Audit report, City of Dalton Board of Education, Whitfield County, year ended June 30, 1996

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AUDIT REPORT CITY OF DALTON BOARD OF EDUCAnON
WIDTFIELD COUNTY YEAR ENDED JUNE 30, 1996

STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

CITY OF DALTON BOARD OF EDUCATION - WlllTFIELD COUNTY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXHIBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

3

C

STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

5

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

7

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

20

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

24

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

28

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

29

SCHEDULES

1 SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

30

2 CASH AND CASH EQUIVALENTS

32

3 INVESTMENTS

33

4 ACCOUNTS RECEIVABLE

34

SCHEDULE OF REVENUE

5

STATE

35

6

TAXES AND OTHER

37

CITY OF DALTON BOARD OF EDUCATION - WillTFIELD COUNTY - TABLE OF CONTENTS-

SECTION I

FINANCIAL

ADDITIONAL FINANCIAL INFORMATION

SCHEDULES

SCHEDULE OF EXPENDITURES BY OBJECT

7

GENERAL AND SPECIAL REVENUE FUNDS

39

8

LOTTERY PROGRAMS

40

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

9

OVERALL

43

10

BY PROGRAM

44

11 SCHEDULE OF TRAVEL OF BOARD MEMBERS

46

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

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

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

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
June 19, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Dalton Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
Ladies and Gentlemen:
We have audited the general purpose financial statements (Exhibits A through D) of the City of Dalton Board of Education, as of and for the year ended June 30, 1996, as listed in the table of contents. These financial statements are the responsibility of the Board's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards, Government Auditing Standards, issued by the Comptroller General of the United States, and the provisions of the Office of Management and Budget Circular A-128, "Audits of State and Local Governments". Those standards and OMB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose 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.
96ARL-13

* School activity accounts maintained at the individual schools are not included in the general purpose
financial statements. To confonn to generally accepted accounting principles, these accounts should be included in the general purpose financial statements.
The aggregate effects on the general purpose financial statements of these variances or omissions have not been detennined, 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 fmancial statements present fairly, in all material respects, the financial position of the City of Dalton Board of Education as of June 30, 1996, and the results of its operations for the year then ended, in confonnity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated June 19, 1997, on our consideration ofthe Board's internal control structure and a report dated June 19, 1997, on its compliance with laws and regulations.
Our audit was conducted for the purpose of fonning an opinion on the general purpose financial statements of the City of Dalton Board of Education taken as a whole. The combining statements (Exhibits E through H) and the financial schedules (Schedules 1 through 11 which includes the Schedule of Federal Financial Assistance) are presented for purposes of additional analysis and are not a required part ofthe general purpose financial statements of the City of Dalton Board of Education. Such infonnation has been subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and, in our opinion, except for the effects of the matters referred to in the third paragraph, such infonnation is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole.
A copy of this report has been filed as a pennanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,

CLV:jy 96ARL-13

Claude L. Vickers State Auditor

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY - 1-

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 1996

EXHIBIT "A"

ASSETS

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS (Memorandum Only) JUNE 30,1996 JUNE 30, 1995

Cash and Cash Equivalents

$

107,056,13 $

919,795.50

$ 1,026,851.63 $ 1,117,242.27

Investments

$ 9,494,259.32

9,494,259,32

5,743,095.28

Accounts Receivable

1,843,080.04

755,594.40

158,507.47

2,757,181.91

2,185,697.n

Inventories Food Donated Commodities Purchased Food

33,032.03 6,198.31

33,032.03 6,198,31

25,623.01 8,239.82

Amount to be Provided in Future Years For Payment of Capital Lease Agreements

$

167,047.58

167,047.58

336,608.56

Total Assets

$ 11 ,337,339.36 $ 901,880.87 $ 1,078,302.97 $

167,047.58 $ 13,484,570.78 $ 9,416,506.71

LIABILITIES AND FUND EQUITY

LIABILITIES

Cash Overdraft

$

Accounts Payable

Salaries Payable

Notes Payable

Expired Grant Balances Payable

Retainages Payable

Capital Lease Agreements

Total Liabilities

$

FUND EQUITY

Fund Balances Reserved For Continuation of Federal Program For Inventories Food Donated Commodities Purchased Food For State Capital OuUay Projects

Unreserved

Undesignated

$

Total Fund Equity

$

291,724.84 627,621.73 $ 2,222,661.21 5,000,000.00
8,142,007,78 $
$
$ 3,195,331.58 3,195,331.58 $

120,540.86 361,807,09
60,508.24 $
542,856.19 $

42,208.43 $
42,208.43 $

1,324.75

33,032.03 6,198.31 $

1,036,094.54

40,555.09 $ 1,036,094.54

318,469.59

0.00

359,024.68 $ 1,036,094.54

Total Liabilities and Fund Equity

$ 11,337,339.36 $

901,880.87 $ 1,078,302.97 $

$
167,047.58 167,047.58 $

291,724.84 $ 748,162.59 2,584,468.30 5,000,000,00
60,508.24 42,208.43 167,047.58

26,959,14 632,717.25 2,269,712.54 3,450,000.00
25,375.08
336,608.56

8,894,119.98 $ 6,741,372.57

$

1,324.75

33,032.03 $ 6,198.31 1,036,094.54

25,623.01 8,239.82
598,361.41

$ 1,076,649,63 $ 632,224.24

3,513,801.17

2,042,909.90

$ 4,590,450.80 $ 2,675,134,14

167,047.58 $ 13,484,570.78 $ 9,416,506,71

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

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

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CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 1996

EXHIBIT"C"

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES

State Funds Federal Funds Taxes and Other Funds

$ 10,299,844.00 $ 11;605,818.70 28,244.57
16,167,083.00 17,597,444.02

Total Revenues

$ 26,466,927.00 $ 29,231,507.29

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 Other Operations of Non-Instructional Services
Capital Outlay Debt Service

$ 15,957,643,00 $ 16,461,319.29

1,237,188.00 1,156,121.00
932,542.00 336,829.00 1,455,397.00 407,108.00 3,165,384.00 1,109,367.00 426,143.00
1,000.00
220,838.00 278,400.00

1,369,015.33 1,102,959.07
854,516.76 344,534.77 1,431,225.73 394,981.35 3,134,385.89 1,039,839.81 370,953.99
557.28 9,143.94 258,554.57 242,909.93 186,325.70

Total Expenditures

$ 26,683,960.00 $ 27,201,223.41

Excess of Revenues over (under) Expenditures

$ -217,033.00 $ 2,030,283.88

OTHER FINANCING SOURCES (USES)

Other Sources Other Uses

$ -73,000.00 $ -633,719.69

Total Other Financing Sources (Uses)

$ -73,000.00 $ -633,719.69

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $ -290,033.00 $ 1,396,564.19

FUND BALANCE JULY 1, 1995

2,638,288.54

1,798,767.39

Food Inventory - Net Change in Period Donated Commodities Purchased Food

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 2,294,356.00 $ 2,809,874.58

1,535,992.64 2,490,615.74

450,378.00

439,766.38

$ 4,280,726.64 $ 5,740,256.70

$ 2,150,675.64 $ 2,948,321.81

431,630.16 236,101,56
23,412.00 257,251,00
365.28

425,504.22 691,471.12
22,333.65 364,524.54
298.19

111,597.00 19,814.00

91,813.23 4,433.65

10,806.00 1,065,775,00

3,054.13 1,203,513.80

$ 4,307,427.64 $ 5,755,268,34 $ -26,701.00 $ -15,011.64

$ 73,000.00 $ 90,663.47

$ 73,000.00 $ 90,663.47

$ 46,299.00 $ 75,651.83

457,278.63

278,005.34

7,409,02 -2,041.51

FUND BALANCE JUNE 30,1996

$ 2,348,255.54 $ 3,195,331.58

$ 503,577.63 $ 359,024.68

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

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CITY OF DALTON BOARD OF EDUCAnON - WHITFIELD COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30,1996

EXHIBIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Dalton Board of Education (Board) 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. With the exception ofthe departures from generally accepted accounting principles disclosed in these notes, the financial statements of the Board have been prepared in conformity with generally accepted accounting principles as applied to governmental units and unless otherwise disclosed in these notes, the financial statements present all of the fund types and account groups of the Board. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting standards.
The more significant of the Board's accounting policies are described below.
REPORTING ENTITY
In evaluating how to define the governmental unit for financial reporting purposes, management has considered the criteria set forth in GASB Codification of Governmental Accounting and Financial Reporting Standards, Section 2100, "Defining the Financial Reporting Entity". The primary government consists of all the organizations that compose the legal entity of the City of Dalton Board of Education.
Based upon the application of the above criteria, the City of Dalton Board of Education is determined to be the lowest level of government exercising oversight responsibility and control over all activities related to public education in Dalton, Georgia. The Board is not included in any other governmental "reporting entity" as defined by GASB Codification of Governmental Accounting and Financial Reporting Standards.
Board members were elected by the public and have decision making authority, the power to designate management, the ability to significantly influence operations, and primary accountability for fiscal matters. The Board determines its operating budget on an annual basis and it is the duty ofthe Mayor and City Council to levy a tax sufficient to raise an amount of money equal to that budget. The Board is not required to repay bonded debt incurred by the City Government on the Board's behalf.
FUND ACCOUNTING
The Board uses funds and an account group to report on its fmancial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities.
A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.

