City of Dalton Board of Education, Whitfield County, report on audit of the financial statements for the fiscal year ended June 30, 2002

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CITY-OFi.>ALTON BOARDO, .F EDUCATION,,
,WHITFIELD COUNTY, GEOR$IA

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, REPORT ON AUDIT.:

OF-THE FINANCIAL STATEMENTS. 0

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. FOR THE FI.SCA L.YEAR ENDED''JU' NE- 30. 2.002,

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Russell w: Hlntoh
.State Auditor '

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

SECTION I

FINANCIAL

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

EXHIBITS

GENERAL-PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

D NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

ADDITIONAL FINANCIAL INFORMATION

COMBINING AND INDIVIDUAL FUND STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

I

FIDUCIARY FUND TYPE

STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

AGENCY FUND

SCHEDULES

I SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2 SCHEDULE OF STATE REVENUE 3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

Page
2
4 6 7
22
24
26
28 30 31
31 :is

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

Page

SECTION I

FINANCIAL

ADDillONAL FINANCIAL INFORMATION

SCHEDULES

ALLOlMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

36

5

BYSITE

37

SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE wrrn GOVERNMENT AUDITING STANDARDS
REPORT ON COMPLIANCE Wffi:I REQUIREMENTS APPLICABLE TO EACH MAJOR
PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE wrrn
0MB CIRCULAR A-133

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

SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION! FINANCIAL

Ru~,H I W. H1N1<>,
STATF AUDITOR
(4041656 2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Wa.,hmgton Slrcct, SW Suite 214 AtlJnta GeorgtJ 30334-8400
June 13, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Educahon
and Supenntendent and Members of the City of Dalton Board of Educahon
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen
We have audited the accompanymg general-purpose financial statements ofthe City ofDalton Board of Educahon, as of and for the year ended June 30, 2002, as hsted m the table of contents These general-purpose financial statements are the respons1b1hty ofthe City ofDalton Board ofEducation's management Our respons1b1hty 1s to express an op1mon on these general-purpose financial statements based on our audit
We conducted our audit m accordance with aud1tmg standards generally accepted m the Umted States of Amenca and the standards apphcable to financial audits contamed m Government Aud1tmg Standards, issued by the Comptroller General of the Umted States Those standards require that we plan and perform the aucht to obtam reasonable assurance about whether the financial statements are free ofmatenal misstatement An audit mcludes exammmg, on a test basis, evidence supportmg the amounts and disclosures m the financial statements An audit also mcludes assessmg the accountmg pnnc1ples used and s1gmficant estimates made by management, as well as evaluatmg the overall financial statement prcsentahon We bcheve that our audit provides a reasonable basts for our opm1on
As descnbed m the notes to the general-purpose financial statements, the Board of Education's financial statements have been prepared usmg certam accounhng practices and pohc1es which, m our opm10n, vary m some respects from generally accepted accountmg pnnc1plcs These vanances are descnbed as follows

2002ARL-13

* The general-purpose financial statements of the Board of Educat10n did not contarn a
General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be rncluded to conform to generally accepted accountmg pnnc1ples
* School actJV1ty accounts marntarned at the rnd1v1dual schools are not mcluded rn the
general-purpose financial statements To conform to generally accepted accountrng pnnc1ples, these accounts should be mcluded rn the general-purpose financial statements
The aggregate effects on the general-purpose financial statements of these vanances or om1ss10ns have not been determmed, but are beheved to be matenal
In our opimon, except for the effects on the general-purpose financial statements of the matters referred to rn the precedmg paragraph, the general-pmpose financial statements referred to above present fairly, rn all matenaJ respects, the financial posttton ofthe City ofDalton Board ofEducation as of June 30, 2002, and the results of its operations for the year then ended, rn conformity with accountmg pnnctples generally accepted rn the Uruted States of Amenca.
In accordance with Government AuditJng Standards, we have also issued our report dated June 13, 2003, on our cons1deratJon ofthe City ofDalton Board ofEducation's rntemal control over financial reportrng and our tests of1ts compliance with certain proV1s10ns oflaws, regulations, contracts and grants That report 1s an mtegral part of an audit performed m accordance With Government AuditJng Standards and should be read rn conJunctJon with thts report rn cons1dcnng the results of our audit
Our audit was performed for the purpose of formrng an oprn1on on the general-purpose financial statements of the City of Dalton Board of Education taken as a whole. The accompanymg combrnmg and rnd1v1dual fund statements (Exh1b1ts E through I) and the financial schedules (Schedules I through 5), which rncludes the Schedule ofExpenditures ofFederal Awards as required by U S Office of Management and Budget Circular A-133, Audus ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a reqmred part ofthe general-purpose financial statements Such mformatlon has been subJected to the auditrng procedures applied m the audit of the general-purpose financial statements and rn our op1mon, except for the effects of the matters referred torn the tlurd paragraph, such rnformatton 1s fairly stated, rn all matenal respects, rn relation to the general-purpose financial statements taken as a whole
2002ARL-l3

A copy ofth1s report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24.
Respectfully submitted,

RWH.as 2002ARL-13

Hmton Stat Auditor

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY ,,_ -

CITY OE PALTON BOARD OE EDUCATION -WHITFIELD COUNTY COMBINED BALANCE SHEET
All EYNP TYPES AND ACCOUNT GROUP JUNE 30 2002

~ Cash and Cash Eqwvalents
lnvesm-oents
Accounts Roceivable
Due from Other Fi.n:ta
lnventooes Food Donated Commodrties Purchased Food
Amount Avallable In Debt Servk:e Fund
Amcult to be PrOVldad in Future Years For Payment of Capital Leeae Agreement Bond Debt
TOlalAuels

