;l~t;~;;;~-~~~~~~~~~8~~~i;~Ii~~~~~~~f.~~~1~~:~t.2~Pf.~~M~T~~fti~~~j}~~ii;~;,.c~;:1-~;tY~_:;--:.:,~:.},
)~t~-~~~-~..~.T:ho,~~~;~:;ft~\~, ~". ~~~:-_;Li~~~};'

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

SECTION I

FINANCIAL

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

EXHIDITS

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

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

6

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

7

ADDmONAL FINANCIAL INFORMATION

COMB~GSTATEMENTS

SPECIAL REVENUE FUND

E

COMB~G BALANCE SHEET

18

F

COMB~G STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

20

CAPITAL PROJECTS FUND

G

COMB~GBALANCESHEET

22

H

COMB~G STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

24

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

26

2 SCHEDULE OF STATE REVENUE

28

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

29

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND -QUALITY BASIC EDUCATION PROGRAMS

4

OVERALL

31

5

BYPROGRAM

32

., I' ' .
CTIY OF COMMERCE BOARD OF EDUCATION- JACKSON COUNTY - TABLE OF CONTENTS -
SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE Wfi1I GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE Wfi1I REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE Wfi1I OMB CIRCULAR A-133
SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION! FINANCIAL

RussELL W. HINTON
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND AcCOU~TS
254 Washington Street. S.W.. Suite 214 Atlanta. Georgia 30334-8400
March 19,2001

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Commerce Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATIONSCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general purpose financial statements of the City of Commerce Board of Education, a component unit of the City of Commerce, Georgia, as of and for the year ended June 30, 2000, as listed in the table of contents. These general purpose financial statements are the responsibility ofthe City ofCommerce Board ofEducation's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in the notes to the general purpose financial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:
* The general purpose financial statements of the Board did not contain a General Fixed
Assets Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles.
2000ARL-13

* School activity accounts maintained at the individual schools are not included in the
general purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general purpose financial statements.
* The Board did not recognize as expenditures, in the year ended June 30, 2000, a portion
of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2000. Also funds received, subsequent to June 30, 2000, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1999, were improperly recorded in the year ended June 30, 2000. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general purpose financial staiements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements referred to above present fairly, in aJI material respects, the financial position of the City of Commerce Board of Education as ofJune 30, 2000, 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 March 19, 200I, on our consideration of the City of Commerce Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Our audit was performed for the purpose of forming an opinion on the general purpose financial statements of the City of Commerce Board of Education taken as a whole. The accompanying combining statements (Exhibits E through H) and the financial schedules (Schedules 1 through 5), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the general purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and in our opinion, except for the effects ofthe matters referred to in the third paragraph, such information is fairly stated, in all material respects, in relation to the general purpose financial statements taken as a whole.
2000ARL-13

A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24.

RWH:gp 2000ARL-13

State Auditor

CTIY OF COMMERCE BOARD OF EDUCATION- JACKSON COUNTY

CITY OF COMMERCE BOARD OF EDUCATION- JACKSON COUNTY COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30 2000

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

GOVERNMENTAL FUND

SPECIAL

GENERAL

REVENUE

FUND

FUND

$

87,539.18

$ 1,034,866.89

383,347.29

29,948.30

11,098.50 3,162.32

Total Assets

$ 1418 214.18 $ 131 748.30

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retainages Payable Capital Lease Agreements
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Bus Replacement Funds For Continuation of Federal Programs For Expired Grant Balances/Questioned Costs For Inventories Food Donated Commodities Purchased Food For Purpose of Bond Issue For SPLOST Projects For State Capital Outlay Projects Unreserved Designated for Performing Arts Center Undesignated
Total Fund Equity

-.
$ ...-21,495.69 311.20 $

12,023.64 48,646.00
2,128.60

$

21,806.89 $ _ _c6!!!2;.;9!,;!9~8.:;24~

$

15,396.51

201.64

$

11,098.50

3,162.32

34,698.32 1,346.110.82

54 489.24

$ 1,396,407.29 $ ---"68,.,_75.,o"'.o,s,__

Total Liabilities and Fund Equity

$ 1 418 214.18 s_...:,;13;:,:1..:,7.::,48~:ll3ol..

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

EXHIBIT"A"

TYPES CAPITAL
PROJECTS FUND
$ 1,805,346.79
578,766.21
252,042.74

ACCOUNT

LONG-TERM DEBT

TOTALS

(Memorandum OnM

JUNE 30. 2000

JUNE 30, 1999

$ 1,892,885.97 $ 2,049,638.52

1,613:633.10

1,200,355.07

665,338.33

656,695.73

- - - - - $ --"'39"'9'-'1"'5."'11:..,.

11,098.50 3,162.32
39 915.11

10,666.58 3,308.58
108 540.78

$ 2,636,155.74 $

39 915.11 $ 4,226,033.33 $ 4,029,205.26

$

241,186.49

136,204.25

$

$

377 390.74 $

$
39915.11 39915.11 $

21,495.69 12,334.84 $ 48,846.00 2,128.60 241,186.49 136,204.25 39915.11
502110.98' $

s1.n2.66 42,176.10 42,742.74
26,380.00 108 540.78
311 612.28

$ 1,148,152.43 1,037,840.97 72,771.60
0.00
$ 2.258,765.00

$

15,396.51 $

8,440.74

15,036.41

201.84

13,504.07

11,098.50 3,162.32
1,148,152.43 1,037,840.97
72,771.60

10,666.58 3,308.58
1,846,053.27 803,141.71 103,117.60

34,698.32 1 ,400,600.06

1,114,324.02

$ 3,723,922.35 $ 3,717,592.98

$ 2.636,155.74 $

39915.11 $ 4,226,033.33 $ 4,029,205.26 -3-

CITY OF-COMMERCE BOARD OF EDUCATION JACKSON COUNTY COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30. 2000

,.

REVENUES



State Funds Federal Funds Taxes Other Funds

...
... '4 J ...

Total Revenues

EXPE;NDII!.!R!;S

'
:.t

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 Services Operations

Capital Outlay

...

Debt Service

Principal

Interest

-~

Total Expenditures

Excess of Revenues over (under) Expenditures

OTHER FINANCING SOURCES <!.!SESl

Capital Leases Operating Transfers In Operating Transfers Out.

\ 4

i

: t'

Total Other Financing Sources (Uses)

Excess of Revenues and Other Financing Sources over (under) Expenditures and Oth~r Financing Uses_

FUND BALANCE JULY 1

,.

Food Inventory - Net Change in Period

Donated Commodities Purchased Food

_ ..

~ -. .
GENERAL .!.FUND

SPECIAL REVENUE ,. FUND

c

$ 5,076,74t.39 $

t43,742.54

1

"' 516,912.88

1,559,875.00

280,989.'38

158,528.25

$ 6,917,605.77 $

819183.67

$ 4,255,960.15 $
313,991.18 155,189.93 205,887.61 281,337.57 438,944.36
88,202.13 557,768.12 105,935.11 110.439.68

11,305.40 25,045.45

19,399.10

2 510.13

. . . ~

(' '

$ .. 6,571,915.92 $

$-- 345,689.'85 $

384,642.21 17,226.36
. 20,631.69 9,626.50
7,901.83 10,758.38 413,995.26
500.00
865,282.23 -46 098.56

$

$

-6 485.74

$

-6 485.74 $

$

339,204.11 $

1,057,203.18
...~.

