories Food Donated Commodities Purchased Food For State capital outlay Projects
Unreserved Undesignated
Total Fund Equity

76,003.09 9,863.58
23,524.64
109 391.31

28,824.93
28,824.93 $ 148 059.52 176 884.45 $

7,108.79 2,417.12
$
9,525.91 $
36 732.51
46 258.42 $

8 599.60 8,599.60
8 599.60

54 019.47 54 019.47 $

76,003.09 9,863.58 $
23,524.64
54 019.47
163 410.78 $

3,139.61 22,037.59
856.50 26 265.76
52 299.46

28,824.93
7,108.79 2,417.12 8 599.60 46,950.44 $ 184 792.03 231 742.47 $

5,021.99 10,868.41
12,463.53 2,460.86
30,814.79 148 221.25 179 036.04

Total liabilities and Fund Equity $ 176 884 45 $ 155 649.73 $

8 599.60 $

54 019.47 $

395 153.25 $

231 335.50

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

2

CITY OF !:;OMMERCE BOeRD OF aDUCATION - JACKSO!:,! COU!:lIY ~OM~INEO STATEMENT QF BEVENUE EXPENDITUBES AND CcjANGE IN EY~D BALAN~~
GOVERNMENTAL FUND TYPES
YEAR ENDED JUNE 30 1994

EXHIBIT"B"

REVENUES
State Funds Federal Funds Local and Other Funds
T ot:al Revenues
~XPENQITURE;S
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 Community Service Operations Other Operations of Non-Instructional Services
Capital Outlay Debt Service
Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
QTH~B FINA[:lCING OURCES (\/SES!
Capital Lease Operating Transfers In Operating Transfers Out
Total other Financing Sources (Uses)
Excess of Revenues and other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JI II Y: l
Food Inventory - Net Change In Period Donated Commodities Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

CAPITAL PROJECTS
FUND

TOTALS {Memorandum Onli}
YEAR ENDED JUNE 30 1994 JUNE30 1993

3,292,035.23 $ 5,264.63
1157 507.82
4 454 807.68 $

161,068.95 $ 313,282.10 113 969.09
588 320.14 $

130,602.60 $

3,583,706.78 $ 318,546.73
1 271 476.91

130 602.60 $ 5 173 730.42 $

3,141,721.45 296,964.72
1 004297.09
4 442 983.26

2,787,831.91 $
120,441.36 102,045.90 140,716.61 132,122.44 269,879.07 88,248.10 435,907.10 123,301.22 77,925.72
83,905.19 31,246.50
18,574.29 1 956.80
4 414 102.21 $
40,705.47 $

208,550.70 6,622.60 86.56
48,689.95 18,211.96
725.37 22.00
7,500.00 307,081.87
238.79
597 729.80 $ -9 409.66 $

2,996,382.61 $

150,121.50

127,063.96 102,132.46 189,406.56 150,334.40 269,879.07 88,248.10 435,907.10 124,026.59 77,947.72
7,500.00 307,081.87
238.79 83,905.19 181,368.00

18,57429 1 956.80

150121.50 $ 5161 953.51

-19 516.90 $

11776.91

2,820,883.63
120,860.15 94,706.88 149,979.68 136,759.94 272,724.10 91,315.44 419,361.09 80,289.55 57,940.52 11,500.00 279,502.57
79,805.04 70,619.12
4686247.71
-243264.45

46,326.00 0.06 $
-30 022.41
16,305.67 $

1,903.91 $ -0.08
1 903.83 $

$ 28,118.50
28118.50 $

46,328.00 30,022.49 $ -30 022.49
46 328.00 $

556.92 -556.92
0.00

57,011.14 $ 119,873.31

-7,505.83 $ 59,162.73

8,599.60 $ 0.00

58,104.91 $ 179,036.04

-243,264.45 423,580.38

-5,354.74 -43.74

-5,354.74 -43.74

-1,044.67 -235.22

FUND BALANQE JU~E JQ

176,884.45 $

46,258.42 $

8,599.60 $ 231,742.47 $

179,036.04

The notes to the financial statements are an integral part of this statement -3-

Qin QE QQMMERCE BOARD OF EDUCATION - JACKSON QOlJN!Y
QOMBl~EQ TAIGMENT QF RE~NU!;S l;XPENDJTURES ~Q CHANGE I~ E!J~Q Ml ~Q~~
.!,CTs!f,l. AND BUDGET GOVERNMENTAL FUND TYPI;;
YEAR ENDED JUNE 30 1994

EXHIBIT"C-

REVENUES
State Funds Federal Funds Local and Other Funds
Total Revenues
l;;XPE!clQIT!,lRES
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 Community Service Operations Other Operations of Non-lnstructional Services
Capital Outlay Debt Service
Total Expenditures
Excess of Revenues over (under) Expenditures
QTt:lo!l FINANCIN~ SOURCES (!.lSES)
Other Sources Other Uses
T(?tal Other Financing Sources {Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1 1993
FOOD INVENTORY. iclET CHANGE IN PERIOD
Donated Commodities Purchased Food

ACTUAL PER
EXHIBIT"B"

ADJUSTMENTS

ACTUAL PER
BUDGET BASIS

BUDGET

VARIANCE FAVORABLE !l,!NFAVORABLE)

3,583,706.78 $ 318,546.73
1,271,476.91
5,173,730.42 $

0.00 $ 0.00 $

3,583,706.78 $ 3,268,600.00 $

318,546.73

203,810.00

1,271 476.91 1,258,991.00

5,173,730.42 $ 4,731,401.00 $

315,106.78 114,736.73
12,485.91
442,329.42

2,996,382.61 $
127,063.96 102,132.46 189,406.56 150,334.40 269,879.07 68,248.10 435,907.10 77,698.59 77,947.72
7,500.00 307,081.87
238.79 83,905.19 227,696.00 20,531.09
5,161,953.51 $
11,776.91 $

0.00 $
0.00 $ 0.00 $

2,996,382.61 $ 2,892,476.00 $

127,063.96 102,132.46 189,406.56 150,334.40 269,879.07 68,248.10 435,907.10 77,698.59 77,947.72
7,500.00 307,081.87
238.79 83,905.19 227,696.00 20,531.09

119,969.00 101,309.00 150,016.00 129,492.00 273,586.00 73,117.00 407,271.00 89,888.00 72,500.00
266,793.00
79,046.00 80,942.50

5,161,953.51 $ 4 736,405.50 $

11,776.91 $ -5,004.50 $

-103,906.61
-7,094.96 -823.46
-39,390.56 -20,842.40
3,706.93 -15,131.10 -28,636.10 12,189.41
-5,447.72 -7,500.00 -40,288.87
-238.79 -4,859.19 -146,753.50 -20,531.09
-425,548.01
16,781.41

76,350.49 $ -30,022.49 46,328.00 $
58,104.91 $ 179,036.04

0.00 $ 0.00 $ 0.00 $ -14,924.39

76,350.49 $ -30,022.49
46,328.00 $

0.00 $ 0.00 $

58,104.91 $ 164,111.65

-5,004.50 $ 179,890.28

76,350.49 -30,022.49 46,328.00
c;:3,109.41 -15,778.CiJ

-5,354.74

5,354.74

0.00

0.00

-43.74

43.74

0.00

0.00

FlJND BALANCE JUN!; 30 1994

231,742.47 $

-9,525.91 $

222,216.56 $ 174,885.78 $

47,330.78

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

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE FINANCIAL STATEMENTS JUNE30 1994

