City of Commerce Board of Education, a component unit of the City of Commerce, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2001

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

FINANCIAL

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

EXHIBITS

GENERAL-PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

. CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

,F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

SCHEDULES '

1 SCHEDULE OF EXPENDITURES OF-FEDERAL AWARDS

2 SCHEDULE OF STATE REVENUE

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

11

4

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5

BY PROGRAM BY SITE

Page
2 4 6 7
18 20 22 24 26 28 31 32
33

CITY 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 WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133
SECTION ill 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
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SECTION I FINANCIAL

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I RliSSEl.1. \\'. HI:-.TOr-,
STATE AUQITOR 1404) 6562'74

2:'i-l Washington Strccl. S.W.. Suitc 21-1 Atlanta. Georgia 30:n-l-X4()()
February 28, 2002

Honorable Roy E. Barnes, Governor

Members of the General Assembly

Members of the State Board of Education

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and

Superintendent and Members of the

City of Commer~eBoard 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 Bo.ard of Education, a component unit of the City of Commerce, Georgia, as of and for the year ended June 30, 2001, 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 auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perfonn 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 of Education'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:

2001ARL-13

* The general-purpose financial statements of the Board of Education did not contain a
General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting principles.

* School activity accounts maintained at the individual schools are not included in the

general-purpose financial statements. To conform to generally accepted accounting

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principles, these accounts should be included in the general-purpose financial

statements.

* The Board of Education did not recognize as expenditures, in the year ended .
June 30, 2001, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30,2001. Also funds received, subsequent to June 30, 2001, 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, 2000, were improperly recorded in the year ended June 30, 2001. 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 statements of these variances or omissions have not been determined, but are believed to be material.

In our opinion, except for the effects on the general-purpose financial statements of the matters referred to in the preceding paragraph, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position of the City of Commerce Board of Education as ofJune 30, 2001, and the results of its operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

In accordance' with Government Auditing Standards, we have also issued our report dated February 28, 2002, 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 I through 5), which includes the Schedule of Expenditures of Federal Awards ~s required by U. S. Office of Management and Budget Circular A-I33, 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

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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. A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press of the State, as provided for by Official Code ofGeorgia Annotated Section 506-24.
------Respectfully submitted,
RWH:gp 2001ARL-13

CITY OF COMMERCE BOARD OF EDUCADON - JACKSON COUNTY

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 2001

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

$

276,744.52 $

3fj,123.98

605,078.93

439,228.24

85,191.34

10,116.58 3,440.88

Total Assets

$ 1,321 ,051.69 $ =====13=6;,;;,8=7=2.=78:=

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 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

$

2,497.00 $

12,111.84

50,140,49

10,467.72

$

2,497.00 $ _ _..:..;72=.1,.:...;72::,:0:.:.;.0:..::5:-

$

23,049.28

$

10,116.58

3,440.88

70,883.20 1,224,622.21
$ 1,318,554.69 $

50,595.27 64,152.73

T.otalliabilities and Fund Equity

$ 1,321,051.69 $

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

136,872.78

EXHIBIT "A"

ACCOUNT

TYPES

GROUP

CAPITAL

GENERAL

TOTALS

PROJECTS

LONG-TERM

(Memorandum Only)

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FUND

DEBT

JUNE 30, 2001

JUNE 30, 2000

S

645,788.54

$

960,657.04 $ 1,892,885.97

634,280.64

1,239,359.57

1,613,633.10

271,208.60
I

795,628.18

665,338.33

$

19,673.46

10,116.58 3,440.88
19,673.46

11,098.50 3,162.32
39,915.11

$ 1,551,277.78 $

19,673.46 $

3,028,875.71 $
1

4,226,033.33

$

30,795.79

109,162.75. 114,903.93
$

$

254,862.47 $

$
19,673.46 19,673.46 $

$ 45,404.63 50,140.49 10,467.72 109,162.75 114,903.93 19,673.46
349,752.98 $

21,495.69 12,334.84 48,846.00
2,128.60 241,186.49 136,204.25
39,915.11
502,110.98

$ 1,296,415.31
0.00 $ 1,296,415.31

$

23,049.28 $

15,396.51

201.64

10,116.58 3,440.88
1,296,415.31

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

70,883.20 1,275,217.48

34,698.32 1,400,600.06

$' 2,679,122.73 $ 3,723,922.35

, $ 1,551,277.78 $

19,673.46 $ 3,028,875.71 $ 4,226,033.33 - 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, 2001

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration Sch'ool 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 (USES)
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 JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

$ 5,961,860.43 $
1,592,378.30 274,663.18
$ 7,828,901.91 $

146,295.45 513,975.00
193,980.04
854,250.49

$ 5,021,197.54 $

203,185.04 192,224.10 216,861.38 207,459.73 510,027.45 126,309.35 646,127.02 115,738.56 103,768.77
201.04

28,252.27 496,312.20

20,241.65 1,667.58

$ 7,889,573.68 $

$

-60,671.77 $

343,755.27 6,812.36 17,538.96 14,985.01 40.00
2,716.83 3,476.32 468,928.70 2,071.84
860,325.29 -6,074.80

$ $ . -17,180.83

$

-17,180.83 $

$

-77,852.60 $

1,396,407.29

2,180.83
2,180.83
-3,893.97 68,750.06
-981.92 278.56

FUND BALANCE JUNE 30

$ 1,318,554.69 $===6=4==,1=5=2.=7==3

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

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EXHIBIT "B"