6.485.74
6 485.74
-39,612.82 108,077.22
431.92 -146.26

FUND BALANCE JUNE 30

$

1,396,407.29 $ _ _,.:68~7,.=5:;:;0-~06~

.. ' ,

I .

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

EXHIBIT"B"

CAPITAL PROJECTS
FUND

TOTALS

{Memorandum Onl~l

YEAR ENDED

JUNE 30, 2000

JUNE 30, 1999

$

979,078.00 $ 6,199,561.93 $ 5,061,513.13

516,912.88

619,126.23

881,942.48

2,441,817.48

2,295,211.58

138,629.93

578147.56

507,292.70

$ 1,999,650.41 $ 9,736,439.85 $ 8,483,143.64

$ 4,640,602.36 $ 4,455,306.44

$ 1,573,866.70

331,217.54 175,821.62 205,887.61 290,964.07 438,944.36 88,202.13 557,768.12 113,836.94 121,198.06
413,995.26 11,805.40
1,598,912.15

332,118.93 273,169.48 197,822.53 215,927.67 429,217.55
92,840.69 545,730.72 98,659.77 116,698.19
7,000.00 404,496.79
1,246.06 1,317,155.01

49,226.57 1 068.17

68,625.67 3 578.30

52,218.58 9 186.71

$ 1 624 161.44 $ 9,061,359.59 $ 8,548,795.12

$

375 488.97 $

675,080.26 $

-65 651.48

$

25,086.00

$

5,396.39 $

11,882.13

16,653.31

-674 432.94

-680,918.68

-662,218.82

$ -669,036.55 $ -669,036.55 $ -620 479.51

$ -293,547.58 $

6,043.71 $ -686,130.99

2,552,312.58

3,717,592.98

4,401,684.08

431.92 -146.26

1,964.77 95.12

$ 2,258,765.00 $ 3,723,922.35 $ 3?17,592.98

- 5-

CITY OF COMMERCE BOARD OF EDUCATION- JACKSON COUNTY COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL- !NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30 2000

EXHIBIT "C"

GEiNERAL FUND'

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES
State Funds Federal Funds Taxes Other Funds

t t ..-..

s $ 4,739,622.66_ 5,076,741.39
''

1;559,665.00 1,559,6i5:oo

132,922.00

260,989.38 .

Total Revenues

$ 6,432,609.68 $ 6,917,605.77

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 Community Services Operations
Capital Outlay Debt Service

~,

r ..

$ 4,167,844.12 $ 4,255,960.15.

' 291,702.12 152.475.02 206,963.24 275,666.95 446,92325
',110,531.01 r 597,824.29
r 108,738.95
- 113,9,14.01
; ... ~ ' t..
12,500.00

313,991.18 155,189.93 205.887.61
281,33~.57
438,944.36 88,202.13,' 557,768.1~.. ' 105,935.11 110,439.68 :
11,305.40 25,045.45, 21,909.23

Total Expenditures Excess of Revenues over (under) Expenditures

$ 6.505.082.96l $ 6.571.915.92 l-:

s s -72A73.28

345,689.85 .

OTHER FINANCING SOURCES !USES!
Other Sources Other Uses
Total Other Financing Sources (Uses)

' .

'

. ~-

$

-6'485.74 '

$ _ _,-6:.;:4,8"'5..:..:74,_

Excess of Revenues and Other Financing Sources over (under} EXpenditures and Other Financing Uses
FUND BALANCE JVLY 1, 1999

S -72.473.28 $ 339,204.11

"687,943..01

1,057,2o3:1e r..

Adjustments Food Inventory - Net Change in Period
Donated Commodities Purchased Food

FUND BALANCE JUNE 30 2000

f 'f -
$ 615,469.73 $ 1.396,407.29

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

-6-

SPECIAL REVENUE FUND



ACTUAL

(BUDGET

BUDGET

BASIS!

$ 94,553.10 $ 143,742.54 442,870.00 516,912.68

; 150,687.00

158,528.25

$ 688,110.10 $ 619,183.67

$ 368,561.50 $ 384,642.21

16,875.00 20.475.00

17,226.36 20,631.69

17,506.00

9,626.50

4,869.60 6,700.00 7,000.00 361,741.00 1,000.00

7,901.83 10,758.38
413,995.26 500.00

s .$ 824,726.10 865,282.23 s -136,618.00 $ -46,098.56

s 6,485.74
$ 6,485.74

s s -136,618.oo

-39,612.62

' s1.1io1.7o 108,077.22

-45,802.14

431.92 -146.26

s $ -131 418.44

68,750.06

...

CITY OF COMMERCE BOARD OF EDUCATION- JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 2000

EXHffiiT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The City of Commerce Board of Education (Board) was established under the Jaws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is not organized as a separate legal entity and does not have the power to levy taxes or issue bonds. Its budget is subject to approval by the City of Commerce, Georgia. Accordingly, the City of Commerce Board ofEducation is determined to be a component unit of the City of Commerce, Georgia, which is the primary government.
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 fmancial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements.
The general purpose financial statements account for all State, Federal, Taxes 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 ofa Board's educational activities. Goverrimental 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.

-7-

CITY OF COMMERCE BOARD OF EDUCATION -JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 2000

EXHIBIT .. D"

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POL:ICIES

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 received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational.objectives.

CAPITAL PROJECTS FUND -the fund used to account for financial res'purces to be used for the

. acquisition or construction of major capital facilities.

t >- -

ACCOUNT GROUP

J ''

"
~- ~

GENERAL LONG-TERM DEBT ACCOUNT GROUP- A financial reporting device used to

account for material capital lease obligations.

. .

' BASIS OF ACCOUNTING.

.I. '

r

' 'I

1'



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 liabilitie$, generally are

included on the balance sheet. Operating statements ofthese funds present increases (i.e., revenues

and other financing sources) and decreases (i.e., expenditures and other financing uses) ip. net current

-assets.' Their reported fund balance is considereda measure of available spendable resources.

. , ' . ' .

' '.

Liabilities which are .expected to be fi_nanced 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.

' c

'11 .

. .,

Governmental funds are accounted for using the.modified accrual basis of ac~ounting under which:

'. ' ,f

-' L -

r

Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and

available). "Measurable" means the amount of the transaction can be determined and "available"

means collectible within the current period or.soon enough thereafter to be used to pay liabilities of

the current period. Those revenues considered susceptible to accrual are property taxc;s, local option

sales taxes, intergovernmental grants and investment income.

Expenditures are generally recognized when the related fund liability is incurred._
'. ,,
A departure from the above defmitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for-the State's share of these contracts. Du!}11g fiscal _year 2000, a substantial number of personnel of the. Board were employed for a on~ hundred and J;!inety day period beginning in late August 1999 and ending in early June 2000. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1999 and ending in Aughst 2000. 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

-8-

,,
CITY OF COMMERCE BOARD OF EDUCATION- JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 2000

EXHffiiT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
months. As ofJune 30,2000, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 2000, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 2000. Also, the State's portion ofthe compensation paid in July and August 2000 was received and recorded as revenue in the fiscal year subsequent to June 30, 2000. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1999, were recorded in the year ended June 30, 2000. 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 of Commerce Board of Education'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 ofthe budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
The budget process begins when the 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 of general 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 adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the Board to deposit its funds in one or more solvent banks, insured Federal savirigs and loan associations, or insured State chartered building and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Board in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost.. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated
-9-

,..