EXHIBIT "D"

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Commerce Board ofEducation (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. With the exception of the departures from generally accepted accounting principles disclosed in the following paragraphs, the financial statements of the Board have been prepared in conformity with generally accepted accounting principles as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting standards.
The more significant of the Board's accounting policies are described below.
REPORTING ENTITY
In evaluating how to define the government unit for financial reporting purposes, management has considered the criteria set forth in GASB Codification of Governmental Accounting and Financial Reporting Standards, Section 2100, "Defining the Financial Reporting Entity". The primary government consists of all the organizations that compose the legal entity ofthe City ofCommerce. Based upon the application of the above criteria, the City of Commerce Board of Education is determined to be a component unit of the City of Commerce, Georgia for financial reporting purposes.
Board members have decision making authority, the power to designate management, the ability to significantly influence operations, but do not have the authority to levy taxes or incur bonded indebtedness. The Board is required to submit a budget to the City Council for approval. The City Council determines the amount oftax revenues flowing to the Board.
FUND ACCOUNTING
The Board uses funds and an account group to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities.
A fund is a separate accounting entity with a self-balancing set of accounts. 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.

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CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE FINANCIAL STATEMENTS JUNE30 1994

EXIIlBIT "D"

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 financial statements.
The financial statements account for all State, Federal, Local and Other Funds under control of the 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 general 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 traditionally provided by a board of education.
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are primarily received from the Georgia Department of Education and from the Federal government to accomplish specific objectives and are required to be accounted for separately. Also included are proceeds received from State, Federal, Local and Other sources for operations of the school food services fund. This fund could be accounted for as an enterprise fund; however, the Board chooses not to provide for depreciation, but to maintain the fund on a modified accrual basis and to report the fund as a special revenue fund under governmental fund types, which is acceptable under generally accepted accounting principles for governmental entities.
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 - 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.
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CITY OF COMMERCE BOARD OF EDUCATION. JACKSON COUNTY NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1994

EXHIBIT"D"

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 ofaccounting 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 ifthey 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 departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share ofthese contracts. During fiscal year 1994, a substantial number ofpersonnel of the Board were employed for a one hundred and ninety day period beginning in late August 1993 and ending in early June 1994. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1993 and ending in August 1994. State grants to fund the State's share of these contracts were disbursed from the Georgia Department ofEducation to the Board in the same twelve months. As ofJune 30, 1994, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 1994, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1994. Also, the State's portion of the compensation paid in July and August 1994 was received and recorded as revenue in the fiscal year subsequent to June 30, 1994. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1993, were recorded in the year ended June 30, 1994. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
BUDGET
The City ofCommerce Board ofEducation has a legally authorized nonappropriated budget which is formally approved by the Board at the aggregate level. Budgets are prepared to provide a basis for funding operations and there is no legal prohibition regarding overexpenditure of the aggregate budget. The budget process begins when the Board's administration prepares a tentative aggregated 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 ofgeneral circulation in the locality. At the next regular meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and with approval of the City Council adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation.
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CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE FINANCIAL STATEMENTS JUNE30 1994

EXHIBIT"D"

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Board prepares its budget on the modified accrual basis, which is the same basis on which it presents its financial statements. The budget comparison on Exhibit "C" presents actual and budget data for all governmental funds on a combined basis. To facilitate comparison with the budget, donated and purchased food inventories as reflected on Exhibit "B" have been eliminated from fund balance.

CASH AND CASH EQUIVALENTS

COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofdeposits 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 ofgrant reimbursements due from Federal, State or other grantors 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 financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

PROPERTY TAXES

The City ofCommerce fixed the property tax levy for the 1993 tax year (calendar year) on November 20, 1993 (levy date). Taxes were due on January 20, 1994. The lien date for property taxes was January 1, 1993. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1994 since their collection meets the criteria ofGASB codification section P70.103. The City of Commerce Clerk bills and collects the property taxes for the Board ofEducation and remits the taxes collected to the Board.

The tax millage rate levied for the 1993 tax year (calendar year) for the City of Commerce Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

11..2mills

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. Donated food commodities are recorded as revenues and expenditures at the time

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CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE FINANCIAL STATEMENTS JUNE30 1994

EXHIBIT"D"

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 offund 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 ofinterfund 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 financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results ofoperations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
Note 2: DEPOSITS
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 ofinsurance, or by collateral in an amount of 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 any one of or any combination of the following:
(I) 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 ofindebtedness or other direct obligations of the United States or of the State of Georgia,
- 10 -

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE FINANCIAL STATEMENTS JUNE30 1994

EXHIBIT"D"

Note 2: DEPOSITS

(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 ofthe 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, 1994, the bank balances were $490,649.75. 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.)

The Board's deposits are classified by risk category at June 30, 1994, as follows:
Risk Category
1 2 3
Total
Note 3: NON-MONETARY TRANSACTIONS

Bank Balance
$ 200,000.00 290,649.75 0.00
$ 490 649 75

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

- 11 -

CITY OF COMMERCE BOARD OF EDUCATION. JACKSON COUNTY NOTES TO THE FINANCIAL STATEMENTS JUNE30 1994

EXHIBIT"D"

Note 4: RISK MANAGEMENT

The Board has established a limited risk management program for Unemployment Compensation. Estimated claims are budgeted by management based on known claims and prior experience. During fiscal year 1994, no claims were paid.

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The City of Commerce Board of Education has entered into various lease agreements as lessee for bus 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, 1994, were as follows:

Capital Leases

Balance July 1, 1993

$ 26,265.76

Additions

46,328.00

Deductions

18 574.29

Balance June 30, 1994

$ S~Ql24Z

At June 30, 1994, payments due, by fiscal year which includes principal and interest for these items are:

Fiscal Year Ended June 30
1995 1996 1997 1998 Total Principal and Interest
Deduct: Imputed Interest Net Present Value ofFuture
Minimum Lease Payments

Capital Leases $ 20,531.09
20,531.09 10,440.08 10 440.08 $ 61 942.34 $ 7 922.87
$ S4 Ql2 47

Note 6: SIGNIFICANT COMMITMENTS

At June 30, 1994, the Board had encumbrances in the amount of$19,239.84 for the unperformed portion of purchase orders, contracts and other commitments for goods and services associated with Lottery Programs. Lottery funds in the amount of $4,788.03 are available to fund these encumbrances. Encumbrances outstanding do not constitute expenditures or liabilities in the current year because these commitments will be honored during the subsequent fiscal year. These encumbrances are identified by Lottery Program as follows:

- 12 -

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE FINANCIAL STATEMENTS JUNE30 1994

EXHIBIT"D"

Note 6: SIGNIFICANT COMMITMENTS Distant Learning Media Center and Library Equipment
The amount described in this note are not reflected in the financial statements.

$ 1,167.00 18 072.84
$ 1923984

Note 7: 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.

Note 8: 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 public employee retirement system (PERS).

TRS provides service retirement, disability retirement and survivors benefits for its members. A member is eligible for service retirement afler 30 years ofcreditable service, regardless of age, or after 1Oyears of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service and attainment of age 55, at a reduced benefit. Retirement benefits paid to members are equal to 2% of the average of the member's two consecutive highest paid years of service multiplied by the number of years of creditable service up to 40 years. The normal retirement pension is payable monthly for life. Options are available for distribution ofthe member's monthly pension at a reduced rate to a designated beneficiary on the member's death.