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

s

548 816 50

s ne 372 2s

4 e6128217 s

62 664 73

22,342 392 12

3 729,192 30

529 919 71

154 840 14

38 647 67 12 612 43

s s g 23Q 290 97 643 944 44 s 23 276 604 51

l~fHUilES ANC! El.!NQ EQU[D'.
LIABILITIES
Gash Over01III Accounts Payable 5elar1ea Payable
Short-Term Debt Expl~ Cnnt Balances Payable
ContradaPayReta,_. Payable
Due to Otner Foods Deferred Revenue Capttal Lea.e Agiee11.en1ts General Ob<lgabon Bonda Payable
Total Ltabllrtles
FUND EQUITY
Fund Balances R....-ved ForOebtServtce For lnventonea Food Donated Commodibn Purchased Food For Local~ Ou1lay Projeds
For Purpose of Bond Issue
For SPLOST Projects Un"""""'8d
Undos,gnaled Deficrt
Total Fund Equity

s s 144348865
3 873 715 64 6,000 000 00
11,318 88

78,807 n
89 714 94 1n 004 53
4 090 24
s

32,000 00

Q7218880 341 517 17

s 11.328 499 35 s 359 817 48 s 1313705 97

s s 107233083
000 -3 161 539 01
s -2 089 208 38 s

38 647 57
12,512 43
s

2 126 528 08 13,221 208 BEi
5 504 898 93

233 168 ge

111026664

s 284 326 QB

21 982 898 54

Total Llabbtle8 and Fund Equrty

s 9 239 290 97 s

The noles to the general-purpose financial atatements ere en 11\tegral part of tt'IIS statement.

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643 944 44 s 23 278 604 ~1

DEBT SERVICE
FUND

FIDUCIARY FUNDlYPE AGENCY FUND

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

(Memorend1..m On!)'.j

JUNE 30 2002

JUNE 30 2001

s s 1,328,18875

37B 572 00

s

2711015

27 393 648 17

17,11807B75

1 277 02-4 1B $

13,032 53

5 704 008 86

6,359 078 96

4198!586

$

1 304,134 33

38 647 !57 12 512-43
1304,13433

43 007 74 10 801 78

8 383 352 92 13465 865 67

9 383 352 512 13 -465.865 67

13 884-452 09

$ 1 304 134 33 $

13 032 !53 $

24 1!53 352 92 $ 5818301359 70 $ 37 837 938 18

$

13 032 53

$

89,640 30 $ 2,1e8 047 e3

1513181 59

1,822 393 60

-4 050 720 37

3 925 24-4 83

8 000,000 00

15-407 10

8186 92

072 188 80

398 454 83

34151717

1-40 428 95

4198586

32 000 00

534 55

$

Q,363 352 Q2

1-4 noooooo

8 383,352 92
1-4 no 00000

13 864-4!52 08

$

s 13 032 53

s 2-4 1531352 82

37 168 208 2!5 $ 221-41173000

$ 1304134 33
000 $ 1 304 134 33

$ 1304,13433

38,647 57 s
12,!512 43 3 198,658 71 13 221,208 88 5,504,896 83

-43,867 74 10 801 76
n 2154 283
10,314 214 83

1,343 433 BO -3 181 538 01

2 882 Q36 00

$ 21 -482151 -45 $ 1542820810

$

s 1304134 33

13 032 53 $

s 2-4 153 3!52 82 $ 581830 359 70

37 837 936 16

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CITY Of DALTON BOARD OF EDUCATION - WHITFIELD COUNTY
COMBINED STATEMENT OE REVENUES EXPENDITURES ANP CHANGES IN FUND BALANCES All, GOVERNMENTAL FUND TYPES YEAR ENPEP JUNE 30 2002

REVENUES
State Funds Federal Fl.nd:a
Taxes
Other Funds
Total Revenuee
EXPENDITURES
Currem lnatrudlon Suppa! Servic:o, Pu~ISeMcea
lmproyernant of lnstruclJoNil Serv,cea Educabonal Mecila Services
General Admonlatnlllon School Adm1n11trabon Busuiels Adm1n11lrabon
Maintenance end Operabon of Plant
StudontT~Servlca Central Suppa! SeMCeS
Other SuppC>rt ServlCea
Food Services Operat,on Comrnunty 5eMcea Oporabons Cap,tal Outlay Debt 5eMce Pnnapa1
Interest
Total Expenditures
Excess of Revenues over (under) Expendrtures
Qit!ER fl~CING SQURCES UJSESl
Accrued fnterest on Bonds Sold Proceed from General Obl,gallon Bards
Par Velue
Pl'Wffllum on Bonda Sold Operating Transfers In
Openrung Transfer.I Out
Total Other FNnang Sources (Uses)
Excess of Revenuea end Other Flll800ng Sources over (under) Expenditures end Other Fmanong Uses
FUND BAI 6NCE JULY 1
Food tnventory - Net Change in Period Donated Commodlboo
Purt:haeod Food
FUND BALANCE JUNE 30
... The notes to the genere1-p!SpOM flnanaal statements are en integral pert of this a:tetement

GENERAL FUND

SPECIAL REVENUE
FUND

s 21255,10382 s
19885,11370 780 034 02
s 41 920 251 54 s

889 237 79 3 648,020 91
404 567 27
4 921 825 97

s 29,829 305 11 s 2 218 759 27

1 170 718 07 1 757 399 58
976,981 33 834 291 &4 2,036,488 28 500 327 68 419146561 1704841 93 1 "161 413 2-1
8 373 08
90,832 47 499,065 99

354,209 11 348 027 87 "11,984 SO -10,-155 9-1
3,138 75
23 220 10
17 802 36 1918180 17

335 000 00 327 8-17 50
s -15 523 929 51 s s -3 603 sn 97 s

4 963 7~07 -41 932 10

s 1 on,33063 s
-1 031 51
s 1 071 299 12 s

1 031 51 1 031 51

s -2 532 378 85 s
443,170 47

0 900 59 328 837 05

-5 320 17 1 710 87

s -2,089 208 38 s

284 326 98

EXHIBIT "B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

!Memorandum On~)

YEAR ENDED

JUNE 30 2002

JUNE 301 2001

s 22,124 341 61 s 23 792 648 64

3,648,020 91

3,922,611 94

s 3 819 667 48 s 1,276 741 17

24 781,522.35

24 486,656 51

2 27128002

29863

3 458 179 94

2,280,447 38

s 5 890 947 50 s 12no39eo s 54 010 064 81 s 54 '482 364 47

s

s

175 TT4 48

7 811 227 97
4 166 099 17 356 470 51
s 12 509 572 11 s s -6 618 824 61 s

000 s 32,048 064 38 s 31 137 739 97

1524,92518 2105,427 '5 1 018 945 83
s14 747 se 2,039 827 03
678,10214 4 19146561 1,727,882 03 1,481413 24
26 175 44 1,918 160 17
90 832 47 8,310 293 96