CITY OF COMMERCE-BOARD OF EDUCATION. JACKSON COUNTY EXHffiiT"D"

. NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES .

Section 36-83-4 authorizes the Board to invest its furids. In selecting aniong options for investment or among institutional bids for:deposits;the highest rate of return shall be the objective, given
equ.ivalent conditions of safety and liquidity. Funds may be inves. ted in the following:

. "

. (I) Obligations issued by the State of Georgia or by-other states, .

' r. .

: ., ~

(2) Obligations issued by the United States government, .

(3) Obligations fully insured or guaranteed by the United States government or a.United States government agency,

..

(4) Obligations of any corporation of the United States government,

(5) Prime banker's acceptances,

: '~

'., ,.

i ...

. J' .

j

'(6) The Local Government InvestnieritPool administered by the State of Georgia, Office of

Treasury and Fiscal Services,

. :! : . .. . :. .

(7) Repurchase agreements, and
' .

(8)' .Obligations ofotherpolhical subdivisions of the State of Georgia.. .. <

r ,.

.... l

'. RECEIVABLES .:. ;,

,. . .' ' .. .

. '

.

.

' ' ::.;

Receivables consistofgrant 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 Commerce fixed the property tax levy for the 1999 tax year (calendar year) on

December 1; 1999 (levy date). Taxes were due on February 20,.2000. The lien 'date'for property

taxes was January 1, 1999. Taxes collected within the current fiscal year or within 60 days after

year-end are reported as revenue in fiscal year 2000. The City of Commerce City Clerk bills and

collects the property taxes for the Board of Education and remits taxes collected to the Board.

.The tax millage rate levied for the 1999 tax year (calendar:year) for the City.ofCommerce Board of

., Education was as follows (a mill equals $1 per thousand dollars of assessed value):

- J

S ~I I I

. SchooJOperations

~mills

''

..

j

.. I

- v . . 10.

CITY OF COMMERCE BOARD OF EDUCATION- JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 2000

EXHIBIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 $881,942.48 and was recorded in the Capital Projects Fund. The State will terminate collection of this tax once an additional $1,554,189.50 has been collected or on June 30, 2002, whichever occurs first.
The City of Commerce (city government) sold general obligation bonds to provide advance funding for Capital Outlay Projects associated with issuance of a Special Purpose Local Option Sales Tax (SPLOST). The Board transferred $674,432.64 to the City of Commerce for payment of principal and interest due on these bonds during the year.
INVENTORIES
FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time of purchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.
INTERFUND TRANSACTIONS
The Board has the following types of interfund transactions:
Reimbursements ofexpenditures initially made from a fund that are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
Operating transfers are recorded for all interfund transactions other than reimbursements.
MEMORANDUM ONLY- TOTAL COLUMNS
Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not presentfinancial position or results of operations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.

- 11 -

"

CITY OF COMMERCE BOARD'OF EDUCATION'-'JACKSON COUNTY EXHIBIT"D"

NOTES TO THE GENERAL PURPOSE FINANCIALSTATEMENTS

JUNE 30. 2000

Note 2: DEPOSITS AND INVESTMENTS ' - '

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 asum ofmoney which has not

' . _been secured by surety bond, by guarantee of insurance, or by collateraL The aggregate of the face

value of such surety bond and the market yalue of securities.pledged .shall be equal to not less than

II 0 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance.

If a depository elects the pooled method (OCGA 45-8-13.1) the aggregate of the market value ofthe

securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8~Il(b)'provides an officer holding public funds may, in his discretion, waive the requirement-for securityin the case ofoperating funds placed in-demand deposit checking

1~ -. accounts ... r

:. :

1. . : ,. :

: -~ ' " l ''.'

'I

. j

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, '.

:.: : -- -,
' ~ ..

J (2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,

. ' ''/:,

1 ' ~. ; '

.I

'

- ()

(3) Bonds, bills, notes,.certificates of indebtedness or.other directobligations of the United

States orofthe.State of Georgia,

. ;. ~ ./



. l

;

l.

H'

'. 1" o

;, ,- }

~

1

(4) Bonds;- bills, notes, certificates of indebtedness or other 'obligations of the: counties or

municipalities of the State of Georgia, J, _ :

(5) Bonds of any public authority created by the laws of the State of Georgia; providing that

the statute that created the authority authorized the use of the bonds for this purpose,
....

.(6) Industrial revenue bonds and bonds of development authorities created by the laws of the

. State_ofGeorgia,and: -~- -.. 1

_:,

. : ;-_:: :: ' ':.

' '-

- ... .... t.

,,

'

-r : :--.

~. I o

(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 goverilment both as to principal and interest or debt obligations issued by the Federal

Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the

Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage

I ! "- I.

Association, and the Federal National Mortgage Association.
,,

..';I, _.,

CATEGORIZATION OF DEPOSITS

,(__ 1 '

'

. At June 30, 2000, the bank balances were $2,422,496.20. The amounts ofthe total bank balances are

classified into three categories of credit risk:

.' )_ - ,

'.

Category I - 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.

- 12-

CITY OF COMMERCE BOARD OF EDUCATION- JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 2000

EXHIBIT"D"

Note 2: DEPOSITS AND INVESTMENTS

Cate~ory 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, 2000, as follows:

Risk Category
I 2 3
Total

Bank Balance
$ 231,901.14 2,190,595.06 0.00
$ 2.422.496,20

CATEGORIZATION OF INVESTMENTS At June 30, 2000, the carrying value of the Board's total investments was $1,613,633.10. The investments are classified as to risk categories as follows:

Type of Investment
Local Government Investment Pools
Money Market Mutual Funds
Total Investments

Carrying Amount

Fair Value

$ 1,034,866.89 $ 1,034,866.89 578.766.21 578,766.21
$ 1.613 633,10 $ 1 613.633.10

The carrying amounts shown above includes amounts maintained in an investment pool by the State of Georgia, Office of Treasury and Fiscal Services in which the Board owns no identifiable securities. The investment policy ofthe State ofGeorgia, Office ofTreasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description ofthe Primary Liquidity Portfolio is as follows:

The Primary Liquidity Portfolio consists of Georgia Fund 1, which is a combination local and state government investment pool, and Fund 6. Georgia Fund 1 is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. The pool is not registered with the Securities and Exchange Commission as an investment company but does operate Georgia Fund 1 in a manner consistent with Rule 2a-7 of the Investment Company Act of 1940 and is considered to be a 2a-7 like pool. The pool's primary objectives are safety ofcapital, investment income, liquidity and diversification while maintaining principal ($1 .00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and values participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value of the shares.

- 13-

CITY OF COMMERCE BOARD OF EDUCATION'c JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 2000

EXHIBIT"D"

Note 2: DEPOSITS AND INVESTMENTS ' I

. '

Participation in the pool is voluntary and deposits consist of funds froiT.I lqca) governments;

operating and trust funds ofGeorgia's state agencies, colleges and universities; and current operating

funds of the State of Georgia's General Fund.

. .

. ~ )

. '

' I f,.J

Investments in Georgia Fund 1 and Fund 6 are directed toward short-term instruments such as U. S.

Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S.

Government. or any of.its agencies or instrumentalities, banker's acceptances and repurchase

agreements. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The

.. weighted average maturity for Georgia Fund 1 on June 30, 2000, was :23 days: The average

, inves!JT!ent duration for Fund 6 on June 30, 2000, was .80 year.