TOTALS

II

CAPITAL

(Memorandum Only)

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PROJECTS

YEAR ENDED

FUND

JUNE 30, 2001

JUNE 30, 2000

$

171,541.11 $ 6,279,696.99 $ 6,199,561.93

513,975.00

516,912.88

939,922.39

2,532,300.69

2,441,817.48

55,026.43

523,669.65

578,147.56

$ 1,166,489.93 $ 9.,849,642.33 $ 9,736,439.85

$ 5,364,952.81 $ 4,640,602.36

$ 1,423,519.48

209,997.40 209,763.06 216,861.38 222,444.74 510,067.45 " 126,309.35 646,127.02 118,455.39 107,245.09
201.04 468,928.70
30,324.11 1,919,831.68

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

20,241.65" 1,667.58

68,625.67 3,578.30

$ 1,423,519.48 $ 10,173,418.45 $ 9,061,359.59

$ -257,029.55 $ -323,776.12 $

675,080.26

$

15,000.00 $

17,180.83 $

11,882.13

-720,320.14

-737,500.97

-680,918.68

$

-705,320.14 $

-720,320.14 $

-669,036.55

$ -962,349.69 $ -1,044,096.26 $

6,043.71

2,258,765.00

3,723,922.35

3,717,592.98

. -981.92 278.56

431.92 -146.26

$ 1,296,415.31 $ 2,679,122.73 $ 3,723,922.35

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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, 2001

EXHIBIT "C"

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES

State Funds Federal Funds Taxes Other Funds'

S 5,557,205.43 $ 5,961,860.43

1,559,875.00 156,442.00

1,592,378.30 274,663.18

Total Revenues

$ 7,273,522.43 $ 7,828,901.91

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

$ 5,172,311.34 $ 5,021,197.54

145,979.64 211,426.77 211,202.08 192,272.81 533,352.84 127,976.70 605,177.00 117,491.36 123,865.18

203,185.04 192,224.10 216,861.38 207,459.73 510,027.45 126,309.35 646,127.02 115,738.56 103,768.77
201.04

20,000.00

28,252.27 496,312.20
21,909.23

Total Expenditures

$ 7,461,055.72 $ 7,889,573.68

Excess of Revenues over (under) Expenditures

$ -187,533.29 $ -60,671.77

OTHER FINANCING SOURCES (USES)

Other Sources Other Uses

$

2,000.00

S -17,180.83

Total' Other Financing Sources (Uses)

$

2,000.00 $ -17,180.83

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1, 2000
Adjustments Food Inventory - Net Change in Period
Donated Commodities Purchased Food

$ -185,533.29 $ -77,852.60

1,228,941.26

1,396,407.29

-71,284.18

FUND BALANCE JUNE 30, 2001

$ 972,123.79 S 1,318,554.69

The notes to the general-purpose financial statements are an integral part of this statement. ~ 6-

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 155,305.70 $ 146,295.45

552,423.00

513,975.00

178,876.00

193,980.04

$ 886,604.70 $ 854,250.49.

$ 360,847.70 $ 343,755.27

15,800.00 20,475.00

6,812.36 17,538.96

17,446.00

14,985.01 40.00

7,800.00 5,700.00 12,000.00 445,536.00 1,000.00

2,716.83 3,476.32
468,928.70 2,071.84

$ 886,604.70 $ 860,325,29

$

0.00 $ -6,074.80

$ 2,180.83 $ 2,180.83

$

0.00 $ -3,893.97

68,003.92

68,750.06

6,215.81

-981.92 278.56

$ 74.219.73 $ 64,152.73

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001

EXHIBIT "D"

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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REPORTING ENTITY

The City of Commerce Board of Education (School District) was established under the laws 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 School District 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 of Education is

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determined to be a component unit of the City of Commerce, Georgia, which is the primary

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government.

FUND ACCOUNTING

The School District 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 accoun~ 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 Asset~ Account Group is not presently maintained by the School District. 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 confonn to generally accepted 'accounting principles, these accounts should be recorded in the general-purpose financial statements.

The general-purpose financial statements account for all State, Federal, Taxes and Other funds under control of the School District, 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 o.r most of a School District's educational activities.. Governmental Fund Types include:

GENERAL FUND - the fund used to account for all financial resources of the School District 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.

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CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30; 2001

EXHIBIT "D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 resources to be used for the acquisition or constmction of major capital facilities.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for capital lease obligations.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment appliedto a fund is determined byits 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 ofthese funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported. fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
Governmental funds are accounted for using the modified accmal basis of accounting under which:
Revenues are recognized when susceptible to accmal (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. The School District considers receivables collectedwithin sixty days after yearend to be available and therefore susceptible to accmal. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales taxes, intergQvernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accmal. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
Experidituresare generally recognized when the related fund liability is incurred.

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CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

,EXHIBIT "D"

JUNE 30, too I

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 of these contracts. During fiscal year 2001, a

substantial number ofpersonnel of the School District were employed for a one hundred and ninety

day period beginning in'August 2000 and ending in early June 2001. Personnel contracts for this

employment period specify that compensation be paid in twelve equal monthly payments beginning

in September 2000 and ending in August 2001. State grants to fund the State's share of these

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contracts were disbursed from the Georgia Department of Education to the School District in the

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same twelve months. As of June 30, 2001, compensation under these employment contracts had

been earned, but two of the twelve monthly payments, due for July and August 2001, had not been

made. Payments for these two months were made and re~orded as expenditures by the School

District subsequent to June 3'0,2001. Also, the State's portion of the compensation paid in July and

August 2001 was received and recorded as revenue in the fiscal year subsequent to June 30, 2001.