1,928,833 30 2,676,662 22 1 053 791 37
837,515 80 2,380,847 74
541,314 57 3 628 485 27 1,493,112 38
625 367 88 28 569 44
1 734 254 43 114 908 38
1148831411

4 501,099 17 68411801

4,140 000 00
ns 368 24

s 0 00

62 997,259 69 s 64,380,863 09

12noaseo s -11987 194 88 s -9 898 518 62

s s 14 no 00000
229 655 20
-107233083
s 13 927 324 57 s

s 27,094 53

27,094 53

27 094 53 s

14 770000 00 229 655 20
1 073 362 14 s
-1 073 362 14
15 026 749 73 s

1 385 881 35 -1 385 881 35
0 00

s s 7 308 899 96
14,654,198 58

1 304,134 33 s

s 6 039,554 85

-9,898,518 62

0 00

15 428,206 10

25,313 089 74

-5,320 17 171067

3,765 77 7 889 21

$ 21 962,898 54 S 1 304 134 33 $ 21462151 45 S 15 428 206 10

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CITY QF DALTON BOARD OF EDUCATION WHIIFIELP COUNTY
COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND SAI..ANCES BUDGET AND ACTUAL <NON;:GAAP BASISl
GENERAL AND SPECtAL REVENUE FUNDS YEAR ENDED JUNE 30 2002

EXHIBIT "C"

GENERAL FUND

B~DGET

ACTUAL

REVENUES
State Funds Federel Funds Taxes Other Funds
Total Revenues
EXPENOIIURES

s s 20,772,470 00

21 255 103 82

19,988 800 00
8, 125,262 00

19 885,113 70 780 034 02

s s 461888 532 00

4i 1920 251 54

Cunen1 Instruction
- - - SupponSerw:es Pup,ISeMces Improvement of lnstrucbOnll ServlC89
General Admnetrabon School A d m Boslneu AdmllllltrabOn
Mantananc:e and Operabon of Plant
S11.den1 Tranapol1ab0n SeMces Cen1ral Support Servicea Qlher Suppon SeMces FoodSeMcosC)perat,on Communrty Servk:ea Operat1011s cap,1a1 Clu1lay DebtSeMc:e
TOlill Expendrtures
Excess of Rev&n\.Je9 over (under) Expenditures

s s 28,678,829 81

29 829 30511

1 171 835 30 2,059,788 83
995 973 54 388,050 38 2 060 388 41 578 734 01 2,283,700 24 1,850,500 42 4 337 699 05

1 170 716 07 1 757 399 58
976 961 33 634 291 64 2 038 88 28 500 327 68 4 19146561 1 704 641 93 1 48141324
8 373 08

3,483,535 00

90 832 47 .99,065 99 862 647 50

s 47 887032 n I 45 523 929 51

s -1 ooo soon s -3 603 677 97

OTHER FINANCING SOURCES lUSESl
Other Sources Other Uses
To181 Other F,nancng Souroes (Uses)

s s 287 000 00

107233083

-1,254,000 00

-1 031 51

s s -987 000 00

1 071 299 12

Excess of Revenues end Olher Flnanong Sources
owr ti.-> Expondm,m ..-.cl Otho,- F,nanc:mg u... s -1,967,50077 $ -2 532 :us 65

EUNP BALANCE J!.!LY l 2001

2,229,268 89

443 170 47

Ad)ultmon1a

-26 414 60

F!.!~Q BALANt;E JUNE~ 2QQi

s 2351353 52 $ 210891208 36

SPECIAL REVENUE FUND

BUDGET

ACTUAL

s 26172800 s 889,237 79
3,167 550 00 3 648 020 91

375 550 00

40,1 567 27

s 31804 828 00 s 4 92182597

s 1,449 484 18 s 2 218,759 27

225 863 00 479 121 58
38 952 00 82 031 00

354 209 11 348,027 87 41 934 50 40 455 94
3 138 75

3 710 00 12 000 00

23 220 10

18 250 00 181053400

17 802 36
1 916 iso H

s 3 915 945 n s 4 983 758 07 s -11111777 s --4193210

s 67,000 00 s

1 031 51

s 67 000 00 s

1 031 51

s -44 111 n s -40 900 59

--45 660 39

274 067 55

519 720 32

$ 429 942 16 s 233 166 96

The notes to the generai-pull)OS8 finanaal statements are an integral part of thtS statement "6.

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD com.'TY
NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30. 2002

EXHIDIT"D"

Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The City ofDalton Board ofEducat10n (School D1stnct) was established under the laws ofthe State of Georgia and operates under the gmdance of a school board elected by the voters and a Supenntendent appomted by the Board The School D1stnct 1s organized as a separate legal entity as defined by generally accepted accountmg pnnc1ples and has the power to levy taxes and set its budget without approval by the City Government or any other entity Accordmgly, the School D1stnct 1s a pnmary government for accountmg purposes
FUND ACCOUNTING
The School D1stnct uses funds and an account group to report on its financial pos1t10n and the results of1ts operations. Fund accountmg 1s designed to demonstrate legal compliance and to aid financial management by segregatmg transact10ns related to certam governmental functions or act1V1t1es A fund 1s a separate accounting entity with a self-balancmg set of accounts An account group 1s a financial reportmg device designed to provide accountability for certain assets and liab1httes that are not recorded m the funds because they do not d1rectly affect expendable available financial resources
General Fixed Assets are recorded as expenditures ID the vanous funds at the time of purchase A General Fixed Assets Account Group 1s not presently maintained by the School D1stnct To conform to generally accepted accountmg pnnc1ples, a General Fixed Assets Account Group should be mamtained for reportmg the cost of assets acqu1red by governmental fund types
Although "school activity accounts" are maintained at the 1Ddiv1dual schools, neither the assets, liabilities and fund eqmty, nor the revenues, expenditures and changes ID fund balances of these accounts are reflected ID these financial statements. To conform to generally accepted accountmg pnnc1ples, these accounts should be recorded m the general-purpose fmanc1al statements
The general-purpose financial statements account for all State, Federal, Taxes and Other funds under control of the School D1stnct, ID compliance with generally accepted account1Dg pnnc1ples apphcablc to governmental units, unless otherwise disclosed ID these notes Funds and the account group presented m tlus report are as follows
GOVERNMENTAL FUND TYPES - are used to account for all or most of the School D1stnct"s educahonal act1V1tles. Governmental Fund Types mclude
GENERAL FUND - the fund used to account for all financial resources of the School D1stnct except those required to be accounted for ID another fund These transact10ns relate to resources obtained and used for services provided by a board of educa110n