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CITY OF DALTON BOARD OF EDUCAnON - WIDTFIELD COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30,1996

EXIDBIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 of a Board's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all fmancial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.
SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are primarily received from the Georgia Department of Education and from the Federal government to accomplish specific objectives and are required to be accounted for separately.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - used to account for material capital lease obligations.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
-8-

CITY OF DALTON BOARD OF EDUCAnON - WlllTFIELD COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996

EXIDBIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be fmanced from available spendable resources, are reported in the General Long-Term Debt Account Group.
Governmental funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are property taxes, intergovernmental grants and investment income. Property taxes are considered available if they are collected and remitted by the collecting agent to the Board within 60 days after fiscal year-end.
Expenditures are generally recognized when the related fund liability is incurred.
A substantial number of personnel of the Board were employed for a one hundred and ninety day period beginning in late August of 1995 and ending in early June 1996. Employment contracts for these employment periods typically specify that compensation be paid in twelve equal monthly payments beginning in September 1995 and ending in August 1996. State grants to fund the State's share of these contracts are disbursed to the Board in the same twelve month period. In accordance with generally accepted accounting principles, salary and fringe benefit expenditures and the related revenue from the State to fund these contracts are recorded in the fiscal period covered by these financial statements.
BUDGET
The City of Dalton 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 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 Board's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting 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, 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.

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CITY OF DALTON BOARD OF EDUCAnON - WIDTFIELD COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996

EXlllBIT liD"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofdeposits (including certificates ofdeposit, savings and N.O.W. accounts) in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Board are stated at cost. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Board to invest its funds. In selecting among avenues ofinvestment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(l) 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 from State or other grantors for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
- 10-

CITY OF DALTON BOARD OF EDUCAnON - WHITFIELD COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996

EXHIBIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PROPERTY TAXES

The City ofDalton fixed the property tax levy for the 1995 tax year (calendar year) on October 20, 1995 (levy date). Taxes were due on December 20, 1995. The lien date for property taxes was January 1, 1995. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1996 since their collection meets the criteria of GASB codification section P70-1 03. The City of Dalton Clerk's office bills and collects the property taxes for the Board of Education and remits the taxes collected to the Board.

The tax millage rate levied for the 1995 tax year (calendar year) for the City of Dalton Board of Education

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

.

School Operations

7.59 mills

INVENTORIES

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

INTERFUND TRANSACTIONS

The Board has the following types of interfund transactions:

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

Operating transfers are recorded for all interfund transactions other than reimbursements.

MEMORANDUM ONLY - TOTAL COLUMNS

Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate fmancial 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.

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CITY OF DALTON BOARD OF EDUCAnON - WHITFIELD COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30,1996

EXIDBIT"D"

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 a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value ofsecurities shall be equal to not less than 110 percent ofthe public funds being secured after the deduction of the amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of anyone of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates ofindebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations ofthe counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS At June 30, 1996, the bank balances were $2,489,885.48. The amounts of the total bank balances are classified into three categories of credit risk:

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CITY OF DALTON BOARD OF EDUCAnON - WlllTFIELD COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996

EXHIBIT"D"

Note 2: DEPOSITS AND INVESTMENTS

Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the Board or by the Board's agent in the Board's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Board's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Board's name.)

The Board's deposits are classified by risk category at June 30, 1996, as follows:

Risk Category
1 2 3

Bank Balance
$ 210,628.50 2,279,256.98 0.00

Total

$2.489,885.48

CATEGORIZAnON OF INVESTMENTS At June 30, 1996, the carrying amount of the Board's total investments was $9,494,259.32 and consisted entirely of funds in the Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services which are not required to be categorized since the Board did not own any specific identifiable securities in the pooL The investment policy of the State of Georgia, Office of Treasury and Fiscal Services for the Local Government Investment Pool does not provide for investment in derivatives or similar investments.

Note 3: NON-MONETARY TRANSACTIONS

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

Note 4: RISK MANAGEMENT

The Board is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; natural disaster and unemployment compensation.

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CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30.1996

EXHIBIT"D"

Note 4: RISK MANAGEMENT

The Board has obtained commercial insurance for risk of loss associated with torts, assets, errors or omissions and job related illness or injuries to employees. The Board has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any ofthe past three years.

The Board has elected to self-insure for all losses 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 Board accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated.

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

1995 1996

Beginning of Year Liability

Claims and Changes in Estimates

$

0.00 $

1,089.00 $

$

0.00 $

430.00 $

Claims Paid

End of Year Liability

1,089.00 $

0.00

430.00 $

0.00

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The City of Dalton Board of Education has entered into various lease agreements as lessee for equipment. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception.

The changes in General Long-Ienn Debt during the fiscal year ended June 30, 1996, were as follows:

Capital Leases

Balance July 1, 1995

$ 336,608.56

Deductions Payments

169,560.98

Balance June 30, 1996

$ 167.047.58

- 14-

CITY OF DALTON BOARD OF EDUCAnON - WHITFIELD COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30,1996

EXHIBIT"D"

Note 5: GENERAL LONG-TERM DEBT

At June 30, 1996, payments due, by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30

Capital Leases

1997 1998 1999

$ 169,485.08 4,638.42 1,160.00

Total Principal and Interest

$ 175,283.50

Deduct: Imputed Interest

8,235.92

Net Present Value of Future Minimum Lease Payments

$ 167,047.58

Note 6: ON-BEHALF PAYMENTS

The Board has recognized revenues and expenditures in the amount of$619,428.11 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies.

Georgia Department of Education Paid to the State Merit System of Personnel Administration For Health Insurance of Non-Certified Personnel In the amount of $532,251.40

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of$23,500.71

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 $63,676.00

- 15 -

CITY OF DALTON BOARD OF EDUCATION - WillTFIELD COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30,1996

EXHIBIT"D"

Note 7: SIGNIFICANT COMMITMENTS

The following is an analysis of significant outstanding construction or renovation contracts executed by the Board as of June 30, 1996, together with funding available:

Project

Unearned Executed Contracts

Funding Available From State

96/95S-772-070/96-772-097

$ 1.058,663.44 $ 104,927.43

The amounts described in this note are not reflected in the general purpose financial statements.

Note 8: CONTINGENT LIABILITIES

Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The Board believes that such disallowances, if any, will be immaterial to its overall financial position.

The Board is a defendant in various legal proceedings pertaining to matters incidental to the performance of routine Board operations. The ultimate disposition of these proceedings is not presently determinable, but is not believed to be material to the general purpose financial statements.

Note 9: SUBSEQUENT EVENT

On March 18, 1997, the voters of Whitfield County voted in favor of a Special Purpose Local Option Sales Tax referendum for education purposes. The imposition of the law approved by the voters, as stated on the Official Ballot of Whitfield County, is as follows:
"Shall a one percent sales and use tax be imposed in Whitfield C~unty for a period of time not to exceed twenty calendar quarters and for the raising of not more than '" (b) $20,960,039 of which shall be received by the City of Dalton Public School System for the purposes of constructing and furnishing a new elementary school and a new middle school, parking areas and grounds, and providing furnishings, equipment and fixtures therefor, and renovating and modifYing existing schools, including the conversion of Dalton Junior High School to an intermediate school, renovation of Brookwood School, Westwood School and Dalton High School, and upgrading communications equipment and a fiber optic network?"

- 16 -

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996

EXHIBIT"D"

Note 10: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)
TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer public employee retirement system (PERS).
TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. A member is eligible for service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service and attainment of age 55, at a reduced benefit. Retirement benefits paid to members are equal to 2% of the average of the member's two consecutive highest paid years of service multiplied by the number of years of creditable service up to 40 years. The normal retirement pension is payable monthly for life. Options are available for distribution ofthe member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
Retirement benefits also include death and disability benefits. A disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The death benefit is the amount that would be payable to the member's beneficiary had the member retired on the date of death on either a service retirement allowance or a disability retirement allowance, whichever is larger. The benefit is based on the member's creditable service (minimum of 10 years of service) and compensation up to the time of disability or death.
Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting of employer contributions occurs, but the member's contributions are refunded with interest.
The Board's payroll for employees covered by TRS for the year ended June 30, 1996, was $17,060,056.11; total payroll was $19,922,965.40.
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. For fiscal year 1996 that rate for employer contributions was 11.81 %. The interest rate assumption (rate of return on investments) was 7.50%.
Total contributions made during fiscal year 1996 amounted to $2,867,795.46, of which $2,014,792.67 was made by the Board and $853,002.79 was made by employees. These contributions represented 11.81% (Board) and 5% (employees) of covered payroll.