. j. . ,,
Note 3: NON-MONETARY TRANSACTIONS

( ~

' -.

The Board receives food commodities from the United States Department ofAgnculture (USDA) for

school breakfast and lunch programs. These commodities are recorded at their Federally assigned

value. See Note 1 -Inventories .

l

o

I





' ,-



'

Note 4: RISK MANAGEMENT

'.l.i ,,

.;

r , 1

The Board is exposed to various risks ofloss related to torts; theft of, damage to, and destruction of

. assets; errors or omissions; job related illness or injuries to employees; natural disaster and

. unemplo~ent compensatiqn.

'

.

' '

'



I

'

,





The Board has obtained coinmercial insurance for risk ofloss associated with torts, assets, errors or

omissions and job -related illness or injuries to employees. ,l).e 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 has elected to self-insure (or alllosses"related to natural disaster.. The Board has not

experienced any losses' related to this risk in the past three years.

'

.

'

,.

The Board is self-insured with regard to unemployment compensation claims. The Boars! accounts

for claims within the General Fund with expenditure and liability being reported when it is probable

that a Joss has occurred, arid the amount ofthat Joss can be reasonably estiJ11ated. The Board has not

incurred any liabilities for unemployment compensation during the past two fiscal years.

..
J

I'

. ' 1 .,

L .

I

,.

.. . The Board has purchased surety bonds to provide additional in~1,1~ance .~?o.verage l!S.follows:

~'

'I

'1. '

'.

Position Covered

Amount

Superintendent ..

All Other Employees

,

.J,,,

, l

,. -

'.'i $. 100,000.00 .. $ 10,000.00

- 14-

CITY OF COMMERCE BOARD OF EDUCATION- JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000

EXHIBIT"D"

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The City of Commerce Board of Education has entered into various lease agreements as Jessee for buses, bleachers and 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.

GENERAL OBLIGATION DEBT OUTSTANDING The changes in General Long-Term Debt during the fiscal year ended Jvne 30, 2000, were as follows:

Balance July 1, 1999
Deductions Payments
Balance June 30, 2000

Capital Leases $ 108,540.78
68,625.67 $ 39.915.11

At June 30, 2000, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30
2001 2002
Total Principal and Interest
Deduct: Imputed Interest
Net Present Value of Future Minimum Lease Payments

Capital Leases $ 21,909.23 20,459.23 $ 42,368.46
2,453.35
$ 39.915.11

Note 6: ON-BEHALF PAYMENTS

The Board has recognized revenues and expenditures in the amount of $95,896.29 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies.

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of$70,281.59

- 15-

CITY'OF COMMERCE BOARD OF EDUCATION- JACKSON COUNTY NOTESTO THE GENERAL PURPOSE FINANCIAL STATEMENTS . _ JUNE 30. 2000

EXHffiiT"D"

Note 6: ON-BEHALF PAYMENTS

. '

Paid to the Teachers Retirement System of Georgia

For Teachers Retirement System (TRS)Employer's Cost

.. )

In the'amotihtof$9,71?.70 ':.v.



..,.',

.- <\. i

J ... '

.~'

Office of Treasury and Fiscal Services

.

. Paid to the PublicSchool Employees Retirement System

For Public School Employees Retirement Intheamiltintof$15,896.00..

(PSERS)

Employer's Cost' .- ..

'

~

'

Note 7: SIGNIFICANT COMMITMENTS

The following is an analysis ofsignificant outstanding construction or renovation contracts executed

.by the Board as of June 30, 2000, together with funding available: . .. .
:,;.

~-t:! ;i

Unearned

Funding

Executed

Available

Project I "".! (

00/99S-771-111

.r

:, 006/99SC771-060

.Contracts

'
'

..,, ' ' '

$ 975,444.77

j _:1

300._75

From State
' '

01/00S-771-049

18,000.00 $ 140,687.00

Middle School Renovations ..,

,,. 4 46i.ll

..,...

,,
...

$ 228,2Q6.6j > $ r. i ~Q;Gs:Z.QQ

.. -- '

The

a'.m'o.unts

.
described

in

this

note

are

not

reflected

in

the

general

purpose

fmancial

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 teims. The Board believes that such

disallowances, if any, will be immaterial to its overall financial position.

Note 9: RETIREMENT PLANS

. ' -,

.-.-...- .

. .T.EACHERS

RETIREMENT SYSTEM

OF GEORGIA (TRS)
I -I

.

TRS PLAN DESCRIPTION Substantially all teachers, administrative and cl~rical personnel employed by local"school systems are covered by the Teachers Reti'rement System of Georgia (TRS), wliich is a cost-sharing multiple employer defined benefit pension plan. TRS provides se!Vice retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement

i -- 16-

'.

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 2000

EXHIDIT"D"

Note 9: RETIREMENT PLANS

System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Board who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.29% and employer contributions . for the current fisca} year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2000 1999 1998

100% 100% 100%

$ 486,983.08 $ 488,735.57 $ 445,316.54

- 17-

CIIY OF COMMERCE BOARD OF EDUCATION 3JACKSON COUNIY COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30. 2000

j

''

. . . . .} (

.
'

ASSETS

Cash and Cash Equivalents

Accounts Receivable.
~, ':. Inventories
Food
Donated Commodities Purchased Food

Total Assets

:.
:.-:. ..... ,, .
'' ~ .
- ..c ,,.
. ''

- . '
SCHOOL FOOD.
SERVICES 'FUND

,,
LOTTERY PROGRAMS

... $ ~ '' 79,926.84' $ I J' .
. '
11,098.50 ' : 3 162.32
- :

3,810.27
5,355.95
'' '
. ro;
,_

$

94 187.66 $

9166.22

LIABILITIES AND FUND EQUIIY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable EXpired Grant Balances Payable
Total Liabilities
FUND EQUIIY
Fund Balances Reserved For Continuation of Federal Programs For Expired Grant Balances/Questioned Costs For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund Equity
Total Liabilities and Fund Equity
See notes to the general purpose financial statements.
~ 1 18

$

4,018.38 $

21,419.22

1,826.00 6,480.94
859.28

$

25 437.60 $ -----"9...!1~66~.2~2'-

$

11,098.50

3,162.32

54 489.24 $ ------"0~.0~0!...

$

68 750.06 $ _ _ _---"0~.0~0!,.

$

94 187.66 $ ===9.:,16~6~.2;,:2;..

EXHIBIT "E"

FEDERAL
PROGRAMS

TOTALS

JUNE 30, 2000

JUNE 30, 1999

$

3,802.07 $

87,539.18 $

105,835.36

24,592.35

29,948.30

94,314.72

11,098.50 3 162.32

10,666.58 3 308.58

$

28,394.42 $

131 748.30 $====2=14:.1,;.;2;;;;5;;,.24,;,.

$

8,846.60

$

6,179.26 $.

12,023.64

13,776.27

20,945.84

48,846.00

42,176.10

1 269.32

2 128.60

41 249.05.

$

28 394.42 $

62 998.24 $

106,048.02

$

15,036.41

13,302.43

$

11,098.50

3,162.32

10,666.58 3,308.58

$

0.00

54 489.24

65 763.22

$

0.00 $

68 750.06 $

108 077.22

$

28 394.42 $

131 748.30 $===2=1=4;,;,1;:;25,;;;.2:;.4;..