Retirement benefits also include death and disability benefits. A disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The death benefit is the amount that would be payable to the member's beneficiary had the member retired on the date of death on either a service retirement allowance or a disability retirement allowance, whichever is larger. The benefit is based on the member's creditable service (minimum of 10 years of service) and compensation up to the time of disability or death.

Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting of employer contributions occurs, but the member's contributions are refunded with interest.

- 13 -

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE FINANCIAL STATEMENTS JUNE30 1994

EXHIBIT"D"

Note 8: RETIREMENT PLANS

The Board's payroll for employees covered by TRS for the year ended June 30, 1994, was $2,782,906.05; total payroll was $3,039,474.35.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Board who are covered by TRS are required to contribute 6% oftheir gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees as advised by their independent actuary. For fiscal year 1994 that rate for employer contributions was 11.81%. The interest rate assumption (rate ofreturn on investments) was 7.50%.

Total contnbutions made during fiscal year 1994 amounted to $495,636.60, of which $328,661.16 was made by the Board and $166,975.44 was made by employees. These contributions represented 11.81% (Board) and 6% (employees) of covered payroll.

TRS FUNDING STATUS AND PROGRESS The amount of the total pension benefit obligation is based on a standardized measurement established by Statement No. 5 ofthe Governmental Accounting Standards Board (GASB) that, with some exceptions, must be used by a PERS. The standardized measurement is the actuarial present value of credited projected benefits. This valuation method reflects the present value of estimated pension benefits that will be paid in future years as a result of employee services performed to date, and is adjusted for the effects of projected salary increases. A standardized measure ofthe pension benefit obligation was adopted by the GASB to enable readers of PERS financial statements to assess that PERS funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among other PERS and among other employers.

Total unfunded pension benefit obligation ofTRS as ofJune 30, 1993, was as follows:

Total pension benefit obligation

$13,912,014,000.00

Net assets available for benefits, at cost Unfunded pension benefit obligation

12 821 722 000.00
$ l 090 292 ooo 00

The measurement ofthe total pension benefit obligation is based on an actuarial valuation as of June 30, 1993. Net assets available to pay pension benefits were valued as of the same date. TRS does not make separate measurements of assets and pension benefit obligation for individual employers.

Total contributions from all employers to TRS for fiscal year ended June 30, 1994 were $521,550,000.00. The Board's contribution for the year ended June 30, 1994 of$328,661.16 was actuarially determined and represented .0630"/o of total contributions made by all participating employers.

- 14 -

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE FINANCIAL STATEMENTS
JUNE30 1994

EXHIBIT"D"

Note 8: RETIREMENT PLANS
Ten year historical trend information is presented in the 1994 TRS Component Unit Financial Report. This information is useful in assessing TRS's accumulation of sufficient assets to pay pension benefits as they become due.
PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA (PSERS)
PSERS PLAN DESCRIPTION Substantially all bus drivers, maintenance, custodial, and lunchroom personnel employed by local school systems are covered by the Public School Employees Retirement System of Georgia (PSERS). All employer's contributions are made by the State of Georgia.
PSERS provides service retirement, disability retirement and survivors benefits for its members. A member is eligible for normal service retirement after 10 years ofservice and attainment ofage 65. A member applying for service retirement with 1Oyears of service and retires between the ages of 60 and 65 receives a reduced benefit. Monthly retirement benefits paid to members are equal to $8.00 per month multiplied by the number of years of creditable service. Options are available for distribution of the member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
Retirement provisions include death and disability benefits. Disability benefits are the same as if the employee had retired at age 65 as Jong as the employee has 15 or more years of creditable service. Death benefits are dependent upon the number ofyears of service. Ifthere are Jess than ten years of service, a Jump sum refund of the employee's contributions and interest are made to the beneficiary. Ifthere are more than ten years of service, the beneficiary shall receive for life half of what the employee would have received upon retirement.
Members become fully vested after ten years of service. Ifa member tenninates with Jess than ten years of service, no vesting ofemployer contributions occurs, but the member's contributions are refunded with interest.
There were 32 employees covered under PSERS for the year ended June 30, 1994.
PSERS CONTRIBUTIONS REQUIRED AND MADE Covered employees are required by State statute to contribute $4.00 a month for the nine month school year. Unlike TRS, the Board makes no contribution to PSERS. The State of Georgia is required by statute to make employer contributions actuarially detennined and approved and certified by the PSERS' Board ofTrustees. Total contributions from employees ofthe Board made during fiscal year 1994 amounted to $1,000.00. Total contribution for all school systems made by the State of Georgia to PSERS for fiscal year ended June 30, 1994, was $9,150,000.00.
Note 9: SURETY BONDS
The School Superintendent, Mr. James N. Elliott, is bonded in the amount of$100,000.00 with the Western Surety Company, South Dakota, their Bond No. 22154066, on which premium was paid through June 1, 1995.
- 15 -

C[JX Of CQMMl;RCf BOARD OF EDUCATION JAQKSQN GQl INJ:X
COMBINING BALANCE SHEET
SPfCIAL REVfNUE FUND JUNf" 30 1994

Cash and cash Equivalents Accounts Receivable
Inventories Food Donated Commodities Purchased Food
Total Assets
j lABILITlf AND FUND EQUITY LIABll lTlfS
cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable
Total Liabilities
FUNDEOUITY Fund Balances Reserved For Inventories Food Donated Commodit1es Purchased Food
Unreserved Undesignated Total Fund Equity
Total Liabilities and Fund Equity

SCHOOL FOOD
SERVICES ~

PEP INNOVATION ~

54,487.43

4,800.00

STUDENT INFORMATION
SYSTEM PROGRAM

LOTTERY PROGRAMS

DRUG.FREE SCHOOLS AND COMMUNITIES
ACT

0.00

$ 120,911.97 $

9,563.00

7,108.79 ~
$ 64 013.34 $ ~ $

0.00 $ 120 911.97 $

9 563.00

1,179.24 ,s,575.68

4,800.00

$ ,,4,090.35 $ 6,821.62

9,563.00

s i209i1.97 s _ _~s=ss=3=.oo--

1,,08.79 ~
9,525.91
36 732.51 s _____QQ_ s _ _~o=.o~o s -----2:QQ.. s _ _ _~o=.oo-s 46258.42S_____Q;QQ_S ____o=.o_o_s-----2:QQ_S _ _ _~o=.oo--
s 64 i3.34 s ~ s _ _ _ _o__._o_o_ s 12os1i.s1 s _ __.9._5_6_3__._o_o_

See notes to the financra.l statements

-16-

EXHIBIT"E"