- 17 -

CITY OF DALTON BOARD OF EDUCATION - WIDTFIELD COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30,1996

EXIDBIT"D"

Note 10: RETIREMENT PLANS

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

Total unfunded pension benefit obligation ofTRS as of June 30, 1995, was as follows:

Total pension benefit obligation

$17,442,607,000.00

Net assets available for benefits, at cost

15,857,066,000.00

Unfunded pension benefit obligation

$ 1.585,541.000.00

The measurement ofthe total pension benefit obligation is based on an actuarial valuation as of June 30, 1995. Net assets available to pay pension benefits were valued as of the same date. TRS does not make separate measurements of assets and pension benefit obligation for individual employers.

Total contributions from all employers to TRS for fiscal year ended June 30, 1996 were $607,275,000.00. The Board's contribution for the year ended June 30, 1996 of $2,014,792.67 was actuarially determined and represented .3317% of total contributions made by all participating employers.

Ten year historical trend information is presented in the 1996 TRS Component Unit Financial Report. This information is useful in assessing TRS's accumulation of sufficient assets to pay pension benefits as they become due.

PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA (PSERS)

PSERS PLAN DESCRIPTION Substantially all bus drivers, maintenance, custodial, and lunchroom personnel employed by local school systems are covered by the Public School Employees Retirement System of Georgia (PSERS). All employer's contributions are made by the State of Georgia in accordance with State statute.

- 18 -

CITY OF DALTON BOARD OF EDUCAnON - WHITFIELD COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30,1996

EXHIBIT"D"

Note 10: RETIREMENT PLANS
PSERS provides, in accordance with State statute, service retirement, disability retirement and survivors benefits for its members. A member is eligible for normal service retirement after 10 years of service and attainment of age 65. A member applying for service retirement with 10 years of service and retires between the ages of 60 and 65 receives a reduced benefit. Monthly retirement benefits paid to members are equal to $8.00 per month multiplied by the number ofyears of creditable service. Options are available for distribution of the member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
Retirement provisions include death and disability benefits. Disability benefits are the same as if the employee had retired at age 65 as long as the employee has 15 or more years of creditable service. Death benefits are dependent upon the number of years of service. If there are less than ten years of service, a lump sum refund of the employee's contributions and interest are made to the beneficiary. If there are more than ten years of service, the beneficiary shall receive for life half of what the employee would have received upon retirement.
Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting of employer contributions occurs, but the member's contributions are refunded with interest.
There were 147 employees covered under PSERS for the year ended June 30, 1996.
PSERS CONTRIBUTIONS REQUIRED AND MADE Covered employees are required by State statute to contribute $4.00 a month for the nine month school year. Unlike TRS, the Board makes no contribution to PSERS. The State of Georgia is required by statute to make employer contributions actuarially determined and approved and certified by the PSERS' Board of Trustees. Total contributions from employees of the Board made during fiscal year 1996 amounted to $4,724.00. Total contribution for all school systems made by the State of Georgia to PSERS for fiscal year ended June 30,1996, was $9,817,769.80.
Note 11: SURETY BONDS
Mr. Frank Thomason, School Superintendent through June 30, 1996, was bonded in the amount of$25,000.00 with the United Pacific Insurance Company, Philadelphia, Pennsylvania, their Bond No. U 6174620.
The School Superintendent, Dr. William H. Bice, effective July 1, 1996, is bonded in the amount of $100,000.00 with the United Pacific Insurance Company, Philadelphia, Pennsylvania, their Bond No. U 6081584, on which premium is paid through June 30, 1998.
Additionally, the Superintendent and certain other employees of the City of Dalton Board of Education are bonded under a Public Employees Bond written by United Pacific Insurance Company, Philadelphia, Pennsylvania, their Bond No. U 6010303, on which premium was paid to April 7, 1997. Under this agreement, the Public Employee Dishonesty Coverage insures the Board to a maximum of $25,000.00 against loss sustained through fraudulent or dishonest acts by employees.
- 19 -

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30 1996

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

SCHOOL FOOD
SERVICES FUND

DALTON VOCATIONAL SCHOOL OF
HEALTH OCCUPATIONS
FUND

INNOVATIVE PROGRAM CENTER

STATE PRESCHOOL HANDICAPPED
PROGRAM

SEVERELY EMOTIONALLY
DISTURBED

$

277,003.96 $

91,397.44

$

10,252.80 $

53,575.94

5,271.97

38,301.27 $

119,314.87

135,296.50

33,032.03 6,198.31

Total Assets

$

321,506.27 $

129,698.71 $ 119,314.87 $

10,252.80 $

188,872.44

LIABILITIES AND FUND EQUITY

LIABILITIES

Cash Overdraft

Accounts Payable

$

Salaries Payable

Expired Grant Balances Payable

Total Liabilities

$

FUND EQUITY

Fund Balances

Reserved

For Continuation of Federal Program

$

For Inventories

Food

Donated Commodities

Purchased Food

$ Unreserved
Undesignated

Total Fund Equity

$

29,586.50 66,365.26
95,951.76

$

105,446.92

2,854.70 $

10,179.67

833.58

$

119,314.87 $

2,482.18 $ 7,770.62

43,162.96 143,295.76

10,252.80 $

186,458.72

1,324.75
33,032.03 6,198.31
40,555.09 184,999.42 $ 225,554.51 $

129,698.71 $ 129,698.71 $

0.00 $ 0.00 $

0.00 $ 0.00 $

2,413.72 2,413.72

Total Liabilities and Fund Equity

$

321,506.27 $

129,698.71 $

119,314.87 $

10,252.80 $

188,872.44

See notes to the general purpose financial statements.

- 20-

EXHIBIT"E" Page 1

LOTTERY PROGRAMS

EDUCATION OF CHILDREN WITH
DISABILITIES

GRANTS TO LOCAL
EDUCATIONAL AGENCIES

ELEMENTARY AND SECONDARY EDUCATION ACT

TITLE I

PROGRAM FOR

STATE

NEGLECTED

SCHOOL

AND DELINQUENT IMPROVEMENT MIGRANT

CHILDREN

GRANTS

PROGRAM

TITLE II EISENHOWER PROFESSIONAL DEVELOPMENT

TITLE VI INNOVATIVE EDUCATION PROGRAM STRATEGIES

$

0.00 $

2,106.32

$

0.00 $

578.35

$ 232,714.76 $

1,908.00 $ 170,755.38

$

23,214.17

$ 232,714.76 $

1,908.00 $ 170,755.38 $

0.00 $ ==..;2;;,:.,.;,;10;,;;;6;,;;.3;;;.,2 $

23,214.17 $

0.00 $===5;;,;7,.;;8;,;;.3.;,.5

$ 149,394.12 $ 19,348.22 63,716.72 255.70
$ 232,714.76 $

1,908.00 $

116,958.60 12,640.58 41,156.20

1,908.00 $ 170,755.38

$

8,371.25

3,881.66

10,961.26

$

2,106.32

$

2,106.32 $

23,214.17

$

578.35

$

578.35

$

0.00 $

$

0.00 $

----=.o;..:.o.=...o $ ----=.0;..:.0.=...0 $

----=.O.;.;:.O~O $ ----=.O;.;:..O~O $

----=.O;.;:..O~O $ ----=.O;..:.O~O $

0.00 $ ----=.O;..:.O~O $

..;;.;0.;.;:.00~$ ..;;.;O.:.::.OO~$

..;;.;0.;.;:.00~$ ..;;.;O.:.::.OO~$

..;;.;0.;.;:.0~0 .::.O.:.::.O~O

$ 232,714.76 $====1;o;,9~0;,;;;8;,;;'0;;;.0$

170,755.38 $====..,.;.0;,;;.0.;,.0 $

2,106.32 $

23,214.17 $====,;;0.;,;;,0;;,,0 $==..;5;.;,7,;;,8.;,;;;3;;,,5

- 21 -

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 1996

Cash and Cash Equivalents Accounts Receivable Inventories
Food Donated Commodities Purchased Food
Total Assets

GOALS 2000
STATE AND LOCAL
EDUCATION SYSTEMIC IMPROVEMENT GRANTS

EDUCATION FOR HOMELESS CHILDREN AND YOUTH

INDIVIDUALS WITH

DISABILITIES EDUCATION ACT

PARTB

SPECIAL EDUCATION

FLOW

THROUGH

PRESCHOOL

$

5,470.82 $

67,371,42

$

4,934.92

$

23,882.56

$

4,934.92 $ ~==5;;;:,,4;:.:7~0~.8~2

67,371.42 $ =~2;;;3-.;;,8;;;8~2.;;;56;;.

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

$

4,934.92

$

$

4,934.92 $

1,278.46 $ 4,192.36
5,470.82 $

$ 3,165.62 7,558.74 56,647.06
67,371.42 $

23,882.56 23,882.56

$

0.00 $

$

0.00 $

$

4,934.92 $

0.00 $ 0.00 $

0.00 $ 0.00 $

---"-O;.;;.O-=..O ---"-O:;:.O-=..O

5,470.82 $

67,371.42 $ ===::2;;,;3;0,;,8;;,;;8;;;;2;,;;.5;;;,6

See notes to the general purpose financial statements.