- 19-

CITY OF COMMERCE BOARD OF EDUCATION- JACKSON COUNTY .COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30. 2000

- ~-

"

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

REVENUES

':

State Funds Fedeial Funds Other Funds
Total Revenues

'$''
--' ,. $

31,932.00 . $ 212,261.03 158,528.25
402,721.28 $

108,238.62 108,238.62

EXPENDITURES

Current Instruction

'' .' ~ '

Support Services

Pupil Services

Improvement of Instructional Services

General Administration

School Administration

Student Transportation Services

Central Support Services

Other Support Services

Food Services Operation

c

Community Services Operations

Total Expenditures

Excess of Revenues over (under) Expenditures

'' ,- ~

$

117,592,54

847.00

.. $'.

('

;

. --
$

$

413,995.26

413 995.26 $ - --1fa 439.54

-.

.

-11,273.98 $

- --~10,200.92

OTHER FINANCING SOURCES

Operating Transfers In

--,, ;' '

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

$

-11,273.98 $

3 489.72 -6,711.20

FUND BALANCE JULY 1

. '

Food Inventory - Net Change in Period Donated Commodities Purchased Food

.I .. '

79,738.38
431.92 -146.26

6,711.20

FUND BALANCE JUNE 30
; 1.:

$

68 750.06 $

0.00

See notes to the general purpose financial statements. -20-

EXHIBIT"F"

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 30. 2000

JUNE 30, 1999

$

3,571.92 $

143,742.54 $

112,187.12

304,651.85

516,912.88

619,126.23

158,528.25

152,091.30

$

308,223.77 $

819 183.67 $

883,404.65

$

267,049.67 $

384,642.21 $

382,552.57

17,226.36 20,631.69
9,626.50
7,054.83 10,758.38
500.00

17,226.36 20,631.69
9,626.50
7,901.83 10,758.38
413,995.26 500.00

35,501.22 23,848.42 10,401.93
40.00 6,509.10 11,354.45 7,000.00 . 404,496.79 1 246.06

$

332 847.43 $

865,282.23 $

882,950.54

$

-24,623.66 $

-46,098.56 $

454.11

2 996.02

6 485.74

$

-21,627.64 $

-39,612.82 $

21,627.64

108,077.22

431.92 -146.26

8,539.09
8,993.20 97,024.13
1,964.77 95.12

$

0.00 $

68 750.06 $ =..,.;1,;;;08:;,,0~7=7;;;.2:.,.2

-21-

CITY OF COMMERCE BOARD OF'EDUCATION- JACKSON COUNTY COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30. 2000

ASSETS Cash and Cash Equivalents Investments Accounts Receivable

,.

GEORGIA STATE

FINANCING AND

BOND

. INVESTMENT

PROCEEDS

. 'COMMISSION

$ 1,157,308.91 $

325,874.54

" -

.5,843.52

97 907.80

Total Assets

$ 1 163 152.43 $

.. LIABILITIES AND FUND EQUITY
LIABILITIES

~.' -:.

.

"

. .. ' (, __

. '

Cash Overdraft Contracts Payable Retainages Payable

' c
"

.

Total Liabilities

' ; $
.$ " "~

$
15 000.00
15 000.00 $

FUND EQUITY

Fund Balances Reserved For Purposes of Bond Issue For SPLOST Projects For State Capital OuUay Projects Unreserved Undesignated
Total Fund Equity

:1 ~
$ 1,148,152.43

--., ---
. j....

$
-..
0.00

.' . <, $-' 1,148,152.43; $

', 'j:'

-. ::-

Total Liabilities and Fund Equity

-. --

$ 1 163 152.43 $
-- ..

423,782.34
241,186.49 109,824.25 351 010.74
12,n1.6o 0.00
72 771.60 423 782.34

See notes to the general purpose financial statements. . -22-

EXHIBIT "G"

SPECIAL PURPOSE LOCAL OPTION
SALES TAX

$

315,570.94 $

578,766.21

143,503.82

LOTTERY PROJECT

TOTALS

JUNE 30, 2000

JUNE 30 1999

6,592.40 $ 1,805,346.79 $ 1,764,170.87

578,766.21

651,483.47

4 787.60

252,042.74

201,621.00

$ 1 037 840.97 $

11 380.00 $ 2,636,155.74 $ 2,617,275.34

$ $ _ _.,!1..!.1~3~80~.0~0'--

$

11 380.00 $

$ 241,186.49 136,204.25

38,582.76 26,380.00

377 390.74 $ _ __,64"""9""62,..:.,:76'"-

$ 1,037,840.97.
0.00 $ $ 1 037 840.97 $

$
0.00 0.00 $

1,148,152.43 $ 1 ,037,840.97
72,771.60
0.00
2,258,765.00 $

1 ,646,053.27 803,141.71 103,117,60
0.00
2,552,312.58

$ 1 037 840.97 $

11 380.00 $ 2 636 155.74 $ 2,617.275.34

-23-

CITY OF COMMERCE BOARD OF EDUCATION- JACKSON COUNTY COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30 2000

REVENUES
State Funds Taxes Other Funds

~ ---.

"t

--

. . 'J ' :_,, i

,,
" ,

Total Revenues

. ~ .
., ' '

EXPENDITURES

Capital Outlay

Supplies

Land and Land Improvements

Building and Building Improvements

Equipment

Debt Service

Principal

Interest

' ..

--

' ' -"

Total Expenditures

Excess of Revenues over (under) Expenditures

OTHER FINANCING SOURCES (USES!

Operating Transfers In

Operating Transfers OUt,;

r

'}

Total Other Financing Sources (Uses)

Excess of Revenues and Other Financing Sources_

-- over (under) Expenditures and Other Financ.,in' g Uses

--

' --

FUND BALANCE JULY 1

FUND BALANCE JUNE 30

~- - .. -

. BOND J'' PROCEEDS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

. S'F.

.$ ; l 979,078.00

.. $

102,239.01 .

9 201.50

$

102,239.01 $

988,279.50

$

11,359.51

1,000.00

9,649.66 $

1 ,529,513.26

. -. $ $

22 009.17 $
-
80,229.84 $

49,226.57 1 068.17
1 ,579,808.00
-591 ,528.50

$
$
$ ... 1.'

5,396.09 $
-583,526.77
-578,130.68 $
' -497,900.64 $
1,646,053.27

561,182.50 561 182.50 -30,346.00 103117.60

$

" , ' '
1 148 152.43 $

? I f2 771.60

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

EXHIBIT"H"

SPECIAL PURPOSE LOCAL OPTION SALES TAX

LOTTERY PROJECT

TOTALS YEAR ENDED JUNE 30, 2000 JUNE 30, 1999

$

$

881,942.48

27 189.42

$

909,131.90 $

0.00 $ 0.00 $

979,078.00 $ 881,942.48 138,629.93
1 999 650.41 $

47,876.00 833,357.42 161,995.26
1,043,228.68

$

11,359.51

1,000.00

$

0.00 $

22,344.27

1,561,507.19 $ 1,261,701.82

30,453.19

49,226.57 1 068.17

40,253.01 6.493.05

$

0.00 $

22,344.27 $ 1 624 161.44 $ 1,338,901.07

$

909,131.90 $

-22 344.27 $

375 488.97 $ -295,672.39

$ $ -674 432.64
$ -674 432.64 $

$

234,699.26 $

803 141.71

22,344.27 $

588,922.86 $

915,856.57

-1 257 959.41

-1,553,307.86

22,344.27 $ -669,036.55 $ -637.451.29

0.00 $ 0.00

-293,547.58 $ 2,552,312.58

-933,123.68 3,485,436.26

$. 1 037 840.97 $=====0=.0=0= $ 2,258,765.00 $ 2,552,312.58

-25-

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

Agriculture, U. S. Department of

Child Nutrition Cluster

-- -

Pass~Through From Georgia Department of Education

Food and Nutrition Program

Food Services

School Breakfas1 Program

... National School Lunch ~~ram

Total Child Nutrition Cluster_

Other Programs

,,

Pass-Through From Georgia Department of Education

Food and Nutrition Program

Food Distribution Program (1)