ELEMENTARY AND SECONDARY EDUCATION ACT

TITLE ll -

CHAPTER1

EISENHOWER

EDUCATION OF EDUCATION OF

CHAPTER2

MATHEMATICS

CHILDREN IN

DEPRIVED

BLOCK GRANT - AND SCIENCE

STATE SCHOOLS

CHILDREN

FLOW THROUGH

EDUCATION

INDIVIDUALS WITH

DISABILITIES EDLICATION ACT

TITLE VI 8

FLOW

PRESCHOOL

THROUGH

PROGRAM

TOTALS JUNE 30 1994 JUNE 30 1993

0.00 $

3,721.83 $

0.00 $

0.00

0.00 $

58,209.26 $

49,910.19

5,089.85

5,759.00

146,123.82

20,144.11

7,108.79 2417.12

12,463.53 2 460.86

0.00 $

8 811.68 $

0.00 $

0.00 $

5 759.00 $

0.00 $

213 858.99 $

84 978.69

1,862.72 6,948.96
8 811.68

5,759.00 5 759.00

134,212.35 9,863.58 $
23,524.64
167 600.57 $

2,921.87 22,037.59
856.50
25 815.96

0.00 $ 0.00 $
0.00 $

0.00 $ 0.00 $
8 811.68 $

0.00 $ 0.00 $
0.00 $

0.00 $ 0.00 $

0.00 $ 0.00 $

0.00 $

5 759.00 $

0.00 0.00 $

7,108.79 $ 2417.12 9,525.91 $
36 732.51 46 258.42 $

12,463.53 2 460.86
14,924.39
44 238.34 59162.73

0.00 $

213 858.99 $

84 978.69

-17-

CITY OF COMMERCE BQARD OF EDUCATION - JACKSQN CQLJNTY
COMBINING STATEMENT OF RfVENl If fXPfNQITURES AND CHANGES IN FLJNQ BAI ANCES
SPECIAL REVl;NU FUND
YfAR fNDfQ JUNE 30 1994

state Funds Federal Funds Local and Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration Student Transportation Services Central Support Services Other Support Services Food Services Operation Community Service Operations
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Operating Transfers In Operating Transfers OUt
Total Other Financing Sources (Uses)
Excess or Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUNQ BALANCf II JI Y 1
Food Inventory - Net Change In Period
Donated Commodities Purchased Food
FUND BALANCE JUNE 30

SCHOOL FOOD
SERVICES ~

PEP INNOVATION PROGRAM

STUDENT INFORMATION
SYSTEM PROGRAM

LOTTERY PROGRAMS

DRUG-FREE SCHOOLS ANO COMMUNITIES -~A~CT~-

23,616.00 $

4,800.00 $

161,990.95

113 969.09 - - - -

500.00 $ 132,152.95 $

9,563.00

$ 29957s.~s~s _ _~5=00=.o~os 132152.95$ _ _~9=5=63=.oo~

5,020.44 86.56

840.00 $ 84,719.91 $

9,563.00

48,689.95

$ 307,061.67

$ 307081.87 $ ~ $ _ _-=Bce,40c.:.0=.0 $ 133409.86 $ _ _.=9.:5:,63=.00"'-

$ -7505.83 $ ~ $

-340.00 $ ~ $ _ _ _~0=.00"'-

307.00 $

340.00 $

1,256.91

-7,505.83 $

0.00 $

0.00 $

0.00 $

0.00

59,162.73

0.00

0.00

0.00

0.00

-5,354.74 ~

$ 46258.42 S ~ s _ _.....:0"'.00;:;.S___J!.22.S _ _ _..;0::;:.OO:::.

See notes to the financial statements

EXHIBIT''F''

ELEMENTARY AND SECONDARY EDUCATION ACT

TITLE IJ-

CHAPTER1

EISENHOWER

EDUCATION OF EDUCATION OF

CHAPTER2

MATHEMATICS

CHILDREN IN

DEPRIVED

BLOCK GRANT - AND SCIENCE

STATE SCHOOLS

CHILDREN

FLOW THROUGH EDUCATION

INDIVIDUALS WITH

DISABILITIES EDUCATION ACT

TITLE VI B

FLOW

PRESCHOOL

THROUGH

PROGRAM

TOTALS YEAR ENDED JUNE 30 1994 JUNE 30 1993

706.63 $ 706.63 $

58,264.12 $ 58 264.12 $

7,148.00 $ 714800 $

7,921.40 $ 7 921.40 $

52,864.00 $

$ 14,824.00

52 864.00 $

14 824.00 $

161,068.95 $ 313,282.10 113 969.09
588320.14 $

29,816.00 293,216.63 117 017.87
440 050.50

706.63 $

58,264.12 $

706.63 $ 0.00 $

58264.12 $ 0.00 $

0.00 $ 0.00

0.00 $ 0.00

0.00 $

0.00 $

7,128.41 $ 19.59
7 148.00 $ 0.00 $

7,921.40 $
7 921.40 $ 0.00 $

27,304.58 $ 1,602.16

12,102.65 $

15,471.02 725.37 22.00
7,500.00
238.79
52 863.92 $
0.08 $

2,721.35
14 824.00 $ 0.00 $

208,550.70 $
6,622.80 86.56
48,689.95 18,211.96
725.37 22.00
7,500.00 307,081.87
238.79
597 729.80 $
-9 409.66 $

110,603.18 6,732.04
11,664.97 1,768.75
11,500.00 279,502.57
421 771.51 18 278.99

0.00 $ 0.00

0.00 $ 0.00

-0.08 -0.08
0.00 $ 0.00

0.00 $ 0.00

1,903.91 $ -0.08
1 903.83 $
-7,505.83 $ 59,162.73
-5,354.74 43.74

556.92
556.92
18,835.91 41,806.71
-1,044.67 -235.22

0.00 $

000 $

0.00 $

0.00 $

46 258.42 $

59162.73

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30 1994

EXHIBIT"G"

Cash and Cash Equivalents

REGULAR

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION
PROJECT 95/94S-771-088

TOTAL JUNE 301 1994

$

0.00 $

8,599.60 $~====8.i;,5;.;9;,;;9;,;;.6,;;.0

FUND EQUITY

Fund Balances Reserved For State Capital Outlay Projects

Unreserved

Undesignated

$

Total Fund Equity

$

$ 0.00 0.00 $

8,599.60 $ 0.00

8,599.60 0.00

8,599.60 $

8,599.60

See notes to the financial statements.

- 20 -

CITY OF COM MERCE BOARD OF EDUCATION - JACKSON COUNTY

EXHIBIT "H"

COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES

CAPITAL PROJECTS FUND

YEAR ENDED JUNE 30 1994

REVENUES State Funds
EXPENDITURES Capital Outlay Building and Building Improvements
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

REGULAR

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION
PROJECT 95/94S-771-088

TOTAL YEAR ENDED JUNE 30, 1994

$

0.00 $

130,602.60 $ _ _..c13""0'-'-,6"-'0c.=2cc.6=0

$

5,007.50 $

$ -5,007.50 $

145,114.00 $ -14,511.40 $

150,121.50 -19,518.90

5,007.50

$

0.00 $

0.00

23,111.00
8,599.60 $ 0.00

28,118.50
8,599.60 0.00

FUND BALANCE JUNE 30

$

0.00 $

8,599.60 $

8,599.60

See notes to the financial statements.