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CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY
NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT"D"

Note l SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for maJor capital proJects) that are legally restncted to expenditures for specified purposes. These funds are received pnmanly from the Georgia Department of Education and from the Federal government to accomphsh specific educational obJect1ves
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acqu1s1t1on or construction ofmaJor capital facthhes
DEBT SERVICE FUND - the fund used to account for the accumulat1on ofresources for, and the payment of, general long-term pnnc1paJ, mterest and paying agent fees
FIDUCIARY FUND TYPE - the funds used to account for assets held by a government unit m a trustee capacity or as an agent for mdJVJduaJs, pnvate orgaruzat10ns, other government units and/or other funds. This fund includes:
AGENCY FUND - the fund used to account for assets held m a fiduciary capacity for other funds, governments, or md1v1duaJs
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting deVJce used to account for general obhgatton debt outstandmg and capital lease obhgauons
BASIS OF ACCOUNTING
The accountmg and fmanc1aJ reporting treatment apphed to a fund 1s determmed by its measurenient focus All governmental funds are accounted for usmg a current financial resources mcasurenient focus With tlus measurement focus, only current assets and current hab1ht1es generally are mcluded on the balance sheet. Operatmg statements ofthese funds present mcreases (1 e , revenues and other financmg sources) and decreases (1.e, expenditures and other financmg uses) m net current assets Therr reported fund balance 1s considered a measure of available spendable resources
Liab1hues which are expected to be financed from available spendable resources are reported as hab1li1.1es m the governmental funds Other hab1httes, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group
Agency funds are purely custodial m nature and do not mvolve measurement ofresults ofoperations
Governmental funds are accounted for using the modified accrual basts of accounting under which
Revenues are recogruzed when susceptible to accrual (1 e , when they become both measurable and available) "Measurable" mearis the amount of the transaction can be detennmed and "available" mearis collectible withm the current penod or soon enough thereafter to be used to pay hab1!tt1es of the current penod. The School Distnct considers receivables collected w1tlun sixty days after year-
- 8-

CITY OF DALTON BOARD OF l:.DLICATION - \', Hll fl ELD COUNTY NOTES TO I HE GEN[RAL-PURPOSE flNANCIAL STATEM~NTS JUNE 30. 2002

EXHIBIT"[)"

Note I SUMMARY OF SIGNIFICANl ACCOUNTING POLICIES
end to be available Property taxes. sales taxes and mterest are conMdereJ to be susceptihle to accrual Nonexchange transact10ns. m which the School D1,tnct give~ (or receives) value without directly rece1vmg (or g1vmg) equal value m exchange. mclude property tai..es, local option sales taxes. mtergovemmental grants and donauon~ Revenue for property taxes 1s recogmzed m the fiscal year for Y.h1eh the taxes are levied Re.,,enue from sales taxes 1s recognized m the fiscal year the resources are received or susceptible to accrual Revenue from grants and donations 1s recognized m the fiscal year m which all ehg1bihty reqmrements have been satJsfied
Expenditures are generally recogmzed when the related fund habihty 1s mcurred
A substantial number of personnel of the School D1stnct were employed for a one hundred and nmety day penod beginning m August 2001 and endmg m early June 2002 i'..mployment contracts for these employment penods typically specify that compensation be paid m twelve equal monthly payments begmnmg m September 2001 and endmg m August 2002 State grants to fund the State"s share or these contracts arc disbursed to the School District m the same twelve month penod In accordance Y.1th generally accepted accountmg pnnc1ples. salary and fnnge benefit expenditure, and the related revenue from the State to fund these contracts are recorded m the fiscal penod covered by these financial statements.
Agency funds arc accounted for usmg the modified accrual basis ofaccountmg m recogmzmg assets and hab1hties
BllDGET
rhe C1tv of Dalton Board ofEducat1on"s budget 1s a complete financial plan for the School D1stnct's fiscal year and 1s ba,ed upon estimates of expenditures together with probable fundmg sources There 1s no statutory proh1b1t10n regardmg overexpendlture of the budget at any level The budget for all governmental funds 1s prepared by fund. funct10n and obJect The legal level of budget control was estahhshed by the Board at the aggregate lc"el The budget for governmental fund~ was prepared on a bas~ other than generally accepted accountmg principles
The budget process begm, when the School D1stnct's admm1stration prepares a tentative budget for the Board's approval After approval ofth1s tentative budget hy the Board, such budget 1s adve111sed at lea~t once ma newspaper of general circulation m the locality At the next regular meetmg of the Board after advemsement. the Board receives commenb on the tentative hudgct. makes rev1s10n~ a, nece,sary and adopts a final school budget Thi~ final budget 1s then submitted. m accordance with prov1s1ons of the Quality Basic Cducat1on Act. OCGA ScctJon 20-2-167(c). to the Georgia Department of Education The Board may mcrease or decrea~e the budget al any ume durmg the year All unexpended budget authonty lapses at fiscal year-end
The Statement of Revenues, Expenditures and Changes m Fund Balances - Budget and Actual pre~ents actual and budgeted data for the Special Revenue Fund To facilitate comparison with the budget. the followmg adjustments have been made to fund balance as reflected on Cxh1b1t "13" oftlu~ rc=port
-9-

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY NOTES TO THE GENERAL-PURPOSE FINANQAL STATEMENTS
JUNE 30. 2002

EXHIBIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Special Revenue
Fund

FUND BALANCE JULY 1, 2001

$ 328,837 05

AdJustments Inventones - July 1, 2001 Food Donated Commodities Purchased Foods

-43,967 74 -10.801 76

Fund Balance July 1, 2001 (Budget Basis)

$ 274,067 55

Excess ofRevenues and Other Financing Sources over (under) Expenchtures and Other Financing Uses
FUND BALANCE JUNE 30, 2002 (Budget Basis)
CASH AND CASH EQUIVALENTS

-40.900 59
$ 233. I 66.96

COMPOSITION OF DEPOSITS Cash and cash eqwvalents consist ofcash on hand, demand deposits and short-term investments with onginal matuntles of three months or less from the date of acqws1t10n in authonzed financial msl!tutlons. Georgia Laws OCGA 45-8-14 authonze the School D1stnct to deposit its funds in one or more solvent banks or insured Federal savings and loan associalions.