Pass-Through From Office of School Readiness

Food and Nutrition Program

Child and Adult care Food Program

Total U. S. Department Ot Agria.llture

Education, U. S. Department of

Special Education Cluster

Pass-Through From Georgia_ Department of EdL!calion

Individuals with Disabilities Education Act

Part B- Special Edu_cation~ _ "t. Flow Through

Presdlool

.. .,

Capacity Building Improvement Graiit

Total Special EdUcatiOI.l Cluster_ _("

Other Programs

Pass-Through From Georgia Department of Education

Elementary and Secondary Education Ad

Title I

"

Grants to Local Eduta:tional Agencies

'

Title II

Eisenhower Professional Development

TitleVI

1

Innovative Education Program Strategies

Class Size Reduction

Goals2000

. - ,.~.

State and Local Ei:tUCatiOrl syStemic

Improvement ~rants.

Technology Uteracy,Challeilge Fund Grants

Safe and Drug-Free Schools and Communities

Vocational Education - Basic Grants to States

High School Program

Basic Grant

,,

Pass-Through From Georgia Department of

Human Resources

Substance Abuse Block Grant

Total U. S. Department of Education

CFDA NUMBER
10.553 10.555
10.550 10.558
.. 64.027 64.173 . 64:027
64.010 64.281 64.298 64.340 64.276 84.318 64.186 64.048 64.186

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL

REVENUE -EXPENDITURES

IN PERIOD

IN PERIOD

'.~-

NIA $ 39,910.11

N/A

146,878.01 $

$ 186,788.12 $

-' '

NIA

19,737.27

NIA

5,735.64

$ 212.261.03 $

(2) 394,257.99 (3) 394,257.99
19,737.27
!2! 413,995.26

NIA r .N/A.
NIA

$ 101.273:23 $ 15.650.38 9,396.97 --

$ 126.320.58 $

io7:951.o8 (3) 15,700.38 (3)
--- 9,300.97
- __1_3~.048.43

"
NIA
NIA
NIA NIA
NIA NIA NIA

114,895.00
18,200.00
5,773.00 18,586.00 < -1.672.33
4,503.00

115.869.51 (3) 19,773.36 (3) 5.783.71 (3) 18,588.80 (3)
13,472.40 (3) 4,517.08 (3)

NIA

- 8.046..60

11.786.12 (3)
~

NIA

10,000.00

$ 304,.651.85 $

10.008.02 (3) 332,647.43

Total Federal Financial Assistance
= N/A Not Available

-26-

$ 516.912.88 $

746.642.69

CITY OF COMMERCE BOARD OF EDUCATION JACKSON COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30. 2000

SCHEDULE "1"

Notes to the Schedule of Exoenditures 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 Child and Adult Care Food Program and the School Breakfast Program were not maintained separately and are included in the 2000 National School Lunch Program.
(3) Expenditures for this program include State. and/or Other Funds. Expenditures are not maintained by fund source.
Major Programs are identified by an asterisk () in front of the CFOA number.
The Board did not provide Federal AssJstance to any Subreciplent.
The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the City of Commerce Board of Education and is presented on the modified acaual basls of acoounting which is the basis of accounting used in the presentation of the general purpose financial statements.

See notes to the general purpose financial statements.

-27.

'I .

,.

\' CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 2000

SCHEDULE "2"

, '
AGENCY/FUNDING

GOVERNMENTAL FUND TYPES

. ,' -' '

_ SPECIAL

CAPITAL

~ _. :" . GENERAl

REVENUE cPROJECTS

:. FUND

FUND

FUND

,. L

r
TOTAL

GRANTS Education. Georgia Department of

..

:o'

'

Quality Basic Education
General and Career Education Programs Special Education Programs
. Remedial Education Program
Media Center Programs ' Staff Developm~nt Programs .

:
$ 2,657,314.00
... .741;172.00 .. ..... ~
76,532.00
113,647.00 31,895.00

L

I ;,

$ 2,657,314.00

741,172.00

76,532.00

.. . 4 -

113,647.00 '. 31,895.00

Indirect Cost

729,547.00

729,547.00

Pupil Transportation

Regular

69,864.00

69,864.00

Bus Replacement

20,165.00

20,165.00

Middle. School Incentive Program

85,012.00

85,012.00

Special Instructional Assistance

64,574.00

64,574.00

In-School Suspension

70,796.00

70,796.00

Mid-tenn Adjustment

237,277.00

237,277.00

Counselors

10,162.00

10,162.00

TechnoloQy Specialist

28,642.00

28,642.00

Local Five Mill Share

-385,091.00

-385,091.00

Educational Equalization Fonnula

401,547.00

401,547.00

Food Services

$ 31,932.00

31,932.00

Vocational Education

458.00

3,571.92

4,029.92

Other State Programs

Apprenticeship Program

2,000.00

2,000.00

At-Risk Summer School Program

2,017.19

2,017.19

Environmental Science Program

-104.77

-104.77

Health Insurance

70,281.59

70,281.59

Mentor Teachers

2,430.00

2,430.00

Preschool Handicapped Program

18,806.00

18,806.00

Remedial Summer School

1,983.68

1,983.68

Teachers' Retirement

9,718.70

9,718.70

Lottery Programs

Assistive Technology

10,711.90

10,711.90

Computers in the Classrooin

53,000.00

53,000.00

Georgia State Financing and Investment Commission Reimbursement on Construction Proje~

$ 979,078.00

979,078.00

Office of School Readiness Pre-Kindergarten Program

44,526.72

44,526.72

Office of Treasury and Fiscal Services Public School Employees Retirement

15,896.00

15,896.00

$ 5,076,741.39 $ 143,742.54 $ 979,078.00 $ 6,199,561.93

See notes to the general purpose financial statements.

-28-

CITY OF COMMERCE BOARD OF EDUCATION. JACKSON COUNTY SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30. 2000

SCHEDULE "3"

PROJECT
Remodeling and renovating existing classrooms, instructional and support space, providing equipment, fixtures and furnishings for such areas and providing new stadium bleachers, all at Commerce High School.
Constructing additional classrooms, remodeling and renovating existing classrooms, instructional and support space and providing equipment, fixtures and furnishings, all at Commerce Elementary School.
Constructing additional classrooms, remodeling and renovating existing classrooms, instructional and support space and providing equipment, fixtures and furnishings for such areas, all at Commerce Middle School.
Purchasing school buses.

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT YEAR (3)(4)

AMOUNT EXPENDED
IN PRIOR YEARS

$ 3,101,900.00 $ 3,101,900.00 $ 1,579,808.00 $ 326,254.90

1,119,380.00 1,119,380.00

22,344.27

914,945.27

628,920.00 78,200.00

628,920.00 106,843.22

22,009.17

536,565.45 106,843.22

$ 4,928,400.00 $ 4,957,043.22 $ 1,624,161.44 $ 1,884,608.84

(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 the projects. Includes all cost from project Inception to completion.