-21 -

CJIY OF COUUFRCE BOARD OF fpug.mQN ~ l.&QKSON COUNTY SCMfQlJU; OF FEQEBAJ flNANClAb ASSl$JANCE
YEAR ENQEP JUNE 30 19$4

SCHEDULE "1"

FUNDING AGENCY
PROGRAM/GRANT
AQricullule, u. s. Department"'
Through Georgia Department d Education Food and Nutrition Program Food Services School Brealdaol Program 199>4Grant National School lunch Program 199>4 Grant Food Distribution Program (1)

Total U.S. Department d ,lgriculture

Education, U. S. Department d Through Georgia Department d Education Drug-Free Schools and Communities Ad. 199>4 Grant Elemenlaty and Secondary Education Id Chapl8r 1 Education d Children in State Schoofs

1993 Regular 199>4 Regular Education d Daprived Children
1993 Regular
1994RegU.r Chapl8r2
Block Grant. Flow Through 199>4 Regular
TIiiou Eisenhower Mathematics and Science Eduootion 1993 Regular 199>4 Regular

lndMduals - DioalMlitiaa Education /Id TllloVI, B Flow Through 1983 RegU.r

1993Carry-()wf 199>4 Regular

Pr-'1oo1Program 1993Regular

1993 Cany-0.lor 199>4 Regular

Through -

Georgia Regional Educational

SeMce/,Qer>Cy

Voeotional Ed..,._ Basic Grants to States

Toch Prep Program

Total U.S. Department d Education

CFDA NUMBER

AWAADS IN PERIOD

FEDERAL FUNDS RECEIVED IN PERIOD(NET OF REFUNDS)

FEDERAL REVENUE INPERIOO

EXPENDITURES INPERIOO

10.563 $
10.555 10.550

18,354.69$
121,388.47 21~-46.78
161990.85 $

18,354.69 $
121,389.47 NIA
140744.18 $

18,354.69
121,388.47 $ 21~-46.78
161990.85 $

(2)
285,835.08 (3) 21~-46.78
307081.87

84.186 $

9,563.00

8,563.00 $

8,563.00

84.008 84.008 84.010 84.010
84.151

$ 708.00
61,986.00
7,126.00

884.82 708.00 8,312.76 53,17427
7,148.00

706.63 58,264.12
7,148.00

706.63 58,264.12
7,148.00

84.184 84.184

7,000.00

2,700.00 7,000.00

821.40 7,000.00

821.40 7,000.00

84.027 84.027 84.027
84.173 84.173 84.173

8,105.00 46,944.00
5,425.00 8,398.00

1,000.05 8,105.00 38,000.00
2,531.38 5,425.00 8,388.00

8,105.00 43,758.00
5,425.00 8,398.00

8,105.00 43,758.82
5,425.00 8,398.00

84243

5~.63 162520.63 $

14538828 $

5284.63 156555.78 $

(4) 151291.07

Total Fadonil Financial Assislanc:e

324511.58 $

286112.44 $ 318546.73 $

The Boord had no majo< programs as defined by the Single Audit/Idol 1884.

(1) The amounts shown for the Food Distribution Program represent, the Federally assigned valued nonmonnry assistance for donated commodities received and/or consumed by the system during the current fiscal year.
(2) Expenditure$ for the School Breakfast Program were not maintained separately and are included in the 199,4 National School lunch Program.
(3) Expenditures for this program include State, and/or Local and Other Funds. Expenditures are not maintained by fund source.
(~) Expenditures on this program were not maintained by fund source.

See notes to the financial statements.

22

4583n.84

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY ANALYSIS OF CASH AND CASH EQUIVALENTS JUNE 30 1994

SCHEDULE "2"

NONINTEREST BEARING ACCOUNTS
First Commerce Bank, Commerce, Georgia
INTEREST BEARING ACCOUNTS
First Commerce Bank, Commerce, Georgia
Sweep Accounts No. 003-280-6 (4.35%) No. 000-081-8 (4.30%)

$

3.22

$ 48,988.29 54,485.70

103,473.99

$ 103,477.21

See notes to the financial statements.

- 23 -

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY ACCOUNTS RECENABLE JUNE 30 1994

SCHEDULE 3

City of Commerce City Wide School Tax
Education, Georgia Department of Lottery Programs Computers in Classrooms Distant Leaming Media Center and Library Equipment Safe Schools Federal Programs Drug-Free Schools and Communities Act ESEA- Chapter 1 Education of Deprived Children Individuals with Disabilities Education Act Title VI, B - Flow Through Other State Programs Innovation Program
Northeast Georgia Regional Educational Service Agency Vocational Education Federal Funds

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

739.12

$

739.12

$

43,884.00

43,884.00

1,778.00

1,778.00

48,880.97

48,880.97

26,369.00

26,369.00

9,563.00

9,563.00

5,089.85

5,089.85

5,759.00

5,759.00

4,800.00

4,800.00

5,264.63

5,264.63

$

6,003.75 $ 146,123.82 $ 152,127.57

See notes to the financial statements.

- 24 -

CITY OF COMMERCE BOARD OF EDUCATION -JACKSON COUNTY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 1994

SCHEDULE "4"

AGENCY/FUNDING

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

GRANTS

Educafion, 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

In-School Suspension

Mid-term Adjustment

Local Fair Share

Educational Equalization Funding Grant

Food Services

Vocational Education

Other State Programs

Innovative Programs

Mentor Teacher Program

Preschool Handicapped Program

Supervision and Assessment of Student and

Beginning Teachers and Performance-

Based Certification

Teachers' Retirement

Lottery Programs

Algebra Classrooms

Computers in Classrooms

Distant Learning

Media Center and Library Equipment

Safe Schools Grant

1,880,584.00 432,028.00 10,968.00 79,988.00 27,233.00 559,856.00
61,946.00 11,362.00 73,210.00 68,038.00 21,266.00 -267,446.00 305,833.00
2,708.07
720.00 16,654.00
150.00 6,937.16

23,616,00
4,800.00
2,316.00 53,000.00
1,778.00 48,689.95 26,369.00

$ 1,880,584.00 432,028.00 10,968.00 79,988.00 27,233.00 559,856.00
61,946.00 11,362.00 73,210.00 68,038.00 21,266.00 -267,446.00 305,833.00 23,616.00
2,708.07
4,800.00 720.00
16,654.00
150.00 6,937.16
2,316.00 53,000.00
1,778.00 48,689.95 26,369.00

Financing and Investment Commission, Georgia State Reimbursement on Construction Project

$ 130,602.60

130,602.60

CONTRACTS Education, Georgia Department of Student Information System

_____

500.00 _ _ _ _ _

500.00

$ 3,292,035.23 $ 161,068.95 $ 130,602.60 $ 3,583,706.78

See notes to the financial statements.

- 25 -

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF LOCAL AND OTHER REVENUE YEAR ENDED JUNE 30 1994

SCHEDULE 5

Taxes City Wide School Tax
Other Commodity Rebates Interest Earned Lost and Damaged Books Recovery from Antitrust Lawsuit Rent Sales Meals School Assets Shared Service Contributions Jackson County Board of Education City of Jefferson Board of Education Tuition Other

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 1,099,410.02

$ 1,099,410.02

$ 8,882.90
267.45
585.00
772.50
37,801.38 5,113.57 3,125.00 1,550.00

1,099.28 1,834.26
640.35
110,395.20

1,099.28 10,717.16
267.45 640.35 585.00
110,395.20 772.50
37,801.38 5,113.57 3,125.00 1,550.00

$ 1,157,507.82 $ 113,969.09 $ 1,271,476.91

See notes to the financial statements.

- 26 -

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF EXPENDITURES BY OBJECT GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30 1994

SCHEDULE "6"

GENERAL FUND

SPECIAL REVENUE
FUND

TOTAL

EXPENDITURES

Operating Costs

Salaries

$

Employee Benefits

Travel of Employees

Professional and Technical Services

Compensation and Travel of Board Members

Water, Sewer and Cleaning Services

Repair and Maintenance Services

Rents

Insurance

Communications

Commodity Hauling

Shared Services

Other Purchased Services

Supplies

Energy

Food Usage

Books, Textbooks and Periodicals

Dues and Fees

Other Expenditures

2,845,234.75 $ 758,908.39 9,915.98 19,571.45 3,822.52 835.41 79,291.60 18,912.97 61,185.95 10,885.81
69,503.04 79,533.86 111,037.52 190,937.45
23,721.86 11,583.25
5,128.25

194,239.60 $ 33,057.24 1,316.25 34,041.86
5,795.54
1,261.98 1,297.67
73,656.13 11.59
127,822.52 1,303.85 1,345.50

3,039,474.35 791,965.63 11,232.23 53,613.31 3,822.52 835.41 85,087.14 18,912.97 61,185.95 12,147.79 1,297.67 69,503.04 79,533.86 184,693.65 190,949.04 127,822.52 25,025.71 12,928.75 5,128.25

Nonoperating Costs Principal and Interest Building and Building Improvements Equipment

20,531.09 31,246.50 62,314.56

122,580.07

20,531.09 31,246.50 184,894.63

Total Expenditures

$ 4,414,102.21 $ 597,729.80 $ 5,011,832.01

See notes to the financial statements.