Conversely, the similar expenditures and related revenues for contractual services completed prior to

June 30, 2000, were recorded in the year ended June 30, 2001. 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 School District's fiscal year and is based upon estimates of expenditures together with ,probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.

The budget process begins when the School District's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral circul~tion 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 ofcash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.

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CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001

EXHIBIT "D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase of one year ot 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 Section 36-83-4 authorizes the School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(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,
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,
(7). Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia.
RECEIVABLES
Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the generai-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 Board of Commissioi1~rsfixed the property tax levy for the 2000 tax year (calendar year) on December 21,2000 (levy date). Taxes were due on March 2,2001 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end are reported as
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CITY OF COMMERCE BOARD OF EDUCAnON - JACKSON COUNTY EXHIBIT "D"

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NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

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JUNE 30, 2001

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i!'\
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

, revenue in fiscal year 2001. The City ofCommerce City Clerk bills and collects the property taxes for the School District and remits the taxes collected to the School District. Property tax revenues during the ,fiscal year ended June 30, 2001 for maintenance and operations amounted to $1,592,378.30.

The tax millage rate levied for the 2000 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

14.66 mills

SALES TAXES

Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $939,922.39 and was recorded in the Capital Projects Fund. The State will terminate collection ofthis tax once an additional $614,267.11 has been collected or on June 30, 2002, whichever oc~urs 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). In fiscal year 2001, the School District provided $720,320.14 ofSPLOST proceeds to the City Government for debt service on said general obligation debt.

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 ofpurchase. 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 School District has the following types of interfund transactions:

Reimbursements of expenditures initially made from a fund that are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.

- 11 -

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001

EXHIBIT "D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Operating transfers are recorded for all interfund transactions other than reimbursements.
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general-purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results of operations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
Note 2: DEPOSITS AND INVESTMENTS
COLLATERALIZAnON 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 s~rety bond, by guarantee of insurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance.. If a depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool . balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists ofany one of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obiigations of the counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority autnorized 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

:. 12 -

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

.

JUNE 30, 2001 .

EXHIBIT "D"

Note 2: DEPOSITS AND INVESTMENTS

(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the. United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intennediate Credit Bank, the Central Bank for Cooperatives, the Fann Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

CATEGORIZAnON OF DEPOSITS

/:

At June 30, 2001, the bank balances were $1,695,080.25. The amounts ofthe total bank balances are

1,1 I

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 School District or by the School District's agent in the School District's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the School District'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 School District's name.)

The School District's deposits are classified by risk category at June 30, 2001, as follows:

Risk Category

Bank Balance

1

$ 837,838.96

2

857,241.29

3

0.00

Total

$ 1,695,080.25

CATEGORIZAnON OF INVESTMENTS At June 30, 2001, the carrying value of the School District's total investments was $1,239,359.57 which.is materially the same as fair value. The investments are classified as to risk categories as follows:

Type of Investment

Carrying Amount

Fair Value

Investments Not Subject to Categorization Local Government Investment Pools Money Market Mutual Funds

$ 605,078.93 $ 605,078.93 634,280.64 634,280.64

Total Investments

$ 1.239.359.57 $ 1.239,359.57

- 13 -

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE GENER.A.L-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001

EXHIBIT "D"

Note 2: DEPOSITS AND INVESTMENTS

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 School District owns no identifiable securities. The investment policy of the State of Georgia, 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 descriptionofthe 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 of capital, 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. Participation in the pool is voluntary and deposits consist of funds from local' governments; operating and trust funds of Georgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund.

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 I may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2001, was 39 days. The average investment duration for Fund 6 on June 30, 2001, was 6 months.

Note 3: NON-MONETARY TRANSACTIONS

The School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories

Note 4: RISK MANAGEMENT

The School District is exposed to various risks of loss related to torts; theft of, damage to, and

destruction of assets; errors or omissions; job related illness or injuries to employees; natural disaster

and unemployment compensation.

.

- 14 -

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001

EXHIBIT "D"

Note 4: RISK MANAGEMENT

The School District has obtained commercial insurance for risk ofloss associated with torts, assets,

errors or omissions and job related illness or injuries to employees. The School District has neither

significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the

School District's insurance coverage in any of the past three years.

.

The School District has elected to self-insure for all losses related to natural disaster. The School District has not experienced any losses related to this risk in the past three years.

The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the General Fund with expenditure and liability being reported' when it is probable that a loss has occurred, and the amount ofthat loss can be reasonably estimated. The School District has not incurred any liabilities for unemployment compensation during the past two years.

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

Position Covered

Amount

Superintendent All Other Employees

$ 100,000,00 $ 10,000.00

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The City of Commerce Board of Education has entered into various lease agreements as lessee for buses 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 OBLIGAnON DEBT OUTSTANDING The changes in General Long-Term Debt during the fiscal year ended June 30, 2001, were as follows:

Capital Leases

Balance July 1,2000

$ 39,915.11

Deductions Payments

20,241.65

Balance June 30, 2001

$ 19,673.46

- 15 -

,~-------------------------------~.-_._----- -

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 200 I

. EXHIBIT "D"

Note 5: GENERAL LONG-TERM DEBT

At June 30; 2001, payments due by fiscal year which includes principal and interest for these items are as follows:

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

Capital Leases $ 20,459.23
785.77
$ 19.673.46

Note 6: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $95,288.91 for health insurance and retirement contributions paid on the School District's behalfby the following State Agencies.