INVESTMENTS

COMPOSITION OF INVESTMENTS Investments made by the School D1stnct in nonpartlc1pal!ng interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Part1c1pal!ng interest-earmng contracts and money market investments with a matunty at purchase ofone year or less are reported at amortized cost. Both part1c1pating mterest-earning contracts and money market investments with a matunty at purchase greater than one year are reported at farrvalue The Official Code ofGeorgia Annotated Secl!on 36-83-4 authonzes the School District to invest its funds and in selecting among options for investment or among instJtutional bids for deposits, the highest rate ofreturn shall be the obJect1ve, given equivalent conditions of safety and hqu1d1ty Funds may be invested m the following.

( 1) Obhgalions issued by the State of Georgia or by other states,

(2) Obhgal!ons issued by the Uruted States government,

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTI' NOTES TO THE GENERAL-PURPOSE FINANCl,\L STATEMENTS
JUNE 30. 2002

EXHIBIT"D"

Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(3) Obhgat1ons fully msured or guaranteed by the Umted States government or a Umted States government agency,

(4) Obhgat10ns of any corporation of the Umted States government,

(5) Pnme banker"s acceptances,

(6) The Local Government Investment Pool admm1stered by the State of Georgia, Office of Treasury and Fiscal Services,

(7) Repurchase agreements, and

(8) Obhgallons ofotherpohtical subd1v1s10ns of the State of Georgia

RECEIVABLES

Receivables consist of grant reimbursements due on Federal, State or other grants for ell.penditures made but not reimbursed and other receivables disclosed from mformation available Receivables are recorded when either the asset or revenue recogmtion cntena has been met Receivables recorded on the general-purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables

PROPERTY TAXES

The City of Dalton, Georgia fixed the property tax levy for the 2001 tax digest year (calendar year) on October 15, 2001 (levy date) Taxes were due on December 20, 2001 (hen date) Taxes collected within the current fiscal year or within 60 days after year-end on the 2001 tax digest are reported as revenue m fiscal year 2002. The Wlutfield County Tax Comrmss1oner bills and collects the property taxes for the School D1stnct and rermts the balance of taxes collected to the School D1stnct Property tax revenues dunng the fiscal year ended June 30, 2002 for mamtenance and operations amounted to $19,885,113 70

The tax millage rate levied for the 2001 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 Operallons

~ mills

SALES TAXES

Special Purpose Local Opllon Sales Tax revenue during the year amounted to $4,896,408 65 and 1s to be used for capital outlay for educational purposes or debt service This sales tax was authonzed by local referendum and the sales tax must be re-authonzed at least every five years

- II -

CITY OF DALTON BOARD OF EDUCATION - WHITTIELD COUNTY NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002

EXHIBIT "D"

Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City ofDalton Bwlding Authority (City Government) sold general obhgatlon bonds to provide advance funding for Capital Outlay Projects associated with issuance of a Special Purpose Local Option Sales Tax (SPLOST). In fiscal year 2002, the School D1stnct provided $4,508,561 24 of SPLOST proceeds to the City Government for debt service on said general obligation debt
INVENTORIES
FOOD INVENTORIES Inventories of donated food commodities used m the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combmed Balance Sheet at cost (first-in, first-out) Donated food commodities are recorded as revenues ru1d expenditures at the time commodity items are received. Purchased foods inventones are recorded as expenditures at the time ofpurchase. The mventories 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
COMPENSATED ABSENCES
Compensated absences represent obligations ofthe School District relating to employees' nghts to
receive compensation for future absences based upon service already rendered This obligation
relates only to vesting accumulating leave in which payment 1s probable Wld can be reasonably estimated. No liability has been recorded m the md1V1dual funds for the current portion of this obhgahon as this amount is deemed 1mmatenal to the general-purpose financial statements
Additionally. the dollar value of accumulated compensated absences at June 30, which will be payable from future resources has not been recorded m the General Long-Term Debt Account Group as this liability 1s also deemed to be immatenal to the fair presentat10n of these financial statements.
GENERAL OBLIGATION BONDS
The School Distnct issues general obhgation bonds to provide funds for the acqu1sit10n ru1d construction ofmaJor capital facilities. Bond premiums and discounts, as well as issuance costs. are recogruzed m the financial statements during the year bonds are issued. General ob!igat10n bonds are direct obhgat10ns and pledge the full fruth and credit ofthe government The outstandmg amount ofthese bonds is recorded m the General Long-Term Debt Account Group. Under the Charter ofthe City ofDalton (Municipality) the School District is given authority to handle all matters concerning the cooperation and management of the School District, but the School District is not specifically given the power to incur long-term debt. Under the Charter ofthe City of Dalton the power to mcur long-term debt is reserved to the Mun1c1pal1ty. However, on November 6, 2001, the voters of City of Dalton Wld Whitfield Co\lJ'lty approved a referendum authorizing the School Distnct to issue general obligat10n debt ofthe School District not to exceed $15,000,000. Subsequently. the Superior Court of Whitfield County issued a Validation Order authonzmg the issuance of the above ment10ned bonds.
- 12 -

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002

EXHIBIT"D"

Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

FUND BALANCES RESERVED
Reserves represent those portions of fund eqmty that are legally segregated for a specific future use.

For Local Outlay Projects -The City of Dalton (Municipality) appropnated funds to the School Distnct for Capital Outlay (facilities and/or technology) Projects

INTERFUND TRANSACTIONS

The School Distnct has the following types of interfund transactions

Reimbunements ofexpenditures 1mtially made from a fund that are properly applicable to another fund are recorded as expenditures m the reunbursmg fund and as reductions of expenditures m the fund that 1s reimbursed.

Operating transfen 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 mdicate that they are presented only to facilitate financial analysis. Data m 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 aggregat10n of this data. Certam reclassifications have been made to the comparanve data to conform to the current year classifications.