(3) The voters of the City of Commerce Jackson County approved the imposition of a 1% sales tax to fund the above projects and associated debt. Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the projects.

(4) In addition to the expenditures shown above, the Board. has incurred interest expense to provide advance funding for the above projects as follows:

Prior Years

$ 171,946.46

Current Year Total

97,422.50 $ 269,368.96

See notes to the general purpose financial statements. 29.

CITY OF COMMERCE BOARD OF EDUCATION- JACKSON COUNTY ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS- OVERALL
GENERAL FUND- QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30. 2000

SCHEDULE "4"

Minimum Expenditure Requirements (Total Allotment) Expenditures on Combined Program Basis
Salaries Operations
Less: Expenditures for Media Center Programs in Excess ofTotal Media Allotment
Expenditures per Audit
Amount of Underexpenditure for Total Allotment

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$

3,825,942.00 $

110,921.00

$

3,951,959.20

254,419.41 $

$

4,206,378.61

231,577.41

-83,695.29 $ _ _..::.4!..!,1::22::,;,6:::8::::3::::.3:.2

$

0.00 $=====0.=00;.

See notes to the general purpose financial statements. - 31

y

CITY Of COMMERCE BOARQ OF EQUCATION ~JACKSON COUNTY, .

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS BY PROGRAM

GENERAL FUNQ OLJALITY BASIC EDUCATION PROGRAMS

YEAR ENDEQ JUNE 30 2000

SCHEDULE "5"

EDUCATION TOTAL
REOUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF' UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$

284,917.00 $

331,876.51 $

6,229.87 $

338,106.38

715,195.20

693,954.05

21,282.34

715,236.39

$ 1,000,112.20 $ 1,025,830.56 $

s 27,512.21

1,053,342.77 $

0.00

291,881.90

393,812.64

12,049.78

405,862.42

0.00

509,479.10

669,260.10

21,767.09

691,027.19

0.00

266,734.60

304.345.08

. 18.396.25

322,741.33

0.00

198,606.90

383,559.57

9,325.54

392,885.11

0.00

179,818.90

173,836.40

21,388.97

195,225.37

0.00

$ 2,446,633.60 $

2,950,644.35 $

110.439.84 $ 3,061,084.19

$

758,262.40

$

57,923.68 $ 257,806.67 350,237.38

1,330.13 $ 1,709.13 116,508.11
523.94

59,253.81 259,515.80 466,745.49
523.94

$

758,262.40 $

665.967.73 $

120,071.31 $

786,039.04

0.00

72,599.40

73,380.39

163.36

73.543.75

0.00

$

830,861.80 $

739,348.12 $

120,234.67 $

859,582.79

s

82,633.80 $

82.802.44 $

902.90 $

83,705.34

0.00

s 3,360,129.20 $

J,7n,794.91 $

231,577.41 $ 4,004,372.32

$

86.396.70 $

179,164.29

$

179,164.29

0.00

22,740.00

$

22,842.00

22.842.00

0.00

$

109,136.70 $

179,164.29 $

22,842.00 $

202.006.29

$ 3,469,265.90 $ 3,951,959.20 $

254,419.41 $ 4,206.378.61 $

0.00

$

10,341.00

21,554.00

$ ==.;3:.\1!,8~95~.0~0

$

27,766.48 $

27,766.48

4,833.04

4,833.04

$

32,599.52 $

32,599.52 $ ======~0;::.0~0

- 33 -

SECTION IT COMPLIANCE AND INTERNAL CONfROL REPORTS

RussELL \\'. HINTON
STATE AUDITOR (404} 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 19,2001

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Commerce Board of Education
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of City of Commerce Board of Education as of and for the year ended June 30, 2000, and have issued our report thereon dated March 19, 200 I. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether City of Commerce Board of Education's financial statements are free of material misstatement, we perfoll11ed tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered City of Commerce Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted certain matters involving the internal control
2000YB-40

over financial reporting and its operation that we consider to be reportable conditions. 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 ourjudgment, could adversely affect

City of Commerce Board of Education's ability to record, process, summarize and report financial

data consistent with assertions ofmanagement in the financial statements. Reportable conditions are

described in the accompanying Schedule ofFindings and Questioned Costs as items FS-7711-00-02,

FS-7711-00-03 and FS-7711-00-05.

.

A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions, and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, ofthe reportable conditions described above, we consider item FS-7711-0005 to be a material weakness.

This report is intended solely for the information and use of management, members of the City of Commerce Board of Education, 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.

RWH:gp 2000YB-40

R sell W. Hinton State Auditor

RussELL W. HtNTON
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W.. Suite 214 Atlanta, Georgia 30334-R400
March 19, 2001

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Commerce Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of City of Commerce Board of Education with the types of compliance requirements described in the U.S. Office ofManagement and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30,2000. City of Commerce Board ofEducation's major Federal programs are identified in the accompanying Schedule ofFindings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of City of Commerce Board of Education's management. Our responsibility is to express an opinion on City of Commerce Board of Education's compliance based on our audit.
We conducted our audit ofcompliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, 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 Commerce Board ofEducation's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on City of Commerce Board of Education's compliance with those requirements.
2000SA-10

In our opinion, the City of Commerce Board ofEducation 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, 2000.
Internal Control Over Compliance
The management of City of Commerce Board of Education is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered City of Commerce Board of Education's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133.
Our consideration 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 of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course ofperforming their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weakne.sses.
This report is intended solely for the information and use of management, members of the City of Commerce Board of Education, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,

RWH:gp 2000SA-10

State Auditor

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

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30,.2000

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-7711-98-03 FS-7711-98-04 FS-7711-98-06 FS-7711-99-0 I

Umesolved - See Corrective Action/Responses Previously Reported Corrective Action Implemented Further Action Not Warranted Umesolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

EXPENDITURES/LIABILITIES/DISBURSEMENTS

Failure to Meet Expenditure Requirements

'

Amount: $201.64

Finding Control Number: FS-7711-98-03

This finding will be resolved by Georgia Department of Education through a future increase in the Board's local share portion of QBE Allotments.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7711-99-01

Due to 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.

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FA-7711-99-01

Previously Reported Corrective Action Implemented

SECTION IV FINDINGS AND QUESTIONED COSTS

CITY OF COMMERCE BOARD OF EDUCATION- JACKSON COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2000

I SUMMARY OF AUDITOR'S RESULTS

I. Tvoe of Report Issued on the Financial Statements The auditor's opinion on the City of Commerce Board of Education's financial statements was qualified for various departures from generally accepted accounting principles.

2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the City ofCommerce Board ofEducation disclosed financial statement reportable conditions related to the following coritrol categories.

General Ledger

Generai Fixed Assets

Of the reportable conditions described above, General Fixed Assets is considered to be a. material weakness.

3. Noncompliance Material to the Financial Statements The audit of the City of Commerce Board of Education disclosed no instances of noncompliance that were deemed to be material to the financial statements.

4. Reportable Conditions in Internal Control Over Major Programs The audit report for the City of Commerce Board of Education did not disclose any reportable conditions in internal control over major programs.

5. Tvoe of Report Issued on Compliance for Major Programs The auditor's opinion on the City ofCommerce Board of Education's report on compliance with requirements applicable to major programs was unqualified.