- 22-

EXHIBIT"E" Page 2

SAFE AND DRUG-FREE SCHOOLS

VOCATIONAL EDUCATION
FEDERAL

JOB TRAINING PARTNERSHIP
ACT

TOTALS JUNE 30, 1996 JUNE 30, 1995

$

10,195.45 $

0.00 $

0.00 $

517,952.50 $

314,452.71

755,594.40

614,010.56

33,032.03 6,198.31

25,623.01 8,239.82

$

10,195.45 $

0.00 $

0.00 $ 1,312,777.24 $

962,326.10

$

2,139.98

6,610.50

87.23

$

8,837.71

$

410,896.37 $

120,540.86

361,807.09

60,508.24

$

953,752.56 $

341,411.85 69,301.16
258,054.71 15,553.04
684,320.76

$

1,357.74 $

$

1,357.74 $

$

10,195.45 $

0.00 $ 0.00 $
0.00 $

$

1,324.75

$ 0.00 0.00 $

33,032.03 $ 6,198.31
40,555.09 $
318,469.59 359,024.68 $

25,623.01 8,239.82
33,862.83 244,142.51 278,005.34

0.00 $ 1,312,777.24 $

962,326.10

- 23-

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 1996

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

SCHOOL FOOD
SERVICES FUND

DALTON VOCATIONAL SCHOOL OF
HEALTH OCCUPATIONS
FUND

INNOVATIVE PROGRAM
CENTER

STATE PRESCHOOL HANDICAPPED
PROGRAM

SEVERELY EMOTIONALLY
DISTURBED

$ 81,870,00 $ 754,281,40 382,795,60
$ 1,218,947.00 $

494,610,00 $ 77,743,04 53,531,58
625,884.62 $

4,166,42 $ 622,746,21
626,912.63 $

50,428,00 $

1,270,092,00 158,950,48 559,20

50,428.00 $ 1,429,601.68

$ 441,360,57 $

5,235.63 $

124,257.28 2,970,00

507,444.49 115,301.72

$ 1,201,289.90 $ 1,201,289.90 $ $ 17,657.10 $

568,587.85 $ 57,296.77 $

627,981.84 $ -1,069.21 $

50,428.00 $

992,430.17 213,627.32
2,573.90 185,158.85
35,576.83

50,428.00 $ 1,429,367.07

0.00 $

234.61

$ 17,657.10 $ 202,529.90

57,296.77 $ 72,401.94

7,409.02 -2,041.51

1,069.21
0.00 $ 0.00

0.00 $ 0.00

234.61 2,179.11

$ 225,554.51 $ 129,698.71 $

0.00 $

0.00 $

2,413.72

See notes to the general purpose financial statements.

-24 -

EXHIBIT "F" Page 1

LOTTERY PROGRAMS

EDUCATION OF CHILDREN WITH
DISABILITIES

GRANTS TO LOCAL
EDUCATIONAL AGENCIES

ELEMENTARY AND SECONDARY EDUCATION ACT

TITLE I

PROGRAM FOR

STATE

NEGLECTED

SCHOOL

AND DELINQUENT IMPROVEMENT MIGRANT

CHILDREN

GRANTS

PROGRAM

TITLE II EISENHOWER PROFESSIONAL DEVELOPMENT

TITLE VI INNOVATIVE EDUCATION PROGRAM STRATEGIES

$ 908,708.16 $
$ 908,708.16 $

1,908.00 $ 383,839.19 $ 1,908.00 $ 383,839.19 $

1,871.00 $ 1,871.00 $

12,883.68 $ 107,732.51 $ 12,883.68 $ 107,732.51 $

14,023.70 $

22,333.65

14,023.70 $

22,333.65

$ 847,408.39 $ 83,380.48 2,659.22 5,223.13
56,236.40
281.88 2,223.90
$ 997,413.40 $
$ -88,705.24 $

88,705.24

$

0.00 $

0.00

1,908.00 $ 309,786.88 $

15,929.46
53,926.26 298.19
1,126.15 2,772.25

1,908.00 $ 0.00 $

383,839.19 $ 0.00 $

0.00 $ 0.00

0.00 $ 0.00

1,871.00 $

$ 107,762.51

12,883.68

$

13,993.82 $
29.88

22,333.65

1,871.00 $ 0.00 $

12,883.68 $ 107,762.51 $

0.00 $

-30.00 $

14,023.70 $ 0.00 $

22,333.65 0.00

0.00 $ 0.00

0.00 $ 0.00

30.00
0.00 $ 0.00

0.00 $

0.00

0.00

0.00

$

0.00 $

0.00 $===.;;:0,;.;;.0,;;;.,0 $

0.00 $

0.00 $==.,;;0;;,;;.0,;;;.,0 $

0.00 $ ===.;;:0,;.;;.0,;;;.,0

- 25-

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND JUNE 30, 1996

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

GOALS 2000
STATE AND LOCAL
EDUCATION SYSTEMIC IMPROVEMENT GRANTS

EDUCATION FOR HOMELESS CHILDREN AND YOUTH

INDIVIDUALS WITH

DISABILITIES EDUCATION ACT

PARTB

SPECIAL EDUCATION

FLOW

THROUGH

PRESCHOOL

$

4,934,92 $

$

4,934,92 $

36,141.78 $

111,072.94 $

23,882,56

36,141.78$

111,072.94 $ _----:2::::3:i..:,8:.::8:::2:.::.5~6

$

$

4,934,92

$ 36,886.43
114.37

91,423,24 $
9,169,30 5,803.60
1,369,30

20,448,61
2,443,20 990,75

3,307,50

$

4,934,92 $ _ _~3=7,= 00= 0,8- 0 $

111,072,94 $

23,882,56

$

0.00 $

-859,02 $

0,00 $

0,00

$

0,00 $

0,00

859,02
0.00 $ 0.00

0.00 $

0.00

0.00

0.00

$

0.00 $====~O;,;;'O,;;"O$ =====0';';;'0=0 $ ===...;;.0';.;;;0,;.0

See notes to the general purpose financial statements.

- 26-

EXHIBIT"F" Page 2

SAFE AND DRUG-FREE SCHOOLS

VOCATIONAL EDUCATION
FEDERAL

JOB TRAINING PARTNERSHIP
ACT

TOTALS YEAR ENDED JUNE 30.1996 JUNE 30, 1995

$ 64,628.77 $ 2,880.00
$ 67,508.77 $

78,420.00 $ 78,420.00 $

$ 13,221.91
13,221.91 $

2,809,874.58 $ 2,490,615.74
439.766.38
5,740.256.70 $

2,357,466.39 2,337,493.20
429,053.19
5,124,012.78

$ $ 66,775.58

78,258.81 $

269.84

161.19

$ 67.045.42 $ 78,420.00 $

$

463.35 $

0.00 $

$ 13,221.91
13,221.91 $ 0.00 $

2,948.321.81 $ 2,245,863.65

425.504.22 691,471.12
22,333.65 364,524.54
298.19 91,813.23 4,433.65
3,054.13 1,203,513.80

530,586.95 534,805.09 160,458.00 428,453.85
2,233.67 120,282.70
3,307.50 1,424.10 1,102,542.75

5,755,268.34 $ 5,129,958.26

-15,011.64 $

-5,945.48

$

463.35 $

894.39

0.00 $ 0.00

90,663.47

34,806.85

0.00 $ 0.00

75,651.83 $ 278,005.34

28,861.37 248,195.89

7,409.02 -2,041.51

-78.44 1,026.52

$

1,357.74 $

0.00 $

0.00 $

359,024.68 $ 278,005.34

- 27-

CITY OF DALTON BOARD OF EDUCAnON - WHITFIELD COUNTY COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 1996

EXHIBIT"G"

ASSETS Cash and Cash Equivalents Accounts Receivable

REGULAR

GEORGIA STATE FINANCING

AND INVESTMENT COMMISSION

PROJECT

PROJECT

93/925-772-105

96-772-097

LOITERY PROJECT 96/955-772-070

TOTALS JUNE 30,1996 JUNE 30, 1995

$

0,00 $

944,00 $

489,175,51 $

429,675,99 $

919,795,50 $

598,361,41

158,507,47

158,507,47

Tolal Assets

$

0.00 $

944.00 $

647,682.98 $

429,675,99 $ 1,078,302.97 $

598,361,41

LIABILITIES AND FUND EQUITY

LIABILITIES

Relainages Payable

FUND EQUITY

Fund Balances

Reserved

For Slate Capital Outlay Projects

Unreserved

Undesignated

$

Tolal Fund EqUity

$

Total Liabilities and Fund Equity $

$ 0.00 0.00 $
0,00 $

$

42,208.43

$

42,208.43

944,00 $ 0,00
944,00 $

605,474,55 $ 0.00
605,474.55 $

429,675.99 $ 1,036,094.54 $

0.00

0.00

429,675.99 $ 1,036,094,54 $

598,361.41 0.00
598,361.41

944.00 $

647,682.98 $

429,675.99 $ 1,078,302.97 $

598,361.41

See notes to the general purpose financial statements.