Georgia Department ofEducation Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of$69,868.70

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $9,868.21

Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS)Employer's Cost In the amount of$15,552.00 .

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 School District believes that such disallowances, if any, will be immaterial to its overall financial position.

Note 8: SUBSEOUENT EVENTS

On September 18, 2001, the voters of Jackson County voted in favor of a Special Purpose Local Option Sales Tax referendum for educational purposes. The imposition of the tax approved by the voters, as stated on the Official Ballot of Jackson County, is as follows:

- 16 -

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001

EXHIBIT "D"

Note 8: SUBSEQUENT EVENTS

"Shall a special one percent sales and use tax be imposed in Jackson County (such tax to be a

continuation of the existing 1% sales and use tax and not an additional sales and use tax) for a

period of time not to exceed five years (20 calendar quarters) conunencing upon the expiration

of the existing one percent sales and use tax previously imposed for the raising of not more

than $43,000,000.00 of net proceeds by said tax, 64.57% or $27,765,100.00 ofwhich shall go

to the Jackson County School District, 16.51% or $7,099,300.00 of which shall go to the

. Commerce City School District and 18.92% or $8,135,600.00 of which shall go to the

Jefferson City School District, for the following projects:

.

.1

For the Commerce City School District

I

(i) Acquiring, constructing and equipping new school buildings and other buildings or facilities useful or desirable in connection therewith, (ii) acquiring new school equipment, (iii) adding to, renovating, repairing, improving and equipping existing school buildings or other buildings. or facilities useful or desirable in connection therewith, and (iv) acquiring any property necessary or desirable therefore, both real and personal (the "Conunerce School Projects"), the maximum amount oftheCommerce School Projects to be paid with sales tax proceeds will be $7,099,300.00."

Note 9: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

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

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

Fiscal Year

Percentage Contributed

Required Contribution

2001 2000 1999

100% 100% 100%

$ 526,033.88 $ 486,983.08 $ r 488,735.57

- 17 -

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 2001

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

SCHOOL FOOD
SERVICES FUND

LOTIERY PROGRAMS

$

79,662.25

$

5,700.00

10,116.58 3,440.88

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

$

93,219.71 $==~5~,7~00::;;.~00~

$

$

5,333.98

23,733.00

$

29,066.98 $

256.13 1,016.46 4,321.16
106.25
5,700.00

$

10,116.58

3,440.88

50,595.27 $

0.00

$

64,152.73 $

0.00

$

93,219,71 $==~5i:,;",7~00::;;.~00;;."

See notes to the general-purpose financial statements. - 18 -

EXHIBIT"E"

FEDERAL PROGRAMS

TOTALS

JUNE 30,2001

JUNE 30, 2000

I,

$

79,662.25 $

87,539.18

I

$

79,491.34

85,191.34

29,948.30

10,116.58 3,440.88

11,098.50 3,162.32

$

79,491.34 $

178,411.05 $ ==1=3=1=,7=48=.=30==

$

41,282.14 $

41,538.27

5,761.40

12,111.84 $

12,023.64

22,086.33

50,140.49

48,846.00

10,361.47

10,467.72

2,128.60

$

79,491.34 $

114,258.32 $

62,998.24

$

10,116.58 $

11,098.50

3,440.88

3,162.32

$

---'o:;.;..o~O,_

50,595.27

54,489.24

$

0.00 $

64,152.73 $ _ _..::6:.::;8.l.:.,7.=.50:::..:.:.;06~

$

79,491.34 $

178,411.05 $

131,748.30 .

- 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. 2001

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration School Administration Student Transportation Services Central Support Services Food Services Operation Community Services Operations
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Operating Transfers In
Excess of Revenues and Other Financing Sources ov~r (under) Expenditures
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food
FUND BALANCE JUNE 30

SCHOOL FOOD
SERVICES FUND

LOTIERY PROGRAMS

$

32,888.00 $

113,407.45

238,166.69

193,980.04

$

465,034.73 $

113,407.45

$

113,995.15

$

468,928.70

40.00 120.00

$

468,928.70 $

114,155.15

$

-3,893.97 $

-747.70

$

-3,893.97 $

68,750.06

-981.92 278.56

747.70
0.00 0.00

$

64,152.73 $====~O.,;;;;OO~

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

EXHIBIT "F"

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

$

146,295.45 $

143,742.54

$

275,808.31

513,975.0Q

516,912.88

193,980.04

158,528.25

$

275,808.31 $

854,250.49 $

819,183.67

$

229,760.12 $

343,755.27 $

384,642.21

6,812.36 17,538.96 14,985.01
2,596.83 3,476.32
2,071.84

6,812.36 17,538.96 14,985.01 '
40.00 2,716.83 3,476.32 468,928.70 2;071.84

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

$

277,241.44 $

860,325.29 $

865,282.23

$

-1,433.13 $

-6,074.80 $

-46,098.56

1,433.13

2,180.83

6,485.74

$

0.00 $

-3,893.97 $

-39,612.82

0.00

68,750.06

108,077.22

-981.92 278.56

431.92 -146.26

$

0.00 $

64,152.73 $ ===6=80;,,7=50=.0=6=

-21 -

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY. COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 2001

ASSETS Cash and Cash Equivalents Investments Accounts Receivable

BOND PROCEEDS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$

0.00 $

118,819.51

124,662.96

Total Assets
LIABILITIES AND FUND EQUITY LIABILITIES
Accounts Payable Contracts Payable Retainages Payable
Total Liabilities
FUND EQUITY Fund Balances Reserved For Purposes of Bond Issue For SPLOST Projects For State Capital Outlay Projects Unreserved Undesig nated Total Fund Equity
Total Liabilities and Fund EqUity

$

0.00 $ ===2=4=3=,4=82=.4=7=

$

30,795.79

109,162.75

103,523.93

$.