DEFICIT FUND BALANCES

Funds reportmg a deficit fund balance position at June 30, 2002, are as follows:

Fund Type/Fund Name

Deficit Balances

Governmental Fund Type General Fund

$ 3,161,539.01

The School D1stnct increased the calendar year 2002 property tax millage rate by I 045 mills The total calendar year 2002 property tax millage rate 1s 8 619 mills.

- 13 -

CITY OF DALTON BOARD OF EDUCATION - WHITFIEW COUNTY NOTES TO TifE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

Note 2 DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 proVJdes that there shall not be on deposit at any time many depository for a time longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee ofmsurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of secunties pledged shall be equal to not less than 110 percent ofthe pubhc funds bemg secured after the deduction ofthe amount ofdeposit msurance.
Ifa depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe
secunt1es pledged to secure a pool ofpubhc funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) proVJdes an officer holdmg pubhc funds may, m his discretion, waive the reqwrement for secunty m the case ofoperatmg funds placed m demand deposit checking accounts.
Acceptable secunty for deposits consists of any one of or any combmabon of the followmg
(I) Surety bond signed by a surety company duly quahfied and authonzed to transact busmess within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of mdebtedness or other dITect obhgations of the Umted States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of mdebtedness or other obhgabons of the counties or mumc1pal1ties of the State of Georgia,
(5) Bonds of any public authonty created by the laws of the State of Georgia, prov1dmg that the statute that created the authonty authonzed the use of the bonds for this purpose,
(6) lndustnal revenue bonds and bonds of development authonties created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates of mdebtedness, or other obhgations of a subs1d1ary corporation of the Umted States government, which are fully guaranteed by the Umted States government both as to pnnc1pal and mterest or debt obhgations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm CredJ.t Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association
CATEGORIZATION OF DEPOSITS At June 30, 2002, the bank balances were $16,021,783.93 The amounts ofthe total bank balances are classified mto three categones of credit nsk

- 14 -

CITY OF DALTON BOARD OF EDUCATION - WHI I FIELD COUN fY NO I ES TO THC GENERAL-PURPOSE Fl"JANCIAL STATEMFNTS JUNE 30, 2002

EXHIBIT "D"

Note 2 DEPOSITS AND INVESTMENTS

Category I - Cash that 1s msured (e g, Federal depository msurance) or collaterahzed v.~th securities held by the School D1stnct or by the School D1stnct's agent m the School D1stnct's name
Category 2 - Cash collaterahzed with securities held by the pledgmg financial mstltutwn's trust department or agent m the School District's name
Category 3 - Uncollateralized depo~1t~ (This mcludes any bank balance that 1s collaterahzed with securities held by the plcdgmg financial mstltutJOn, or by its trust department or agent but not m the School D1stnct's name )

I he School D1stnct's deposits are classified by nsk category at June 30, 2002. as follows

Risk Category

Bank Balance

$ 400,000 00

2

701,2I6 15

3

14,920,567 78

I otal

$16.02 ),783 .93

CA 11::.GORIZATION OF INVES'l MENTS Investments are classified as to nsk by the three categories de~cnbed below

Category I - Insured or registered. or securities held by the School D1~trict or the School D1stnct's agent m the School D1stnct's name
Category 2 - Uninsured or unregistered, with secunues held by the counterparty's trust department or agent m the School Distnct's name
Category 3 - Unmsured or unregistered. with secunties held by the countcrparty. or by Its trust department or agent but not m the School District's name

At June 30. 2002. the carrymg value of the School District's total mvestments was $12.473.8 I 1.22 which 1s materially the ~ame as fatr value The mvestmcnts are classified as to nsk categoncs as follow~

I vpe ol ln\C~lmcnt U ", Government
Local Government lnvec;tment Pools
l otal Investments

Cart) mg

Fair

3

Amount

Value

S,j,._J,SJ,,l.,21 S._ _-'0"'.00"" S__Q.QQ S S 186 !tt/3 22 S S 38b 003 22

7,087.808 OU 7 087,808 00
Sl2 473 SJ 1..i2 SJ1.41J.8ll 22

- 15 -

- - - - - - - - - - - - - - - --- - --- --

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY
NOTES TO THE GENERAL-PURPOSE FINANQAL STATEMENfS
JUNE 30, 2002

EXHIBIT"D"

Note 2 DEPOSITS AND INVESTMENTS
The carrymg amounts shown above mcludes amounts mamtamed man mvestment pool by the State ofGeorgia, Office ofTreasury and Fiscal Services in wluch the School D1stnct owns no identifiable secunties The mvestment policy of the State of Georgia, Office ofTreasury and Fiscal Services for the Local Government Investment Pool (Pnmary L1qu1d1ty Portfolio) does not provide for investment in denvalives or sumlar investments. A descnption ofthe Pnmary L1qu1d1ty Portfolio 1s as follows:
The Pnmary L1qu1d1ty Portfolio consists of Georgia Fund I, which 1s a combmation local and state government investment pool, and Fund 6 Georgia Fund I 1s a stable net asset value investment pool wluch follows Standard and Poor's cntena for AAAm rated money market funds The pool is not registered with the Secunlies and Exchange Comm1ss1on as an mvestment company but does operate Georgia Fund I in a manner consistent with Rule 2a-7 of the Investment Company Act of 1940 and 1s considered to be a 2a-7 hke pool The pool"s pnmary obJeclives are safety of capital, investment mcome, hqu1d1ty and d1vers1fica11on wlule maintaming pnnc1pal ($1.00 per share value) Net asset value 1s calculated weekly to ensure stab1hty The pool d1stnbutes earnings (net of management fees) on a monthly basis and values part1c1pant"s shares sold and redeemed based on $1 00 per share Pooled cash and cash equivalents and investments are reported at cost which approximates frur value The pool does not issue any legally bmding guarantees to support the value of the shares Part1c1palion in the pool 1s voluntary and deposits consist of funds from local governments, operating and trust funds ofGeorgia"s state agencies, colleges and umvers1t1es; and current operatmg funds of the State of Georgia's General Fund
Investments in Georgia Fund I and Fund 6 are d1rected toward short-term mstruments such as U S Treasury obhgalions, secunlies issued or guaranteed as to pnnc1pal and interest by the U. S Government or any of its agencies or mstrumentahlies, banker's acceptances and repurchase agreements. The weighted average matunty of Georgia Fund I may not exceed 60 days The weighted average matunty for Georgia Fund I on June 30, 2002, was O 12 years The average mvestment duration for Fund 6 on June 30, 2002, was 0.75 years
Note 3 NON-MONETARY TRANSACTIONS
The School D1stnct receives food commod11ies from the Umted States Department of Agnculture (USDA) for school breakfast and lunch programs These commodities are recorded at their Federally assigned value. See Note 1 - Inventories
Note 4 RISK MANAGEMENT
The School D1stnct 1s exposed to vanous nsks of loss related to torts, theft of, damage to, and destruction of assets, errors or om1ss1ons, Job related illness or inJunes to employees, acts of God and unemployment compensation.