- 28-

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30,1996

EXHIBIT"H"

See notes to the general purpose financial statements.

- 29-

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE YEAR ENDED JUNE 30, 1996

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U. S. Department of Direct Summer Food Service Program for Children Through Georgia Department of Education Food and Nutrition Program Child and Adult Care Food Program 1996 Contract Food Services School Breakfast Program 1996 Grant National School Lunch Program 1996 Grant Food Distribution Program (1)
Total U. S. Department of AgriCUlture
Corporation for National and Community Service Through Georgia Department of Education Learn and Serve America School and Community Based Programs 1996 Grant
Education, U. S. Department of Direct Federal Pell Grant Program 1996 Grant Through Georgia Department of Education Elementary and Secondary Education Act Title I Education of Children with Disabilities in State Operated or Supported Schools 1995 Carry-Over Grants to Local Educational Agencies 1995 Summer 1996 Grant Program for Neglected and Delinquent Children 1996 Grant State School Improvement Grants 1996 Grant Title II Eisenhower Professional Development 1995 Regular 1996 Grant Title VI Innovative Education Program Strategies 1996 Grant Goals 2000 State and Local Education Systemic Improvement Grants 1996 Grant Individuals with Disabilities Education Act Part B - Special Education Flow Through 1996 Grant Preschool 1996 Grant Severely Emotionally Disturbed 1996 Grant Safe and Drug-Free Schools 1996 Grant
- 30 -

CFDA NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

10.559 $

10,467.00 $

7,378.43 (3)

10.558

5,531.74

(2)

10.553
* 10.555 10.550
$

115,227.75
537,975.87 85,079.04
754,281.40 $

(2)
1,108,832.43 (3) 85,079.04
1,201,289.90

94.004 $

8,352.00 $

8=,3=5=2.;.;:;.0.;:;..0

84.063 $

26,144.00 $

26,144.00

84.009 * 84.010 * 84.010
84.013 84.218
84.281 84.281
* 84.298
84.276

1,908.00 7,954.81 375,884.38 1,871.00 12,883.68
1,488.70 60,962.68
532,483.70
55,816.48

1,908.00 7,954.81 375,884.38 1,871.00 12,883.68
1,488.70 60,962.68
532,483.70
55,816.48

84.027 84.173 84.027 84.186

111,072.94 23,882.56
131,198.48 64,628.77

111,072.94 23,882.56 131,198.48 64,628.77

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE YEAR ENDED JUNE 30.1996

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Education, U. S. Department of Through Georgia Department of Education Vocational Education - Basic Grants to States High School Program Basic Grant 1996 Grant Tech-Prep Education 1996 Grant Stewart B. McKinney Homeless Assistance Act Education for Homeless Children and Youth 1996 Grant Through Gilmer County Board of Education Goals 2000 State and Local Education Systemic Improvement Grants 1996 Grant Through Georgia Department of Technical and Adult Education Vocational Education Basic Grants to States Single Parent 1996 Grant Through Hall County Board of Education d/b/a Piedmont Migrant Education Agency Elementary and Secondary Education Act Title I Migrant Education 1995 Summer 1996 Grant 1996 Summer
Total U. S. Department of Education
Labor, U. S. Department of Through North Georgia Regional Development Center Job Training Partnership Act 95040101 95060101 95060110 95060112
Total U. S. Department of Labor

CFDA NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

84.048 $ 84.243

68,420.00 $ 10,000.00

84.196

36,141.78

68,420.00 10,000.00
37,800.80 (3)

84.276

4,934.92

4,934.92

84.048

41,000.00

41,000.00

84.011 84.011 84.011

10,351.53 89,000.15
8,380.83

$ 1,676,409.39 $

10,351.53 89,000.15
8,410.83 (3)
1,678,098.41

17.250 $ 17.250 17.250 17.250
$

13,221.91 $ 10,599.04 27,752.00 28,244.57
79,817.52 $

13,221.91 10,599.04 27,752.00 28,244.57
79,817.52

Total Federal Financial Assistance

$ 2,518,860.31 $ 2,967,557.83

Major Programs are identified by an asterisk (*) in front of the CFDA number.

(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the current fiscal year.
(2) Expenditures for the School Breakfast Program and the Child and Adult Care Food Program were not maintained separately and are included in the 1996 National School Lunch Program.
(3) Expenditures for this program include State and/or Other Funds. Expenditures are not maintained by fund source.

See notes to the general purpose financial statements.

- 31 -

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY CASH AND CASH EQUIVALENTS JUNE 30,1996

SCHEDULE "2"

NONINTEREST BEARING ACCOUNTS
First Union National Bank of Georgia, Dalton, Georgia
Hardwick Bank and Trust Company, Dalton, Georgia
INTEREST BEARING ACCOUNTS
First Union National Bank of Georgia, Dalton, Georgia
Certificate of Deposit No. 8799134 (4.69%) N.O.W. Account (1.239%) Savings Account (1.98%)
Nations Bank of Georgia, Dalton, Georgia
N.O.W. Account (Variable)

$

6,010.39

55.50

$

6,065.89

$

7,000.00

226,648.75

50,355.21

284,003.96

445,056.94

$ 735,126.79

See notes to the general purpose financial statements. - 32 -

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY INVESTMENTS JUNE 30, 1996

SCHEDULE "3"

INVESTMENT POOL
State of Georgia, Office of Treasury and Fiscal Services Local Government Investment Pool (5.361%)

$ 9,494,259.32

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

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY ACCOUNTS RECEIVABLE JUNE 30, 1996

SCHEDULE "4"

Dalton Education Foundation, Incorporated
Education, Georgia Department of Quality Basic Education Deferred Summer Salaries - FY96 Food Services National School Lunch Program Other State Programs Alternative Programs Remedial Summer School Program Lottery Program Alternative School Program Federal Programs ESEA - Title I Education of Children with Disabilities in State Operated or Supported Schools Grants to Local Educational Agencies ESEA - Title II Eisenhower Professional Development ESEA - Title VI Innovative Education Program Strategies Goals 2000 Individuals with Disabilities Education Act Part B - Special Education Preschool Severely Emotionally Disturbed Learn and Serve America
Georgia State Financing and Investment Commission Reimbursement on Construction Projects
Gilmer County Board of Education Goals 2000
Hall County Board of Education d/b/a Piedmont Migrant Education Agency Migrant Education
Human Resources, Georgia Department of Family Connection
North Georgia Regional Development Center Job Training Partnership Act
Office of School Readiness Pre-Kindergarten Program
Technical and Adult Education, Georgia Department of Adult Education - State Vocational Education - Federal
Various Sources Salary Overpayment Interest Earned

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

$

23,344.88

$

TOTAL 23,344,88

1,701,631.00 $
4,156.27

5,271.97 97,245.00
88,738.86

1,701,631.00 5,271.97
97,245.00 4,156.27
88,738.86

1,908.00 170,755.38
34,699.69 70,446.70
5,816.48
23,882.56 131,198.48
8,352.00
$
4,934.92

158,507.47

1,908.00 170,755.38
34,699.69 70,446.70
5.816.48
23,882.56 131,198.48
8,352.00
158,507.47
4,934.92

67,530.21

23,214.17
6,010.29 45,462.00

23,214.17 67,530.21
6,010.29 45,462.00

46,417.68

32,802.00 3,587.00
1,268.90

32,802.00 3,587.00
1,268.90 46,417.68

$

1,843,080.04 $

755,594.40 $

158,507.47 $ ===2;;,;7',,;;5;,;.701,,;';;,81,;,;.;;91~

See notes to the general purpose financial statements.