- 27 -

CITY OE COMMERCE ROARP QF EDUCATION - JACKSON COUNTY SCHEDULE QF EXPENDITURES BY OBJECT i OJIERY PROGRAMS YEAR ENDED JUNE 3Q 1994

SCHEDULE"r

EXPENPITIJRES
Operating Costs Purchased Professional and Technical Services Supplies
Nonoperating Costs Equipment

ALGEBRA CLASSROOMS

COMPUTERS IN
CLASSROOMS

DISTANT LEARNING

MEDIA CENTER
AND LIBRARY EQUIPMENT

SAFE SCHOOLS
GRANT

2.316.00 $

1,997.56 $ 52 258.45

$ 1,778.00

1,564.75 22,192.70
24932.50 $

26 369.90

TOTAL
1,564.75 28,28426 103560.85

Total Expenditures

2 316.00 $

54 256.01 $

1 778.00 $

48689.95 $

26 369.90 $ 133409.86

See notes to the financial statements.

28

CITY OF COMMERCE BOARD OF EDUCATION-JACKSON COUNTY ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30 1994

SCHEDULE "8"

Minimum Expenditure Requirements (Total Allotment)
Expenditures on Combined Program Basis Salaries Operations
Less: Expenditures for Media Center Programs in Excess of Total Media Allotment Expenditures for Staff Development Programs in Excess of Total Staff Development Allotment for: Cost of Instruction
Expenditures per Audit

THIRTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

STAFF DEVELOPMENT
PROGRAM

$

2,426,281.00 $

27,233.00

$

2,633,514.08

150,266.97 $

$

2,783,781.05 $

28,103.27 28,103.27

-59, 157.95

$

2,724,623.10 $

-18,829.27 9,274.00

Amount of Underexpenditure for Total Allotment

$

0.00 $ ===1=7=,9=5=9.=0=0

See notes to the financial statements.

- 29 -

cax OF COMMERCE OOARD OF Ent JCATION - 1Ac1<soo m ,NIX ANAi YIS QF MINIMUM fXPfNQITIIRF REQI IIRfMENTS - BY PBOOBAM
GENERAi FLJNQ QIJAI ITY RASIC EPVCAT1QN PROGRAMS
YfAB fNQfP II lNE 30 1994

GfNfRAI ANQ CARffR EPtJCATION PRQGRAMS
Kindergarten (1 Grades 1-3 (1
Sub-Total K.J Grades 4- 5 (1
Grades 6 - 8 (1
Grades 9-12 () High School Laboratories () Vocational Education Laboratories ()
Total General and Career Education Programs SPfCIAI fntJCATION PROGRAMS
Regular Programs Catego,y I (1 Catego,y Ii (1 Catego,y Ill (") Itinerant Supplemental Speech Sub-Total - Regular Catego,y V (Gifted) (1 Total Special Education Programs
RfMfOIAI fQlJCAJIQN PROGRAM,, MfOIA r.fNTfR PROGRAMS
Total Thirteen Weighted and Media Center
STAFF QfVf[ OPMfNI PRQGRAMS (1) Cost of Instruction Professional Development
Total staff Development
(j Identifies Thirteen Weighted Programs Note (1) $3,169.00 of the allotment for Professional
Development has been transferred to Cost of Instruction as authorized by OCGA 20-2-182
See notes to the financial statements

ALLOTMENTS FROM DEPARTMEITT OF EDUCATION

REQUIRED

TOTAL

ORJG1NAL ~

ORIGINAL

MID-TERM

REQUIRED

183,567.00

165,210.30 $

504,751.00

454 275.90

688,318.00 90 $

619,486.20 $

229,030.00 90

206,127.00

433,976.00 90

390,578.40

155,115.00 90

139,603.50

264,127.00 90

237,714.30

110 018.00 90

99 016.20

1 880,584.00

1 692 525.60 $

0.00 $

165,210.30

454 275.90

0.00 $

619,486.20

26,713.00

232,840.00

390,578.40

139,603.50

5,500.00

243,214.30

1 000.00

100 016.20

33 213.00 $ 1725738.60

420,384.00

378,345.60 $

-10,500.00 $

367,845.60

420,384.00 90 $ 11,644.00 90
432,028.00 10,968.00 90 $ 79,988.00 90 $

378,345.60 $ 10479.60
388 825.20 $ 9 871.20 $
71 989.20 $

-10,500.00 $
-10 500.00 $ 0.00 $ 0.00 $

367,845.60 10 479.60
378 325.20 9 871.20
71 989.20

$ 2,403,568.00

2,163,211.20 $

22 713.00 $ 2,185,924.20

9,274.00 100 $ 17 959.00 100

9,274.00 $ 17 959.00

27,233.00

27,233.00 $

0.00 $

9,274.00 17 959.00

o.oo s _ _2_1._,23_3_._oo..,

2,430,801.00

2,190,444.20 $

22,713.00 $ 2,213,157.20

30

SCHEDULE"9''

REQUIRED ALLOTMENT

SALARIES ACTUAL

DISTRIBUTION BY RESPECTIVE PORTIONS

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

REQUIRED ALLOTMENT

OPERATIONS ACTUAL

AMOUNT OF UNDEREXPENDJTURE
FOR REQUIRED ALLOTMENT

161,125.20 $

204,411.49

4,065.10 $

4,251.15

440,645.40

499,403.60

13,630.50

14 641.28

601,770.60 $

703,815.09 $

0.00

17,715.60 $

18,892.43 $

0.00

226,670.30

326,459.79

0.00

5,969.70

6,995.67

0.00

379,626.30

466,546.54

0.00

10,952.10

12,756.25

0.00

133,791.30

138,123.55

0.00

5,812.20

6,359.46

0.00

233,356.60

343,950.27

0.00

9,857.70

9,953.58

0.00

87,802.30

130,732.58

0.00

12,213.90

19,753.89

0.00

1 663,217.40 $ 2 129,629.82 $

0.00

62,521.20 $

74,713.28 $

0.00

26,790.30 $ 97,838.40 232,691.40

25,213.17 103,329.77 228,777.77

1,293.30 $ 2,183.40 5,966.10
346.50 736.20

747.57 2,226.38 49,687.14

357,320.10 $

357,320.71 $

0.00

10,525.50 $

52,661.09 $

0.00

10 206.00

17 758.70 $

0.00

273.60

292.66 $

0.00

367 526.10 $

375,079.41

10,799.10 $

52,953.75

9,706.50 $

12,057.94 $

0.00

164.70 $

200.90 $

0.00

56,326.50 $

116 746.91 $

0.00

15,662.70 $

22,399.04 $

0.00

2,096,776.50 $ 2,633,514.08 $

0.00

89,147.70 $

150,266.97 $

0.00

2,096,776.50 $ 2,633,514.08 $

9,274.00 $ 17,959.00

28,103.27 $ 0.00

0.00 17 959.00

27,233.00 $

28,103.27 $

17,959.00

0.00

116,380.70 s

178,370.24 $

17,959.00

31

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF COMPENSATION AND TRAVEL OF BOARD MEMBERS
YEAR ENDED JUNE 30 1994

SCHEDULE "10''