- 16 -

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY
NOTES TO THE GENERAkPURPOSE FINANCIAL STATEMENTS
JUNE 30. 2002 -

EXHIBIT"D"

Note 4 RISK MANAGEMENT

The School D1stnct has obtamed commercial msurance for nsk ofloss associated with torts, assets, errors or om1ss1ons and Job related illness or mJunes to employees The School D1stnct has neither s1gruficantly reduced coverage for these nsks nor mcurred losses (settlements) which exceeded the School D1stnct"s msurance coverage many of the past three years

The School D1stnct has elected to self-msure for all losses related to acts of God The School D1stnct has not expenenced any losses related to this nsk m the past three years

The School D1stnct 1s self-insured with regard to unemployment compensation chums The School D1stnct accounts for clanns w1thm the same fund that the employee"s salary and benefits were paid Claims are accounted for With expenditure and hab1hty bemg reported when 1t 1s probable that a loss has occurred, and the amount of that loss can be reasonably estimated

Changes m the unemployment compensation claims hab1hty dunng the last two fiscal years are as follows

2001 2002

Beginnmg of Year L1ab1hty

Claims and Changes m Estimates

$

OQO $

7 378 52 $

$

000 $ 12J~3 80 $

Claims Paid

End of Year
Lrnb1hty

7 378 52 s

0 00

19,333 80 $

0 00

The School D1stnct has purchased surety bonds to provide additional insurance coverage as follows

Position Covered

Amount

Supenntendent All Other Employees

$ 100,000 00 S 25,000 00

Note 5 OPERATING LEASES

City of Dalton Board ofEducat10n has entered mto vanous leases as lessee for pupil trarisportallon, eqwpment and bmldmgs These leases are considered for accounting purposes to be operatmg leases Lease expenditures for the year ended June 30, 2002, amounted to $1,511,700 79 Future mm1mum lease payments for these leases are as follows

Year Endmg

Amount

2003

$ 1,092.360 8 I

- 17 -

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2002

EXHIBIT"D"

Note 6 GENERAL LONG-TERM DEBT

CAPJTAL LEASES The City of Dalton Board of Education has entered into two agreements with the City of Dalton Building Authonty for the purpose ofacquiring, constructing and equipping bwldings and facilities Under the terms of the agreements the School D1stnct will assure that payments of principal and interest on the City of Dalton Bwldmg Authonty Revenue Bonds (Dalton Public School System Project), Series 1997 and Senes 2000 are made in a timely manner through July I, 2004 and March I, 2015, respectively. Add1tiona!Jy the City of Dalton Board ofEducation has entered into an agreement with the City of Dalton (Mumc1pal1ty) for the purpose of acquinng land on which Mumc1pal1ty and School District recreation facilities are to be constructed, with some recreation
fac1lilles to be shared by both parties and the purchase pnce of said land to be paid Jointly.

These lease agreements qualify as capital leases for accounting purposes, and therefore, have been recorded at the present value ofthe future m1mmum lease payments as ofthe date oftheir inception.

GENERAL OBLIGATJON DEBT OUTSTANDING General Obligation Bonds currently outstanding are as fo!Jows

Purpose

Interest Rates

Amount

General Government - Series 2002

3.00"/o - 4.5% $ 14,770.000 OQ

The changes m General Long-Term Debt during the fiscal year ended June 30, 2002, were as fo!Jows

Balance JUI) I. 200 I

~amtal L~~

Cny of Dalton

City of Dalton

8!J1ld1ng OMth2aQ'.

Myn1c1~l1JY

Sencs 1997 Sencs2000 Purchase of Land

General Obhgat1on
Bonds

Total

s S 6.230,000 00 S 6,470,000 00

000 s

000 S12 700.000 00

Retroactive Restatement of Pnor Ycar Balances

I,!84,452.09

I JS:145209

Balance July I, 2001 Restated

s S 6,230.000 00 S 6,470.000 00 S 1.18445209

000 $13,884.452 09

Additions GO Bonds

14,770,000 00 14,770,000 00

Deductions Debt Ret~
BalanccJuneJ0,2002

4,09000000 33S 000 00

76,099 17

4SOJ09917

S 2 l~IH!~ ~ S ~ !JS~~ S I IDB l~Z 2l s1:1 zzu ggg llO S24 ISl 352.22

At June 30, 2002, payments due by fiscal year which includes principal and interest for these items are as fo!Jows:

- I8 -

CITY OF DALTON BOARD OF EDUCATION WI-ITTFTELD COUNTY
NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

Note 6 GENERAL LONG-TERM DEBT

Fiscal Year Ended June 30

Capital Leases

General Obligation
Bonds

Total Debt

2003 2004 2005 2006 2007 2008 2012 2013-2015

$ 3,029,972 18 794,187 18 791,667 19 793,237 19 793,637 19
3,965,089 41 2,078.477 27

$ 513,370 00 513,370 00
2,951,245 00 4,384,045 00 4,412,410 00 4,222,925 00

$ 3,543,342 18 1,307,557 18 3,742,912 19 5,177,282 19 5,206,047 19 8,188,014 41 2,078.477 27

Total Pnnc1pal and Interest $12,246,267 61 $)6 997 365.00 $;29 243 632 61

Deduct. Imputed Interest

2,862,914 69

Net Present Value of Future
Mm1mum Lease Payments S 2 383,352.92

Note 7. SHORT-TERM DEBT

The Schoo) D1stnct issues tax anhc1pat1on notes m advance of property tax collect10ns, depos1tmg the proceeds m its General Fund Tlus short-term debt 1s to provide cash for operations until property tax collect10ns are received by the School D1stnct Article IX, Sect10n V, Paragraph V of the Constitution ofthe State ofGeorgia hm1ts the aggregate amount ofshort-term debt to 75 percent of the total gross mcome from taxes collected m the precedmg year and requires all short-term debt to be reprud no later than December 31 of the calendar year m which the debt was mcurred

Tax Anttc1patlon Notes

Begmnmg Balance

Add1ttons

Payments

Endmg Balance

s___.,o"'."' s12 ooo ooo oo $ fi.!WQ ooo oo $ 4.000 ooo oo

Note 8 ON-BEHALF PAYMENTS

The School D1stnct has recogmzed revenues and expenditures m the amount of $527,870 41 for health insurance and retirement contnbutJons prud on the School D1stnct's behalf by the followmg State Agencies.