6. Audit Findings Required to be Reported by Section .510(a) ofOMB Circular A-133 The City of Commerce Board ofEducation's audit did not disclose audit findings required to be reported by section .510(a) ofOMB Circular A-133.

7. Major Programs Federal awards audited as major programs are as follows: I0.553 Food and Nutrition Program- Food Services- School Breakfast Program I0.555 Food and Nutrition Program- Food Services- National School Lunch Program

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

9. Low Risk Auditee The City of Commerce Board of Education did not quality as a low risk auditee as defined by Section .530 ofOMB Circular A-133.

-I -

CITY OF COMMERCE BOARD OF EDUCATION- JACKSON C::OUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000

II FINANCIAL STATEMENT FINDINGS AND OUESTIONED'COSTS ..

BUDGET AND BUDGET EXECUTION,

.. ,

Failure. to Adopt a Balanced Budget,

I'

Nonmaterial Noncompliance

..

,

Finding Control Number: FS-7711-00-01

. .

I '

<'

. A review ofthe budget process indicatedthe City ofCommerce Board ofEducation failed tQ adopt a

balanced budget for.,its Special Revenue Fund as required: by Chapter 32 of the. Financial

Management for Georgia Local Units of Administration (FMGLUA). Chapter 32 of FMGLUA

states "School boards must adopt balanced budgets". This noncomplia,nce .was the. result of the

Board's failure to budget adequate revenue in various Lottery and Federal Program Funds within the

Special Revenue Eund.. Appropriate procedures should lie established and implemented by the Board

to ensure that budgets are prepared in accordance with requirements ofFMGLUA.

Management's Response:

. '

J. .:t :. "~

. _, :a

We concur with this finding. Appropriate procedures are'being established and implemented to

ensure that budgets are prepared in accordance with requirements ofFMGLUA. ' . --.,

GENERAL LEDGER :.

- Inadequate Accounting Procedures: .

Reportable Condition Finding Control Number: FS-Tll1-00c02

,.,

-. .' _~,

-

"'

' ....... ' t

; ' ~.

The City of Commerce Board of:Education's internal controls over the .following accounting

procedures were determined to be insufficient:

- \_

. "\1

-:



'r' .. (1) Required program codes were not utilized in identifying Bus Replacement expenditures

within the General Fimd..

, .

. ,

. : . i

(2) Revenue codes were not utilized within the General Fund and. Capital Projects Fund.

Various local and revenues from the Georgia State.Financing Commission were coded as

transfers-in instead of being assigned appropriate and'separate revenue codes.

"i '.

- . -; ~ . ~ ) .. ;

-1 :t ' .

' ' -::: - ~

(3) The Accounts Receivable subsidiary ledger contained invalid receivables totaling

$71,284.18 and $24,488.60 in the General Fund and Special Revenue Fund, respectively.

These discrepancies .occuiTed due. to duplicate posting of receivables and failure to

reconcile subsidiary ledger: In addition, the Capital Projects Fund contained an invalid

receivable in the amount of$22,942.00, posted by journal entry, but nofrefl!)cted oh the

'

. Accounts Receivable subsidiary ledger. Appropriate audit adjustrmlnts were made to

correct these misstatements.

t ..

-2-

CITY OF COMMERCE BOARD OF EDUCATION- JACKSON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 2000
ll FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL LEDGER Inadequate Accounting Procedures Reportable Condition Finding Control Number: FS-7711-00-02
(4) Accounting records applicable to the Federal Vocational Education- Basic Grants to States - High School Program- Basic Grant (CFDA 84.048) were not maintained on an individual project basis. Each project in this program requires a separate budget and project completion report. Expenditures for the Professional Development Project were not identifiable within the accounting records. Additionally, no revenues or related receivables were booked for amounts requested in late June, 2000.
These deficiencies occurred because management failed to utilize Chapter 41 and Appendix C ofthe Financial Management for Georgia Local Units ofAdministration (FMGLUA). Chapter 41 requires that accounting records be adequately segregated to ensure identification of revenues and expenditures by specific project. Appendix C is the state approved Chart ofAccounts that identifies specific codes for all revenue and expenditure accounts that are common to boards of education across the state. Additionally, management failed to reconcile accounts receivable subsidiary ledgers to the general ledger in a timely manner.
Management should implement procedures to ensure that all revenues and expenditures are properly coded according to state guidelines as outlined in FMG.LUA Appendix C. Management should also ensure that subsidiary ledgers are periodically reconciled to the accounting records.
Management's Response:
We concur with this finding. Appropriate procedures are being implemented to ensure that all revenues and expenditures are properly coded according to state guidelines as outlined in FMGLUA Appendix C and that subsidiary ledgers are periodically reconciled tothe accounting records.
GENERAL LEDGER Failure to Maintain Separate Accountability Reportable Condition Finding Control Number: FS-7711-00-03
The capital outlay project activity, funded in part by the Georgia State Financing and Investment Commission, was not maintained and designated by project name and number as required by Chapter 41 ofthe Financial Management for Georgia Local Units ofAdministration (FMGLUA). Extensive audit procedures were used to prepare the combining financial statements on a project basis utilizing source documentation available.
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. ~ CITY OF COMMERCE BOARD OFEDUCATION- JACKSON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 2000

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

. GENERAL LEDGER Failure to Maintain Separate Accountability Reportable Condition Finding Control Number: FS-7711-00-03

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. Chapter 41 of FMGLUA states, 'IEach LUA (Local Unit of Administration) must assign and maintain separate identificationofand accounting for each project in the capital projects fund". The inadequate accounting records resulted because management failed to follow FMGLUA guidance

. concerning the proper recording of capital outlay project activity..

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The Board should implement internal controls to insure' that capital outlay activity is accurately identified and reported by project within the current fund accounting system as required.

. Management's Response: . '

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We concur with this finding. Apprc:>priate procedures were implemented during the 2001 fiscal year

to insure that capital outlay activity is accurately identified and reported by project within the current

fuhd accounting system.

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GENERAL LEDGER

Project Completion Report NoLSupported by Accounting Records

Financial Statements

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Nonmaterial Noncompliance

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Finding Control Number: FS-7711-00-04

A comparison ofthe project completion report ofthe Individuals with Disabilities Education ActPart B- Special Education" Flow Through Program (CFDA 84.027) and. the accounting records revealed thafreported expenditures were.not supported'by the accounting records. As a result, extensive audit procedures were necessilry to determine that expenditure amounts reported on the Flow Through completion report were actually Title I program expenditures. This reporting error resulted in Flow Through expenditures of$1 07,951.08 being reported to the Georgia Department of Education as $114,960.44, an overstatement of$7,009.36 on the completion report. ..

The reporting error occurred because ofmanagement's failure to adequately review arriounts reported

on the completion reports before transmittal to the Georgia Department of Education. The Board

should implement procedures to ensure that project completion reports contain accurate infomiation

that can be tra.ce,.d_ directly to the accounting records.

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Management's Response:

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We concur with this finding. Appropriate procedures are being implemented to ensure that project

completion reports contain accurate information as supported by the accounting records.

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CITY OF COMMERCE BOARD OF EDUCATION- JACKSON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 2000
IT 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-7711-00-05 During the year under review, the Board did not maintain a system-wide General Fixed Assets Account Group within the formal acfounting 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 of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the Board and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group. Management's Response: We concur with this finding. Due to current staffing limitations and budgetary considerations prohibiting the hiring of additional administrative staff the Board has decided not to pursue the recording of general fixed assets on the financial statements. lli FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.
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