BOARD MEMBER ADDRESS
Ms. Mary Seabolt, Chairperson (} 236 Willow Street Commerce, Georgia 30529
Mr. Richard Chambers () P. 0. Box275 Commerce, Georgia 30529
Mr. Bill Davis () 85 Shankle Road Commerce, Georgia 30529
Mr. Riley Harris, Sr. 91 Ridgeway Street Commerce, Georgia 30529
Mr. Keith Massey 164 Andrew Jackson Street Commerce, Georgia 30529
Mr. Arthur Pattman ()
P. o. Box721
Commerce, Georgia 30529
Mr. Lanny Pope () 1271 Hospital Road Commerce, Georgia 30529
Mr. J. Nolan Spear, Jr. P. 0. Box 103 Commerce, Georgia 30529
Ms. Paula Tolbert 818 Belmont Street Commerce, Georgia 30529

COMPENSATION

TRAVEL

$

655.00 $

455.94

350.00

36.01

350.00

68.29

235.00

15.00

200.00

80.00

350.00

350.00

287.28

200.00

175.00

15.00

() Denotes Board Members Serving as of June 30, 1994

$

2 865.00 $

957.52

See notes to the financial statements.

- 32 -

SECTION II COMPLIANCE

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 19, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe City of Commerce Board ofEducation
COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of the City of Commerce Board ofEducation as of and for the year ended June 30, 1994, and have issued our report thereon dated June 19, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the financial statements.
We conducted our audit in accordance with generally accepted auditing standards and 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.
Compliance with laws, regulations, contracts, and grants applicable to City of Commerce Board ofEducation is the responsibility ofthe Board's management. As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we performed tests of the Board's compliance with certain provisions of laws, regulations, contracts, and grants. However, the objective of our audit of the financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion.
Material instances of noncompliance are failures to follow requirements or violations of prohibitions, contained in laws, regulations, contracts, or grants, that cause us to conclude that the aggregation of the misstatements resulting from those failures or violations is material to the financial statements. The results of our tests of compliance disclosed a material instance ofnoncompliance, which is described in the Schedule of Findings and Improper or Questioned Costs.
94CRL-20A

As described in the Schedule of Findings and Improper or Questioned Costs, the material instance of noncompliance noted above has been corrected in the financial statements.
We considered this material instance ofnoncompliance in forming our opinion on whether the fiscal year 1994 financial statements are presented fairly, in all material respects, in conformity with generally accepted accounting principles, and this report does not affect our report dated June 19, 1995 on those financial statements.
Except as described above, the results ofour tests of compliance indicate that with respect to the items tested the Board complied, in all material respects, with the provisions referred to in the third paragraph of this report, and with respect to items not tested, nothing came to our attention that caused us to believe that the Board had not complied, in all material respects, with those provisions.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~~~
Claude L. Vickers State Auditor
CLV:cm 94CRL-20A

CLAUDE L. VICKERS
STATE AUOITOR (404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 19, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe City of Commerce Board ofEducation

SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS

Ladies and Gentlemen:

We have audited the financial statements of the City of Commerce Board ofEducation as of and for the year ended June 30, 1994, and have issued our report thereon dated June 19, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the financial statements.

We have applied procedures to test the City of Commerce Board ofEducation's compliance with the following requirements applicable to each of its Federal financial assistance programs, which are listed in the Schedule of Federal Financial Assistance, for the year ended June 30, 1994:

(1) Political Activity

(5) Allowable Costs/Cost Principles

(2) Civil Rights

(6) Audit Follow-Up/Resolution

(3) Cash Management

(7) Administrative Requirements

(4) Federal Financial Reports

Our procedures were limited to the applicable procedures described in the Office of Management and Budget's "Compliance Supplement for Single Audits of State and Local Governments" and other additional procedures as deemed necessary. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Board's compliance with the requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion.

94CRL-40

With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph of this report. With respect to items not tested, nothing came to our attention that caused us to believe that City of Commerce Board of Education had not complied, in all material respects, with those requirements.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
c::t~~
Claude L. Vickers State Auditor
CLV:cm 94CRL-40

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street. S.W., Suite 214 Atlanta, Georgia 30334-8400
June 19, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members of the City of Commerce Board ofEducation

SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS

Ladies and Gentlemen:

We have audited the financial statements ofthe City of Commerce Board of Education as of and for the year ended June 30, 1994, and have issued our report thereon dated June 19, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the financial statements.

In connection with our audit of the fiscal year 1994 financial statements of the City of Commerce Board of Education and with our consideration of the Board's internal control structure used to administer Federal financial assistance programs, as required by Office of Management and Budget (0MB) Circular A-128, "Audits of State and Local Governments", we selected certain transactions applicable to certain nonmajor Federal financial assistance programs for the year ended June 30, 1994. As required by 0MB Circular A-128, we have performed auditing procedures on the selected transactions to test compliance with the requirements governing:

( 1) Types of Services Allowed or Unallowed

(2) Eligibility

Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the City of Commerce Board ofEducation's compliance with these requirements. Accordingly, we do not express such an opinion.

With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph. With respect to items not tested, nothing

94CRL-120

came to our attention that caused us to believe that the City of Commerce Board of Education had not complied, in all material respects, with those requirements.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter ofpublic record.

CLV:cm 94CRL-120

R~
Claude L. Vickers State Auditor

SECTION III INTERNAL CONTROL

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 19, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe City of Commerce Board ofEducation
REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements ofthe City of Commerce Board of Education as of and for the year ended June 30, 1994, and have issued our report thereon dated June 19, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the financial statements.
We conducted our audit in accordance with generally accepted auditing standards, and 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.
In planning and performing our audit ofthe financial statements of the City of Commerce Board ofEducation for the year ended June 30, 1994, we considered the internal control structure 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 structure.
The management ofthe City of Commerce Board of Education is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected.
94ICL-3

Also, projection of any evaluation of the structure to future periods is subject to risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate.

For the purposes of this report, we have classified the significant internal control structure policies and procedures in the following categories:

(1) Cash and Cash Equivalents

(6) Employee Compensation

(2) Inventories

(7) General Ledger

(3) Revenue/Receivables/Receipts

(8) General Fixed Assets

(4) Procurement

(5) Expenditures/Liabilities/ Disbursements

For all ofthe internal control categories listed above, we obtained an understanding of the design ofrelevant policies and procedures and whether they have been placed in operation, and we assessed control risk.

We noted a certain matter involving the internal control structure and its operation that we consider to be a reportable condition under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control structure that, in our judgment, could adversely affect the entity's ability to record, process, summarize, and report financial data consistent with the assertions of management in the financial statements.

As described in the Schedule ofFindings and Improper or Questioned Costs, a reportable condition was noted in the following control category:

General Fixed Assets

A material weakness is a reportable condition in which the design or operation of one or more ofthe specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities 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 structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that the reportable condition disclosed above is also considered to be a material weakness.