243,482.47

$

0.00 $

$

0.00 $

0.00 0.00

$

0.00 $ ===2=4=3=,4=82=.4=7=

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

EXHIBIT "G"

SPECIAL PURPOSE LOCAL OPTION SALES TAX

$

515,589.03 $

634,280.64

146,545.64

LOTIERY PROJECT

TOTALS

JUNE 30, 2001

JUNE 30, 2000

11,380.00 $

645,788.54 $ 1,805,346.79

634,280.64

578,766.21

271,208.60

252,042.74

$ 1,296,415.31 $

11,380.00 $ 1,551,277.78> $ 2,636,155.74

$.

30,795.79

109,162.75 $

241,186.49

$

11 ,380.00

114,903.93

136,204.25

$.

11,380.00 $

254,862.47 $

377,390.74

$ 1,296,415.31
0.00 $ $ 1,296,415.31 $

$
0.00 0.00 $

$ 1,296,415.31
0.00 1,296,415.31 $

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

$ 1,296,415.31 $

11,380.00 $ 1,551,277.78 $ 2,636,155.74

- 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, 2001

REVENUES
State Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Capital Outlay Supplies Land and Land Improvements Building and Building Improvements
Debt Service Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
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 JULY 1
FUND BALANCE JUNE 30

BOND PROCEEDS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$

171,541.11

$

14,573.19

$

14,573,19 $

171,541.11

$

52,951.43 $

1,370,568.05

$

52,951.43 '$

1,370,568.05

$

-38,378.i4 $ -1,199,026.94

$

15,000.00 $

-1,124,774.19

$ -1,109,774.19 $

1,126,255.34 1,126,255.34

$ -1,148,152.43 $ 1,148,152.43

-72,771.60 72,771.60

$

0.00 $ =====O;;';"';;';OO~

See n9tes to 'the general-purpose financial statements. - 24-

EXHIBIT"H"

SPECIAL PURPOSE LOCAL OPTION SALES TAX

LOTIERY PROJECT

TOTALS

YEAR ENDED

JUNE 30,2001

JUNE 30, 2000

$

$

939,922.39

40,453.24

$

980,375.63 $

0.00 $ . 0.00 $

171,541.11 $ 939,922.39
55,026.43

979,078.00 881,942.48 138,629.93

1,166,489.93 $ . 1,999,650.41

$

0.00 $

$

0.00 $

$

980,375.63 $

$

-721,801.29

$

-721 ,801.29

$

258,574.34 $

1,037,840.97

$ 1,296,415.31 $

0.00 $
0.00 $ 0.00 $

$ 1,423,519.48
1,423,519.48 $ -257,029.55 $

11,359.51 1,000.00
1,561,507.19
49,226.57 1,068.17
1,624,161.44
375,488.97

$ 1,141,255.34 $

588,922.86

-1,846,575.48

-1,257,959.41

$

-705,320.14 $

-669,036.55

0.00 $ 0.00

-962,349.69' $ 2,258,765.00

-293,547.58 2,552,312.58

0.00 $ 1,296,415.31 $ 2,258,765.00

- 25-

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2001

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 Breakfast Program National School Lunch Program
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 of Agriculture
Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education Act Part B - Special Education Flow Through Preschool Capacity Building Improvement Grant
Total Special Education Cluster
Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies Title II Eisenhower Professional Development Title VI Innovative Education Program Strategies Class Size Reduction 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

PASSTHROUGH
ENTITY 10
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

10.553 10.555

N/A

$ 47,933.58

N/A

161,842.02 $

$ 209,775.60 $

(2) 446,526.96 (3)
446,526.96

10.550 10.558

N/A

22,401.74

22,401.74

N/A

5,989.35

$ 238,166.69 $

(2) 468,928.70

84.027 84.173 84.027

N/A

$ 81,132.08 $

N/A

10,187.00

N/A

1,864.24

$ 93,183.32 $

81,132.08 10,187.00
1,864.24
93,183.32

84.010 84.281 84.298 84.340 84.186
84.048
84.186

N/A

113,326.99

N/A

16,000.00

N/A

5,967.00

N/A

20,289.00

N/A

4,710.00

113,326.99
17,035.08 (3)
6,139.29 (3) 20,290.14 (3)
4,748.93 (3)

N/A

12,332.00

12,445.97 (3)

N/A

10,000.00

$ 275,808.31 $

10,071.72 (3) 277,241.44

Total Federal Financial Assistance
N/A = Not Available

- 26-

$ 513,975.00 $==,;"74=6~,1=7,;;,0.=14,;,,

I:
I
I[I

f

CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY

SCHEDULE "1"

II

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

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YEAR ENDED JUNE 30, 2001

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Notes to the Schedule of Expenditures of Federal Awards
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(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.

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(2) Expenditures for the Child and Adult Care Food Program and the School Breakfast Program were not maintained

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separately and are included in the 2001 National School Lunch Program. (3) Expenditures for this program include State, and/or Other Funds.
Expenditures are not maintained by fund source.