- 34 -

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 1996

SCHEDULE "5"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Quality Basic Education General and Career Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Technology Training Limited English Speaking Middle School Incentive Program Special Instructional Assistance In-School Suspension Counselors Grades 4 and 5 Midterm Adjustment Local Fair Share Deferred Summer Salaries -FY95 Deferred Summer Salaries -FY96 Food Services Vocational Education Other State Programs Alternative Programs Apprenticeship Program At-Risk Summer School Program Health Insurance Innovative Programs Mentor Teacher Program Preschool Handicapped Program Remedial Summer School Program Severely Emotionally Disturbed Teachers' Retirement Lottery Programs Alternative School Program Exceptional Growth - Capital Outlay Instructional Technology Model Technology Schools Pre-Kindergarten Program Safe Schools Grant Technology Installation
Georgia State Financing and Investment Commission Reimbursement on Construction Projects
Georgia Student Finance Commission Tuition
Human Resources, Georgia Department of Family Connection
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$ 8,203,891.00 1,677,611.00 273,505.00 361,961.00 108,273.00 2,304,241.00
215,788.00 61,463.00 77,295.00
494,724.00 180,626.00 135,806.00 122,396.00
22,927,00 362,151.00 -3,957,617.00 -1,548,442.00 1,701,631.00
$ 1,844.00
60,179.55 14,437.45 532,251.40
15,210.00
6,366.56
23,500.71

81,870.00
97,245.00
4,166.42 50,428,00 1,270,092.00
88,738.86 $
119,744.30 6,789.00
350,455.79 19,732,00 79,845.00

$ 8,203,891.00 1,677,611.00 273,505.00 361,961,00 108,273.00 2,304,241.00

215,788,00 61,463.00 77,295.00
494,724.00 180,626.00 135,806.00 122,396.00
22,927.00 362,151.00 -3,957,617.00 -1,548,442.00 1,701,631.00
81,870.00 1,844.00

97,245.00 60,179.55 14,437.45 532,251.40
4,166.42 15,210.00 50,428.00
6,366.56 1,270,092.00
23,500.71

143,251.00

88,738.86 143,251.00 119,744.30
6,789.00 350,455.79
19,732.00 79,845.00

80,123.03
63,676.00 - 35 -

101,041.00 146,158.21

278,272.57

278,272.57 101,041,00
80,123.03 146,158.21
63,676,00

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30,1996

SCHEDULE "5"

AGENCY/FUNDING
GRANTS Technical and Adult Education, Georgia Department of Adult Education
CONTRACT Education, Georgia Department of Assemble a System Leadership Team to Participate in Year Three of a Three Year Leadership Development Program

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$

393,569,00

$

393,569,00

$ _ _..1:..:0:.c,0::,::0:.::;0.:.::.0.:..0

10,000.00

$ 11,605,818.70 $ 2,809,874.58 $

421,523,57 $ 14,837,216.85

See notes to the general purpose financial statements.

- 36 -

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY SCHEDULE OF TAXES AND OTHER REVENUE YEAR ENDED JUNE 30,1996

SCHEDULE "6"

Taxes City Wide School Tax
Other Sources Compensation for Loss of Assets Donations Dalton Education Foundation. Incorporated Other Indirect Cost Special Revenue Fund Interest Earned Sales Adult Meals Contracted Meals Lunches and Breakfast Supplemental School Assets Other Supply Fees Tuition Other

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 16.667.224.21

$ 16,667.224,21

3.181,14 23.344,88 67,443.25 $ 19,929.45 359.626,38
10,957.43 40,886,21 385,775,02 19,076,05

2,880,00
4,473,13
52,777.01 6,684,00
277,626.78 41,234,68
33,697,05 11,724,00
8,669,73

3,181,14
23.344.88 70.323.25
19,929.45 364.099,51
52,777,01 6.684,00
277,626.78 41,234,68 10.957.43 40,886.21 33,697,05
397,499,02 27,745,78

$ 17,597,444,02 $

439,766,38 $ 18,037.210.40

See notes to the general purpose financial statements, - 37 -

THIS PAGE LEFT BLANK

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY SCHEDULE OF EXPENDITURES BY OBJECT GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 1996

SCHEDULE "7"

EXPENDITURES
Operating Costs Salaries Employee Benefits Travel of Employees Professional and Technical Services Travel of Board Members Water, Sewer and Cleaning Services Repair and Maintenance Services Rents Insurance Communications Tuition Commodity Hauling Other Purchased Services Supplies Energy Food Usage Books, Textbooks and Periodicals Dues and Fees Interest Expense Federal Indirect Costs Other Expenditures
Nonoperating Costs Principal and Interest Building and Building Improvements Equipment
Total Expenditures

GENERAL FUND

SPECIAL REVENUE
FUND

TOTAL

$ 17,099,793.00 $ 5,469,303.32 84,522.05 191,433.32 2,943.73 48,782.11 243,815.21 23,603.15 76,145.00 156,618.61 163,028.00
821,139.44 1,006,796.26
417,879.37 9,143.94
313,267.38 23,989.90 87,354.00
154,928.42

2,823,172.40 $ 872,058.39 54,627.42 448,758.29
253.18 6,258.97 38,383.47 6,402.00 22,366.26 34,806.61 5,581.68 132,406.89 253,737.90 14,283.52 523,603.22 48,193.39 3,668.00
19,929.45 67,381.00

19,922,965.40 6,341,361.71 139,149.47 640,191.61 2,943.73 49,035.29 250,074.18 61,986.62 82,547.00 178,984.87 197,834.61 5,581.68 953,546.33 1,260,534.16 432,162.89 532,747.16 361,460.77 27,657.90 87,354.00 19,929.45 222,309.42

186,325.70 234,734.55 385,676.95

379,396.30

186,325.70 234,734.55 765,073.25

$ 27,201,223.41 $

5,755,268.34 $ 32,956,491.75

See notes to the general purpose financial statements. - 39 -

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY SCHEDULE OF EXPENDITURES BY OBJECT LOTTERY PROGRAMS YEAR ENDED JUNE 30, 1996

Total Expenditures

$

185,983.86 $

285,564.71 $ ===1=1=9~,7.4..4=,=30=

(1) Alternative School Program includes $97,245,00 in non-lottery State Funds.

See notes to the general purpose financial statements, - 40 -

SCHEDULE "8"

MODEL TECHNOLOGY
SCHOOLS

PRE-KINDERGARTEN PROGRAM

SAFE SCHOOLS
GRANT

TECHNOLOGY INSTALLATION

TOTAL

$

$

6::..!"7.:....;:8;.::9..:..::.0~0

$

6,789.00 $

382,874.81 114,899.85
3,634.23 770.00
36,000.00
281.88 34,550.28
2,223.90 52.95
409.00 850.10

8,267.84 $

20,236.40 $

$

412,629.05

121,724.36

5,607.61

3,229.01

36,000.00

411.09

712.48

84,961.89

2,223.90

1,351.45

409.00

4,959.51

79,845.00

285,564.71 323,194.05

584,814.84 $

20,236.40 $

79,845.00 $ 1,282,978.11

- 41 -

THIS PAGE LEFT BLAHK

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 1996

SCHEDULE "9"

Minimum Expenditure Requirements (Total Allotment)
Expenditures on Combined Program Basis Salaries (1) (2) Operations
Less: Expenditures for Media Center Programs in Excess of Total Media Allotment
Expenditures per Audit

THIRTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF THIRTEEN WEIGHTED PROGRAMS

$ 10,879,119.00 $

2; ;.;9;. . ;1-'""',8;.;:;.8. ;.:1.-"-00; ;,.

$ 14,106,605.68 924,862.39 $ _ _-:.7..::.94...:..l,.:::.;57~6.:..:.4=3
$ 15,031,468.07

-454,981.36 $ 14,576,486.71

Amount of Underexpenditure for Total Allotment

$

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

Note: (1) Salary accruals (July and August 1996 Deferred Salaries) reported as expenditures in the General Purpose Financial Statements are not included on this analysis in order to comply with program guidelines.
(2) Salary accruals (July and August 1995 Deferred Salaries) reported as expenditures in the prior year General Purpose Financial Statements are included on this analysis as required by program guidelines.

See"notes to the general purpose financial statements. - 43 -

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM
GENERAL FUND QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 1996

GENERAL AND CAREER EDUCATION PROGRAMS Kindergarten (*) Grades 1 - 3 (*) Sub-Total - K-3 Grades 4 5 (*) Grades 6 8 (*) Grades 9 - 12 (*) High School Laboratories (*) Vocational Education Laboratories (*) Total General and Career Education Programs
SPECIAL EDUCATION PROGRAMS Regular Programs Category I (*) Category II (*) Category III (*) Category IV (*) Sub-Total - Regular Category V (Gifted) (*) Total Special Education Programs
REMEDIAL EDUCATION PROGRAM (*) Total Thirteen Weighted Programs
MEDIA CENTER PROGRAMS Salaries Operations Total Media Center Programs
Total Thirteen Weighted and Media Center Programs
STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development
Total Staff Development Programs (*) Identifies Thirteen Weighted Programs. (1) Salary accruals (JUly and August 1996 Deferred
Salaries) reported as expenditures in the General Purpose Financial Statements are not included on this analysis in order to comply with program guidelines.

ALLOTMENTS FROM DEPARTMENT OF EDUCATION

REQUIRED

ORIGINAL

%

ORIGINAL

MID-TERM

$

974,334.00

$

876,900.60 $

2,314,454.00

2,083.008.60

$ 3,288,788.00 90 $ 2,959,909.20 $

1,106,618.00 90

995,956.20

1,684,508.00 90

1,516,057.20

963,453.00 90

867,107.70

788,958.00 90

710,062.20

371,566.00 90

334,409.40

$ 8,203,891.00

$ 7,383,501.90 $

0.00 0.00 362,151.00
362,151.00

$ 1,041,532.00

$

937,378.80 $

0.00

$ 1,041,532.00

636.079.00

$ 1,677.611.00

$

273,505.00

$ 10,155.007.00

90 $ 90
$ 90 $
$

937,378.80 $ 572,471.10 1.509,849.90 $ 246,154.50 $ 9.139.506.30 $

0.00 0.00 0.00 0.00 362,151.00

$

294,823.00 90 $

265,340.70 $

67,138.00 90

60,424.20

$

361,961.00

$

325,764.90 $

0.00 0.00

$ 10,516,968.00

$ 9,465.271.20 $

362,151.00

$

26,712.00

81,561.00

$

26,712.00 $

81,561.00

$

108,273.00 100 $

108.273.00 $

(2) Salary accruals (JUly and August 1995 Deferred Salaries) reported as expenditures in the prior year General Purpose Financial Statements are included on this analysis as required by program gUidelines.