This condition was considered in determining the nature, timing, and extent of the procedures to be performed in our audit ofthe City ofCommerce Board ofEducation's financial statements and this report does not affect our report thereon dated June 19, 1995.

94ICL-3

This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:cm 94ICL-3

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 19, 1995

Honorable Zell Miller, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Superintendent and Members of the City of Commerce Board of Education
SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS
Ladies and Gentlemen:
We have audited the financial statements of the City of Commerce Board of Education as of and for the year ended June 30, 1994, and have issued our report thereon dated June 19, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the financial statements.
We conducted our audit in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and the provisions of Office of Management and Budget (0MB) Circular A-128, "Audits of State and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement and about whether the City of Commerce Board of Education complied with laws and regulations, noncompliance with which would be material to a Federal financial assistance program.
In planning and performing our audit for the year ended June 30, 1994, we considered the internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and to report on the internal control structure in accordance with 0MB Circular A-128. This report addresses our consideration of internal control structure policies and procedures relevant to compliance with requirements applicable to Federal financial assistance programs.
The management ofthe City of Commerce Board ofEducation is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs ofintemal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute,
94ICL-13

assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles, and that Federal financial assistance programs are managed in compliance with applicable laws and regulations. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation ofthe structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate.

For the purposes of this report, we have classified the significant internal control structure policies and procedures used in administering Federal financial assistance programs in the following control categories:

GENERAL REQUIREMENTS (1) Political Activity (2) Civil Rights (3) Cash Management (4) Federal Financial Reports

SPECIFIC REQUIREMENTS (1) Types of Services
Allowed or Unallowed
(2) Eligibility
(3) Matching, Level of Effort, and/or Earmarking

(5) Allowable Costs/Cost Principles

(4) Reporting

(6) Audit Follow-Up/Resolution (7) Administrative Requirements

(5) Applicable Special Tests and Provisions
(6) Other Requirement Claims for Advances and Reimbursements

For all of the internal control structure categories listed above, we obtained an understanding of the design ofrelevant policies and procedures and whether they have been placed in operation, and we assessed control risk.

During the year ended June 30, 1994, the City of Commerce Board of Education had no major Federal financial assistance programs and expended 56% of its total Federal financial assistance under the following nonmajor Federal financial assistance programs:

Food and Nutrition Program Food Services National School Lunch Program
Elementary and Secondary Education Act Chapter 1 - Education ofDeprived Children

94ICL-13

We performed tests of controls, as required by 0MB Circular A-128, to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we considered relevant to preventing or detecting material noncompliance with general requirements and specific requirements as described above, that are applicable to the aforementioned nonmajor Federal financial assistance programs. Our procedures were less in scope than would be necessary to render an opinion on these internal control structure policies and procedures. Accordingly, we do not express such an opinion.
Our consideration of the internal control structure policies and procedures used in administering Federal financial assistance would not necessarily disclose all matters in the internal control structure that might constitute material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness is a condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that noncompliance with laws and regulations that would be material to a Federal financial assistance program 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 structure and its operation that we consider to be material weaknesses as defined above.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:cm 94ICL-!3

SECTION IV FINDINGS AND IMPROPER OR QUESTIONED COSTS

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30 1994
PRIOR YEAR
AUDIT FOLLOW-UP/RESOLUTION Failure to Meet Expenditure Requirements Financial Statements Finding Resolved Audit Control Number 7711-93-01
The audit report for the year ended June 30, 1991, stated that the Board had an underexpenditure of Quality Basic Education (QBE) funds of $2.48 for the Staff Development Program. For the year under review, adjustment was made to the Board's local fair share by the Georgia Department of Education to refund the underexpenditure as required.
AUDIT FOLLOW-UP/RESOLUTION Failure to Meet Expenditure Requirements Financial Statements Amount: $197.58 Audit Control Number 7711-93-03
The audit report for the year ended June 30, 1993, stated that the Board had underexpenditures of Quality Basic Education (QBE) funds of$120.31 for the salaries portion ofthe Special Education Program and $77.27 for the operations portion ofthe Remedial Education Program. For the year under review, no adjustment was made to the Board's local fair share by the Georgia Department ofEducation to refund the underexpenditures as required. The total amount of$197.58 should be returned to the Georgia Department of Education through an increase in the Board's local fair share for the QBE programs in a subsequent fiscal year.
AUDIT FOLLOW-UP/RESOLUTION Failure to Meet Expenditure Requirements Financial Statements Amount: $10,668.35 Audit Control Number 7711-93-04
The audit report for the year ended June 30, 1993, stated that the Board had an underexpenditure of Quality Basic Education (QBE) funds ofSI0,668.35 for the Staff Development - Professional Development Stipends Program. For the year under review, no adjustment was made to the Board's local fair share by the Georgia Department ofEducation to refund the underexpenditures as required. These funds should be returned to the Georgia Department of Education through an increase Board's local fair share for the QBE programs in a subsequent fiscal period.

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30 1994
PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 7711-93-02
The audit report for the year ended June 30, 1993, noted that the management of the City of Commerce Board ofEducation had chosen not to maintain a system-wide General Fixed Assets Account Group within the formal
accounting records as required by generally accepted accounting principles. In the year under review, the Board did not establish a General Fixed Assets Account Group within the formal accounting records. 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 of a General Fixed Assets Account Group. The subsidiary records should include an inventory ofland, 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.
CURRENT YEAR
EXPENDITURES/LIABILITIES/DISBURSEMENTS Failure to Meet Expenditure Requirements Financial Statements Nonmaterial Noncompliance Amount: $17,959.00 Audit Control Number 7711-94-01
For the year under review, the Board reported to the Georgia Department ofEducation on DE Form 0420 "General Fund QBE Program Expenditure Summary" expenditures totaling $28,103.27 for the Staff Development - Cost ofInstruction Program. A review ofthe underlying source documentation for the Quality Basic Education (QBE) program disclosed that the Board expended more than 15 percent of its initial
allotment offunds for Professional Development Stipends for StaffDevelopment - Cost oflnstruction Program
purposes resulting in an underexpenditure of$17,959.00 for the minimum required allotment of$17,959.00 for the StaffDevelopment - Professional Development Stipends Program.
This questioned cost resulted from management's reliance on incorrect information received from the Georgia Department ofEducation, resulting in a violation of Official Code of Georgia 20-2-182. These funds should be returned to the Georgia Department ofEducation through an increase in the Board's local fair share for the QBE programs in a subsequent fiscal period.

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30 1994
CURRENT YEAR
GENERAL LEDGER Failure to Transfer Local Matching Funds Financial Statements Material Noncompliance Audit Control Number 7711-94-02
The Board received approval for State capital outlay project funding, through Georgia State Financing and Investment Commission, for the 1994 fiscal year. Both the instructions in Chapter 70 of the Georgia Financial Accounting Handbook for Local School Systems (GFAH} and the agreement signed by the Board to receive this funding require that the Board transfer required local matching funds to the Capital Projects Fund by June 30, 1994, and designate those funds by project name and number. As ofJune 30, 1994, the Board had failed to transfer $8,599.60 of the required amount.
This condition occurred because management was not aware of the provisions of GFAH. A correcting audit adjustment was necessary to transfer $8,599.60 from the General Fund to GSFIC Project No. 95/94S-771-088 as required.
Note: The City ofCommerce Board ofEducation was provided an opportunity to include pertinent comments from the Board's management concerning these audit findings, conclusions and recommendations. The Board has elected not to provide comments for inclusion in this report.