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n Major Programs are identified by an asterisk in front of the CFDA number.

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The School District did not provide Federal Assistance to any Subrecipienl.

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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 accrual basis of accounting which is

the basis of accounting used in the presentation of the general-purpose financial statements.

See notes to the general-purpose financial statements.

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CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30. 2001

SCHEDULE "2"

AGENCY/FUNDING

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

GRANTS Community Affairs. Georgia Department of Local Assistance Grants

$ 35.000.00

$ 35,000.00

Education. Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early IntelVention Program Primary Grades (1-3) Program Upper Elementary Grades (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Category II Category III Category IV Category V Gifted Student - Category VI Remedial Education Program Alternative Education Program Media Center Program Limited English Speaking Students Program Staff and Professional Development Indirect Cost Categorical Grants Pupil Transportation Regular Bus Replacement Nursing SelVices Principal Supplements Vocational SupelVisors Education Equalization Funding Grant Food SelVices Vocational Education Other State Programs AtRisk Summer School Program Health Insurance Mentor Teachers Preschool Handicapped Program Remedial Summer School Teachers' Retirement Lottery Programs Computers in the Classroom Vocational Technology

287,456.00 44.996.00 921,934.00 380,443.00
664.940.00 563.120.00 178.936.00
52,503.00 167,021.00 486,840.00 123.259.00
6,515.00 49,971.00 57,641.00 50,527.00 123,662.00
6,242.00 35,267.00 957,541.00
75,338.00 20.862.00 44.222.00
5.680.00 6.529.00 461,342.00
$ 32,888.00 6.198.00
796.44 69,868.70
1,956.00 20,284.09
1,882.99 9.868.21
25.280.00 35.000.00

287,456.00 44.996.00
921,934.00 380,443.00 664,940.00 563,120.00 178,936.00
52,503.00 167,021.00 486,840.00 123,259.00
6,515.00 49.971.00 57,641.00 50,527.00 123,662.00
6,242.00 35,267.00 957,541.00
75.338.00 20,862.00 44,222.00
5,680.00 6,529.00 461,342.00 32,888.00 6.198.00
796.44 69.868.70
1,956.00 20,2M09
1,882.99 9,868.21
25.280.00 35.000.00

Georgia State Financing and Investment Commission Reimbursement on Construction Projects

$ 171,541.11

171 ,541.11

Office of the Governor Qffice of Planning and Budget Governor's Discretionary Fund (1)

10.000.00

10,000.00

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CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2001

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Office of School Re'adiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement
CONTRACT Education, Georgia Department of After School Programs Georgia's Reading Challenge

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

.PROJECTS

FUND

FUND

FUND

TOTAL

$ 53,127.45
s 15,552.00

$ 53,127.45 15,552.00

17,667.00

17,667.00

$ 5,961,860.43 $ 146,295.45 $ 171,541.11 $ 6,279,696.99
(1) To provide funds for architectural and engineering fees associated with the planning and design of the Bill Anderson Center for Performing Arts.

See notes to the general-purpose financial statements.

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CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2001

SCHEDULE "3"

PROJECT

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT YEAR (3) (4)

, AMOUNT EXPENDED' IN PRIOR YEARS (3)

PROJECT STATUS

Remodeling and renovating existing classrooms, instructional and support space, providing equipment, fixtures arid furnishings for such areas and providing new stadium bleachers, all at Commerce High School

$ 3,101,900,00 $ 4,015,815,02 $ 1,125,264.36 $ 1,906,062.90 Ongoing

Constructing additional classrooms,

remodeling and renovating existing

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classrooms, instructional and support

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space and providing equipment,

fixtures and furnishings, all at

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Commerce Elementary School

1,119,380.00 1,253,252.00

39,453.71

937,289.54 Ongoing

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

628,920.00

834,769.98

258,801.41

558,574.62 Ongoing

Purchasing school buses

78.200.00

106,843.22

106,843.22 Completed

$ 4,928,400.00 $ 6.210,680.22 $ 1,423,519.48 $ 3,508.770.28

(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax.

(2) The School District's current estimate of total cost for the projects. Indudes 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 School District has incurred interest expense to provide advance funding for the above projects as follows:

Prior Years

$ 269,368.96

Current Year

73,310.00

Total

$ 342.678.96

See notes to the general-purpose financial statements.

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CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY GENERAL FUND - aUALlTYBASIC EDUCATION PROGRAM (aBEl
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2001

SCHEDULE "4"

TOTAL aBE FORMULA FUNDS

$

4.555,797.00 $ 4,755,399.24 $ 279,716.82 $ 5,035,116.06

(1) Comprised of State Funds plus Local Five Mill Share.

See notes to the general-purpose financial statements.

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CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM IQBE) ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2001

SCHEDULE "5"

Commerce Elementary School Commerce High School Commerce Middle School Central Office (Alternative Education Program)
TOTAL
(1) Comprised of State Funds plus Local Five Mill Share.