0.00 0.00
0.00

See notes to the general purpose financial statements.

- 44 -

SCHEDULE "10"

. TOTAL REQUIRED

ACTUAL EXPENDITURES

SALARIES (1)(2)

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$

876,900.60 $ 1,240,522.08 $

65,605.53 $ 1,306,127.61

2,083,008.60

2,936,925.67

122,709.84

3,059,635.51

$ 2,959,909.20 $ 4,177,447.75 $

188,315.37 $ 4,365,763.12 $

0.00

995,956.20

1,493,837.70

78,230.44

1,572,068.14

0.00

1,878,208.20

2,459,566.39

154.186.32

2,613,752.71

0.00

867,107.70

958,156.93

101,295.31

1,059,452.24

0.00

710,062.20

927,452.90

77,897.00

1,005,349.90

0.00

334,409.40

637,149.03

123,645.83

760,794.86

0.00

$ 7,745,652.90 $ 10,653,610.70 $

723.570.27 $ 11,377,180.97

$

937,378.80

$

81,492.24 $

288,461.91

1,174,816.13

61.771.10

2,570.94 $ 319.76
39,180.79 6,929.11

84,063.18 288,781.67 1,213,996.92
68,700.21

$

937,378.80 $ 1,606,541 .38 $

49,000.60 $ 1,655,541.98

0.00

572,471.10

701,222.93

5,681.43

706,904.36

0.00

$ 1,509,849.90 $ 2,307,764.31 $

54,682.03 $ 2,362,446.34

$

246,154.50 $

458,574.27 $

16.324.13 $

474,898.40

0.00

$ 9,501,657.30 $ 13,419,949.28 $

794,576.43 $ 14,214,525.71

$

265,340.70 $

686,656.40

$

686,656.40

0.00

60,424.20

$

130,285.96

130,285.96

0.00

$

325,764.90 $

686,656.40 $

130,285.96 $

816,942.36

$ 9,827,422.20 $ 14,106,605.68 $

924,862.39 $ 15,031,468.07 $

0.00

$

26,712.00

81,561.00

$ ====1=08=,::;;27=3=.0~0

$

159,938.51 $

159,938.51

0.00

0.00

$

159,938.51 $

159,938.51 $=====~O=.O;;;,O

- 45 -

CITY OF DALTON BOARD OF EDUCATION - WHITIFELD COUNTY SCHEDULE OF TRAVEL OF BOARD MEMBERS YEAR ENDED JUNE 30. 1996

SCHEDULE "11"

BOARD MEMBER ADDRESS
Mr. Tommy Boggs, Chairman (*) P. O. Box 1029 Dalton, Georgia 30722-1029
Mr. Robert B. Hubbs (*) 816 Dogwood Lane Dalton, Georgia 30720
Mr. Randall T. Maret 903 Linden Drive Dalton, Georgia 30720
Ms. Minnie Marsh (*) 905 Croy Drive Dalton, Georgia 30721
Mr. Chip Sellers (*) P. O. Box 2128 Mail Drop 072-48 Dalton, Georgia 30722
Ms. JoAnne Shirley 104 North Rainsong Road Dalton, Georgia 30720
Mr. Jim Wink (*) 1908 Brookhaven Drive Dalton, Georgia 30720

$

107.62

768.54

747.81

340.38

612.55

366.83

$ ====2=,9=4=:3=.7=3

(*) Denotes Board Members Serving as of June 30, 1996
See notes to the general purpose financial statements. - 46 -

SECTION II COMPLIANCE

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

DEPARTMENT OF AUDITS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
June 19, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board of Education
and Superintendent and Members of the City of Dalton Board of Education
COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the City of Dalton Board of Education as of and for the year ended June 30, 1996, and have issued our report thereon dated June 19, 1997. 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 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 general purpose financial statements are free of material misstatement.
Compliance with laws, regulations, contracts, and grants applicable to City of Dalton Board of Education is the responsibility of the Board's management. As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we performed tests of the Board's compliance with certain provisions oflaws, regulations, contracts, and grants. However, the objective of our audit of the financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance that are required to be reported herein under Government Auditing Standards.

96CRL-10

This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
t:f'~~
Claude 1. Vickers State Auditor
CLV:jy 96CRL-IO

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 19, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Dalton Board of Education

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

Ladies and Gentlemen:

We have audited the general purpose fmancial statements of the City of Dalton Board of Education as of and for the year ended June 30, 1996, and have issued our report thereon dated June 19, 1997. 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 have applied procedures to test the City of Dalton Board ofEducation's compliance with the following requirements applicable to each of its Federal financial assistance programs, which are listed in the Schedule of Federal Financial Assistance, for the year ended June 30, 1996:

(1) Political Activity

(5) Allowable Costs/Cost Principles

(2) Civil Rights

(6) Drug-Free Workplace Act

(3) Cash Management

(7) Audit Follow-UplResolution

(4) Federal Financial Reports

(8) Administrative Requirements

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

96CRL-50

With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph of this report. With respect to items not tested, nothing came to our attention that caused us to believe that the City of Dalton Board of Education had not complied, in all material respects, with those requirements. However, the results of our procedures disclosed immaterial instances of noncompliance with those requirements, which are described in the Schedule of Findings and Improper or Questioned Costs.
This report is intended for the infonnation of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~~
Claude 1. Vickers State Auditor
CLV:jy 96CRL-50

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 19, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Dalton Board of Education

SINGLE AUDIT OPINION ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAMS

Ladies and Gentlemen:

We have audited the general purpose financial statements of the City of Dalton Board of Education as of and for the year ended June 30, 1996, and have issued our report thereon dated June 19, 1997. 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 have also audited the City of Dalton Board of Education's compliance with the requirements governing:

(1) Types of Services Allowed or Unallowed

(5) Applicable Special Tests and Provisions

(2) Eligibility
(3) Matching, Level of Effort, and!or Earmarking

(6) Other Requirement Claims for Advances and Reimbursements

(4) Reporting

These requirements are applicable to the major Federal financial assistance programs, which are identified in the Schedule of Federal Financial Assistance, for the year ended June 30, 1996. The management of the City of Dalton Board of Education is responsible for the Board's compliance with those requirements. Our responsibility is to express an opinion on compliance with those requirements based on our audit.

96CRL-80

We conducted our audit of compliance in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and Office of Man~gementand Budget (OMB) Circular A-128, "Audits of State and Local Governments". Those standards and OMB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether material noncompliance with the requirements referred to above occurred. An audit includes examining, on a test basis, evidence about the City of Dalton Board of Education's compliance with those requirements. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the City of Dalton Board of Education complied, in all material respects, with the requirements as disclosed in the second paragraph that are applicable to its major Federal fmancial assistance programs for the year ended June 30, 1996.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:jy 96CRL-80

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

DEPARTMENT OF AUDITS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
June 19, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Dalton Board of Education

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

Ladies and Gentlemen:

We have audited the general purpose financial statements of the City of Dalton Board of Education as of and for the year ended June 30, 1996, and have issued our report thereon dated June 19, 1997. 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.

In connection with our audit of the fiscal year 1996 general purpose financial statements of the City of Dalton Board of Education and with our consideration of the Board's control structure used to administer Federal financial assistance programs, as required by Office of Management and Budget (OMB) Circular A-128, "Audits of State and Local Governments", we selected certain transactions applicable to certain nonmajor Federal financial assistance programs for the year ended June 30, 1996. As required by OMB Circular A-128, we have performed auditing procedures on the selected transactions to test compliance with the requirements governing:

(1) Types of Services Allowed or Unallowed

(2) Eligibility

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

96CRL-120

With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the City of Dalton Board of Education had not complied, in all material respects, with those requirements.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,

CLV:jy 96CRL-120

Claude L. Vickers State Auditor

SECTION III INTERNAL CONTROL

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

DEPARTMENT OF AUDITS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
June 19, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board of Education
and Superintendent and Members of the City of Dalton Board of Education
REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose fmancial statements of the City of Dalton Board of Education as of and for the year ended June 30, 1996, and have issued our report thereon dated June 19, 1997. 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 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 general purpose financial statements are free of material misstatement.
The management of the City of Dalton Board of Education is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate.
96ICL-3

In planning and perfonning our audit of the general purpose financial statements of the City of Dalton Board ofEducation for the year ended June 30, 1996, we obtained an understanding ofthe internal control structure. With respect to the internal control structure, we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide an opinion on the internal control structure. Accordingly, we do not express such an opinion.

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

As described in the Schedule ofFindings and Improper or Questioned Costs, reportable conditions were noted in the following control categories:

(1) Employee Compensation

(2) General Fixed Assets

A material weakness is a reportable condition in which the design or operation of one or more of the specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purpose financial statements being audited may occur and not be detected within a timely period by employees in the nonnal course of perfonning their assigned functions.

Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that the reportable conditions disclosed above are also considered to be material weaknesses.

These conditions were considered in detennining the nature, timing, and extent of the procedures to be perfonned in our audit of the City of Dalton Board of Education's financial statements and this report does not affect our report thereon dated June 19, 1997.

This report is intended for the infonnation of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.

Respectfully submitted,
~~
Claude L. Vickers
State Auditor

CLV:jy 96ICL-3

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

DEPARTMENT OF AUDITS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
June 19, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Dalton Board of Education
SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the City of Dalton Board of Education as of and for the year ended June 30, 1996, and have issued our report thereon dated June 19, 1997. 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 have also audited the City of Dalton Board of Education's compliance with requirements applicable to major Federal financial assistance programs and have issued our opinion thereon dated June 19, 1997.
We conducted our audit in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and the provisions of Office of Management and Budget (OMB) Circular A-128, "Audits of State and Local Governments". Those standards and OMB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free ofmaterial misstatement and about whether the City of Dalton Board of Education complied with laws and regulations, noncompliance with which would be material to a major Federal financial assistance program.
In planning and performing our audit for the year ended June 30, 1996, we considered the Board's internal control structure in order to determine our auditing procedures for the purpose of expressing our opinions on the Board's general purpose financial statements and on its compliance with requirements applicable to major Federal financial assistance programs and to report on the internal control structure in accordance with OMB Circular A-128. This report addresses our consideration of internal control structure policies and procedures relevant to compliance with requirements applicable to Federal financial assistance programs. We have addressed internal control structure policies and procedures relevant to our audit of the general purpose financial statements in a separate report dated June 19, 1997.
96ICL-7

The management of the City of Dalton Board of Education is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that, assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles, and that Federal fmancial assistance programs are managed in compliance with applicable laws and regulations. Because of inherent limitations in any internal control structure, errors, irregularities, or instances of noncompliance may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness ofthe design and operation ofpolicies and procedures may deteriorate.

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

GENERAL REQUIREMENTS

SPECIFIC REQUIREMENTS

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

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

(5) Allowable Costs/Cost Principles

(4) Reporting

(6) Drug-Free Workplace Act (7) Audit Follow-Up/Resolution (8) Administrative Requirements

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

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

During the year ended June 30, 1996, the City of Dalton Board of Education expended 58% of its total Federal financial assistance under major Federal financial assistance programs.

We performed tests of controls, as required by OMB Circular A-128, to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we considered relevant to preventing or detecting material noncompliance with general requirements and specific requirements as

96ICL-7

described above that are applicable to each ofthe Board's major Federal fmancial assistance programs, which qare identified in the Schedule of Federal Financial Assistance. Our procedures were less in scope than would be necessary to render an opinion on these internal control structure policies and procedures. Accordingly, we do not express such an opinion.
We noted certain matters involving the internal control structure and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control structure that, in our judgment, could adversely affect the Boards's ability to administer Federal financial assistance programs in accordance with applicable laws and regulations.
As described in the Schedule ofFindings and Improper or Questioned Costs, reportable conditions were noted in the following control category:
Administrative Requirements
A material weakness is a reportable condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that noncompliance with laws and regulations that would be material to a Federal financial assistance program may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions.
Our consideration of the internal control structure policies and procedures used in administering Federal financial assistance would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defmed above. However, we believe that the reportable conditions described above are also considered to be material weaknesses.
These conditions were considered in determining the nature, timing, and extent of the procedures to be performed in our audit of the City of Dalton Board of Education's compliance with requirements applicable to its major Federal fmancial assistance programs for the year ended June 30, 1996, and this report does not affect our report thereon dated June 19, 1997.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies and should not be used for any other purpose. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,

CLV:jy 96ICL-7

Claude L. Vickers State Auditor

SECTION IV FINDINGS AND IMPROPER OR QUESTIONED COSTS

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30,1996
PRIOR YEAR
AUDIT FOLLOW-UPIRESOLUTION Failure to Submit Individual Travel Expense Reports Improper Travel Expenses Financial Statements Finding Resolved Audit Control Number 7712-95-01
The audit report for the year ended June 30, 1995, disclosed that the Board reimbursed an employee in the amount of $646.31 for meals of certain Board members and their spouses as part of travel expenses incurred for a Georgia School Board Association conference. During the year under review, the Board implemented procedures to ensure that Board members and Board employees submit individual travel expense reports for reimbursement. In addition, the Board discontinued the practice of paying meals for Board members' and/or employees' spouses.
AUDIT FOLLOW-UPIRESOLUTION Detailed Listing of Salaries Not Reconciled Financial Statements Finding Resolved Audit Control Number 7721-95-02
,
The audit report for the year ended June 30, 1995, stated that the detailed listing of salary payments made to employees as submitted by the Board to the Georgia Department of Audits was not reconciled with the general ledger as presented for audit. During the year under review, the Board established procedures to ensure that the detailed listing of salaries was reconciled to the accounting records prior to submission to the Georgia Department of Audits.
PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 7721-93-01
The audit report for the year ended June 30, 1995, noted that the management of the City of Dalton Board of Education had chosen not to maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. In the year under review, the Board did not establish a General Fixed Assets Account Group within the formal accounting records. This condition results in the general purpose financial statements of the Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board
- 1-

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1996
PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 7721-93-01
to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the Board and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.
ADMINISTRATIVE REQUIREMENTS Inadequate Inventory Records Federal Financial Assistance Major Program Reportable Condition - Material Weakness Nonmaterial Noncompliance Audit Control Number 7721-93-04
The audit report for the year ended June 30, 1995, stated that the Board's property management records maintained by the Board for the Elementary and Secondary Education Act - Title VI - Innovative Education Strategies Program (CFDA 84.298) were incomplete and failed to meet property management standards as set forth in Chapter 41 of the Financial Management for Georgia Local Units ofAdministration (FMGLUA). During the year under review, this condition continued to exist, the inventory records as presented for audit did not always contain a manufacturer's serial or other identifying number, acquisition cost and date. This condition occurred because management did not ensure that property management records contained all required data elements. An inventory system should be implemented that provides for the identification of all equipment purchased as outlined in Chapter 41 of the FMGLUA. Perpetual records should include historical information regarding additions and deletions made to the equipment inventory during each fiscal year (when applicable). Periodic physical inventory counts should be performed and reconciled to the property records to ensure the accuracy of inventory records.
-2-

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY SCHEDULE OF FINDINGS AND IMPROPER OR OUESTIONED COSTS
YEAR ENDED JUNE 30, 1996
PIDORYEAWCURRENTYEAR
EMPLOYEE COMPENSATION Payroll Reporting Financial Statements Reportable Condition - Material Weakness Nonmaterial Noncompliance Audit Control Number 7721-94-02
The audit report for the year ended June 30, 1995, noted that the Board incorrectly calculated payroll withholding for the Teachers' Retirement System of Georgia (TRS) and failed to withhold the proper amounts from certain administrative employees. In addition, the Board incorrectly calculated the employers matching cost for these same employees and failed to remit these amounts to the TRS. For the year under review, the Board again failed to meet the aforementioned compliance requirements. This noncompliance occurred because management claimed to be unaware that deductions should be made on total compensation as specified in the employee's contract. Internal controls should be established by the Board to ensure that payroll deductions are based on the total compensation paid as specified in the employee's contract and the proper deductions are withheld and remitted to the TRS.
ADMINISTRATIVE REQUIREMENTS Inadequate Inventory Records Federal Financial Assistance Reportable Condition - Material Weakness Nonmaterial Noncompliance Audit Control Number 7721-95-03
The audit report for year ended June 30, 1995, stated that the Board's property management records for the Individuals with Disabilities Education Act - Part B - Special Education - Severely Emotionally Disturbed Program (CFDA 84.027) were incomplete and failed to meet property management standards as set forth in Chapter 41 ofthe Financial Management for Georgia Local Units of Administration (FMGLUA). During the year under review, deficiencies continued to exist in the Board's property management records. Specifically, the inventory records as presented for audit did not contain acquisition cost and date or funding source for purchases made prior to fiscal year 1996. This condition occurred because management did not ensure that property management records contained all required data elements. An inventory system should be implemented that provides for the identification of all equipment purchased as outlined in Chapter 41 of the FMGLUA. Perpetual inventory records should include historical information regarding additions and deletions made to the equipment inventory during each fiscal year (when applicable). Periodic physical inventory counts should be performed and reconciled to the property records to ensure the accuracy of inventory records.
Note: The City of Dalton Board of Education was provided an opportunity to include pertinent comments from the Board's management concerning these audit [mdings, conclusions and recommendations. The Board has elected not to provide comments for inclusion in this report.
-3-