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

2,294,099.00 $

2,225,413.64

1,074,337.00

1,425,456.57

960,230.00

1,008,015.15

54,791.00

117,640,12

$

4,383,457.00 $ ====4=,7.7.6.=,=52=5...4.==8

See notes to the general-purpose financial statements. - 33-

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Slrccl.. S. W., Suite 214 Allanta ..Gl:orgia 30334-X400
February 28,2002

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Honorable Roy E, Barnes, Governor

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Members of the General Assembly

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Members of the State Board of Education

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Superintendent and Members of tile

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City of Commerce Board of Education

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REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL

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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 ofEducation as of and for the year ended June 30, 2001, and have issued our report thereon dated February 28,2002. 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 auditing standards generally accepted in the United States of America 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 performed 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 controlover 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

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control over financial reporting. However, we noted certain matters involving the internal control

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over financial reporting and its operation that we consider to be reportable conditions. Reportable

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conditions involve matters coming to our attention relating to significant deficiencies in the design or

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operation ofthe internal control over financial reporting that, in ourjudgment, could adversely affect

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

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

described in the accompanying Schedule ofFindings and Questioned Costs as items FS-771 1-01-01 ,

. FS-7711-01-02 and FS-7711-0l-03.

A material weakness is a condition in which the design or operation of one or more of the internal

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control components does not reduce to a relatively low level the risk that misstatements in amounts

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that would be material in relation to the financial statements being audited may occur and not be

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detected within a timely period by employees in the normal course of performing their assigned

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functions. Our consideration of the internal control over financial reporting would not necessarily

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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-7711-01-

03 to be a material weakness.

This report is intended solely for the information and use ofthe management, members ofthe 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 2001YB-40

Russ II W. Hinton State Auditor

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STATE AUDITOR

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(dO<',65;;'217d

DEPARTMENT OF AUDITSAND ACCOUNTS
2:'\4 WashiTl,!!IOTl Slreet. S.W" Suite 214 AtIJntJ. (ieor,!!i<l 30334-X40()
February 28, 2002

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-l33
Ladies and Gentlemen:
Compliance
We have audited the compliance of City of Commerce Board of Education with the types of .
u.s. compliance requirements described in the Office ofManagement and Budget (OMB) Circular
A-I33 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 200 I. City of Commerce Board ofEducation's major Federal programs are identified in .the Summary of Auditor's Results Section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of City ofCommerce Board of Education's management. Our responsibility is to express an opinion on City ofCommerce Board of Education's compliance based on our audit.
We conducted our audit of compliance In accordance with auditing standards generally accepted in ,the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A133, Audits of States, Local Governments. and Non-Profit Organizations. Those standards and OMB Circular A-l33 require that we plan and perform the audit to obtain reasonable assurance, about whether noncompliance with the types ofcompliance requirements referred to above that couid 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 of Education's compliance with those , requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on City-ofCommerce Board ofEducation's compliance with thoserequirements.
2001SA-40

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In our opinion, the City of Commerce Board of Education c.omplied, 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, 2001.

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Internal" Control. Over Compliance

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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,

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contracts and grants applicable to Federal programs. In planning and performing our audit, we

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considered City of Commerce Board of Education's internal control over compliance with

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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 comp.Iiance and to

test and report on internal control over compliance in accordance with OMB Circular A-I33.

We noted a certain matter involving the internal control over compliance and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over compliance that, in our judgment, could adversely affect City of Commerce Board of Education's ability to administer a major Federal program in accordance with applicable requirements oflaws, regulations, contracts and grants. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FA-77 I 1-01-01.

A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level of risk that noncompliance with the applicable requirements oflaws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over compliance 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, we believe that the reportable condition described above is not a material weakness.

This report is intended solely for the information and use of the management, members ofthe 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.

spectfully submitted,
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R sell W. Hinton
State Auditor

RWH:gp 2001SA-40

SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS
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CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY

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AUDITEE'S RESPONSE

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SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS

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YEAR ENDED JUNE 30, 2001

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PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-7711-98-03 FS-7711-99-01 FS-7711-00-01 FS-7711-00-02 FS-7711-00-03 FS-7711-00-04 FS-7711-00-05

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

CORRECTIVE ACTION/RESPONSES

GENERAL LEDGER Inadequate Accounting Procedures Finding C~ntrol Number: FS-7711-00-02

The planned corrective action that was implemented only partially corrected the deficiency and certain aspects ofthe problem remain. Management will put additional procedures in place to monitor the bus replacement program codes and, via reports prior to the closing of the fiscal year, verify that the accounts receivable subsidiary ledger is properly reconciled.

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

The planned corrective action that was implemented only partially corrected the deficiency and certain aspects ofthe problem remain. Management will put additional procedures in place to ensure that expenditures and funding source (GSFIC, SPLOST, or Local Funds) are more easily identified for each capital project.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7711-00-05

The School District did not pursue the recording of general fixed assets on the financial statements due to staffing limitations and budgetary considerations prohibiting the hiring of additional administrative staff.

The School District has met the requirement under GASB 34 for Fiscal Year 2002 and will meet the requirements of this finding when the audit of Fiscal Year 2002 occurs.

SECTION IV FINDINGS AND QUESTIONED COSTS

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CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY

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SCHEDULE OF FINDINGS AND QUESTIONED COSTS

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YEAR ENDED JUNE 30, 2001

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I SUMMARY OF AUDITOR'S RESULTS

1. Type 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 of Commerce Board ofEducation disclosed financial statement reportable conditions related to the following control categories.

General Ledger

General 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 disclosed a reportable condition in internal control over major programs for the following compliance requirement.

Activities Allowed or Unallowed

The reportable condition described above is not considered to be a material weakness.

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

6, Audit Findings Reguired to be Reported by Section .510ta) ofOMB Circular A-133 The City of Commerce Board of Education's audit disclosed an audit finding required to be reported by section .51 O(a)ofOMB Circular A-l33. This audit finding is included in section IV of this report.

7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program .; Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program

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

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CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001
I SUMMARY OF AUDITOR'S RESULTS
9. Low Risk Auditee The City of Commerce Board of Education did not qualify as a low risk auditee as defined by Section .530 ofOMB Circular A-133.
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL LEDGER Inadequate Accounting Procedures .Reportable Condition Repeated From Prior Year Finding Control Number: FS-7711-0 1-01
The City of Commerce Board of Education's internal controls were determined to be insufficient over the following accounting procedures:
(1) Required QBE program codes were not utilized In identifying Bus Replacement expenditures within the General Fund.
(2) The general ledger Accounts Receivable contained invalid amounts totaling -$22,886.00 and $131,729.00 in the Special Revenue Fund and Capital Projects Fund, respectively. These discrepancies occurred due to a failure to monitor and reconcile the Accounts Receivable subsidiary ledger to general ledger balances.
(3) Cash activity, as reported in the Cash Journals and individual fund ledgers, did not accurately reflect the cash balances and activity of the separate bank accounts.
These deficiencies occurred because management failed to comply with Chapter 41 and Appendix C of the Financial Management for Georgia Local Units of Administration (FMGLUA). Chapter 41 requires that accounting records be adequately segregated to ensure identification of specific program revenues and expenditures by project and fund. 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.. Management also failed to reconcile accounts receivable subsidiary ledgers to the general ledger in a timely manner: Finally, there were no internal controls in place to ensure that individual fund cash activity is properly reported, within the general ledger accounting system, by bank account.
Management should implement procedures to ensure that all revenues and expenditures are properly coded according to state guidelines as outlined in FMGLUA Appendix C. Management should also ensure that subsidiary ledgers are periodically reconciled to the accounting records and that cash activity on the general ledger agrees with actual cash activity as reported on the bank statements.
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CITY OF COMMERCE BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL LEDGER Inadequate Accounting Procedures Reportable Condition Repeated From Prior Year Finding Control Number: FS-7711-0 1-01
Management's Response:
We concur with this finding. Appropriate procedures are being established to ensure that all revenues and expenditures are properly coded according to state guidelines as outlined in FMGLUA Appendix C. Subsidiary ledgers will be periodically reconciled to the accounting records to ensure that cash activity on the general ledger agrees with actual cash activity as reported on the bank statements.
GENERAL LEDGER Failure to Maintain Separate Accountability Reportable Condition Repeated From Prior Year Finding Control Number: FS-7711-01-02
The City of Commerce Board of Education's 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 of Administration (FMGLUA). Extensive audit procedures were used to prepare the combining financial statements on a project basis utilizing source documentation available.
Chapter 41 of FMGLUA states, "Each capital project should be identified separately so that all revenues, expenditures, assets, liabilities, and equity including transfers can be traced to the project". This deficiency occurred because management failed to follow FMGLUA guidance concerning the proper recording of capital outlay project activity.
The School District should implement internal contrqls to insure that capital outlay activity is accurately identified and reported by project within the current fund accounting system.
Management's Response:
We concur with this finding. Management will implement appropriate procedures to ensure that capital outlay activity is accurately identified and reported by project within the current fund accounting system.
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CITY OF COMMERCE BOARD OF EDUCATION -JACKSON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-7711-0 1-03
The School District did not maintain a system-wide General Fixed Assets Account Group within the fonnal accounting records as required by generally accepted accounting principles. This condition results in the general-purpose financial statements ofthe School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory ofland, buildings and equipment owned by the School District 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. The School District has met the requirement under GASB 34 for Fiscal Year 2002 and will meet the requirements ofthis finding when the audit ofFiscal Year 2002 occurs.
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
ACTIVITIES ALLOWED OR UNALLOWED Inadequate Controls over the Maintenance of Production Records Reportable Condition U. S. Department of Agriculture Through Georgia Department of Education Finding Control Number: FA-7711-0l-01
Internal control deficiencies were noted in the Lunch Menu Management Records, maintained at Commerce High School, for the National School Food Lunch Program (CFDA 10.555). A review of the meal production records identified the following missing components:
. 1) The number of servings planned for each menu item. 2) The actual amounts served per item. 3) The amounts of useable foods leftover and stored for future use. 4) Identification of USDA food items used as ingredients in recipes. 5) A complete listing of the daily menu.
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CITY OF COMMERCE BOARD OF EDUCADON - JACKSON COUNTY

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SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001

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III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

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ACTIVITIES ALLOWED OR UNALLOWED

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Inadequate Controls over the Maintenance of Production Records

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Reportable Condition - Material Weakness

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U. S. Department of Agriculture

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Through Georgia Department of Education

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Finding Control Number: FA-7711-01-01

Nutrition standards as outlined in 7 CFR 210.10 provides, in part,' "Production and menu records shall be maintained to demonstrate that the required number of food components and food items or menu items are offered on a given day. Production records shall include sufficient information to evaluate the menu's contribution to the requirements on nutrition standards .... and the appropriate levels of nutrients and calories... "

These deficiencies occurred because management failed to review meal production records to ensure that all required components were adequately documented. The School District should implement procedures to ensure that Lunch Menu Management Records contain adequate documentation for all required components as required by 7 CFR 210.10.

Management's Response:

We concur with this finding. Appropriate procedures are being implemented to ensure that Lunch, Menu Management Records contain adequate documentation for all required components as required by 7 CFR 210.10.

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