Georgia Department of Education Prud to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of$472,363 41

19

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTI'
NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30. 2002

EXHIBIT "D"

Note 8. ON-BEHALF PAYMENTS

Office of Treasury and Fiscal Serv:Jces Pmd to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer"s Cost In the amount of$55,507.00

Note 9: SIGNIFICANT COMMITMENTS

The followmg 1s an analysis ofs1gmficant outstandmg construction orrenovatlon contracts executed by the School D1stnct as of June 30, 2002.

Pr01ect

Unearned Executed Contracts

New City Park Renovations and mod1ficalions to Westwood Elementary School, and mod1ficalions to Brookwood Elementary School, Roan Elementary School and Dalton High School

$ 189,762 75
2,773,715 05
s 2,963,477,80

The amounts descnbed m this note are not reflected m the general-purpose financial statements

Note IO CONTINGENT LIABILITIES

Amounts received or receivable pnnc1pally from the Federal government are subject to audit and review by grantor agencies This could result m requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms The School D1stnct believes that such d1sallowances, 1f any, will be 1mmatenal to its overall financial position

Note 11 SUBSEQUENT EVENTS

On May 1, 2003, the City of Dalton Bmldmg Authonty issued Qualified Zone Academy Bonds (2003 Senes) on behalfofthe School D1stnct m the amount of$2,000.000 00 Proceeds ofthe bonds are to be used for the purpose of financmg the costs of certmn capital outlay projects cons1stmg of renovalions and modtficat.Ions at Roan School, mcludmg but not hm1ted to lightmg, HVAC, safety and secunty and kitchen improvements, as well as renovalion-related technology and paymg the costs of issuance of the Senes 2003 Bonds

- 20-

CITY OF DALTON BOARD OF EDUCATION WHITFIELD COUNTY NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT"D"

Note 12 ACCUMULATED EMPLOYEES' LEAVE

The School D1stnct's adrn1mstrallve staff and certam other full-lime employees earn up to one and one-third days per month ofvacallon leave Upon separallon, an employee will be paid for earned, but not used, vacal!on days dunng the previous twelve months Vaca!lon days, not used by December 3I, followmg the fiscal year ID winch they are earned, will be forfeited See Note l Compensated Absences

Note 13 RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (fRS)

TRS PLAN DESCRIPTION Substantially all teachers, adrn1mstrallve and clencal personnel employed by local school d1stncts are covered by the Teachers Rellrement System of Georgia (TRS), winch 1s a cost-shanng mulhple employer defined benefit pens10n plan TRS provides service rellrement, d1sab1hty retirement and survivors benefits for its members ID accordance with State statute The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtamed from the Georgia Department of Audits and Accounts.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School D1stnct who are covered by TRS are reqwred by State statute to contnbute 5% oftheu gross eam1Dgs to TRS The School D1stnct makes monthly employer contnbuuons to TRS at rates adopted by the TRS Board of Trustees m accordance with State statute and as advised by their mdependent actuary The reqmred employer contnbullon rate 1s 9.24% and employer contnbullons for the current fiscal year and the precedmg two fiscal years are as follows

Fiscal Year

Percentage Contnbuted

Reqmred Contnbullon

2002 2001 2000

100% 100% 100%

$ 2,428,782 21 S 2,923,583 78 $2,699,914 92

- 21 -

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30. 2002

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
lnventones Food Donated CommodrtJes Purchased Food

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

154,785 26 $

100,742 10

62,864 73

14,260 86

38,647 57 12 512 43

Total Assets

$

LIABJLJTJES AND FUND EOUJJY
LIAB1LITJES
Cash Overdraft Accounts Payable Salanes Payable Expired Grant Balances Payable Due to Other Funds Deferred Revenue
Total LJabilrtJes
FUND EOUIJY
Fund Balances Reserved For lnventones Food Donated CommodrtJes Purchased Food Unreserved Undeslgnated
Total Fund Equity
Total LiabllrtJes and Fund Equity
See notes to the general-purpose financ,ai statements
-22 -

$

16,100 87

52,641 23

32 000 00

$

100,742 10

$

38,647 57

12,512 43

23191085 $

000

$

283 070 85 $

000

$

283.070 85 $ _ _1;.,;00;;;,..;.7.;,42;;..;;10;;...

EXHIBIT "E"

FEDERAL PROGRAMS

TOTALS

JUNE 30, 2002

JUNE 30, 2001

$

255,527 36 $

284,051 23

62,864 73

61,661 77

$

515,658 85

529,919 71

1,330,785 47

38,647 57 12 512 43

43,967 74 1080176

$

515,658 85 $

899471 80 $ 1 73126797

$

332,33513 $

332,335 13 $

768,96887

53,614 07

69,714 94

151,737 82

124,363 30

177,004 53

430,016 90

4,090 24

4,090 24

9,186 92

41,985 86

32 000 00

534 55

$

514 402 74 $

615 144 84 $ 1,402,430 92

$

$ _ ___,1.,2"'56"'--'1-'---1

$

125611 $

38647 57 $ 12,512 43

43,967 74 10,801 76

233,166 96

274 067 55

284,326 96 $ ------'3"'2"'8,_,8,,,3.,_7-"05"--

$

515,658 85 $

899 471 80 $ 1,731,267 97

-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. 2002

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educat10nal Media Services General Adm1mstrallon School Admin1strat1on Maintenance and Operabon of Plant Student Transportat10n 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) Expendrtures
FUND BALANCE JULY 1
Food Inventory - Net Change 1n Penod Donated Commod1t1es Purchased Food

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

128,226 00 $

1,359,172 61

388 683 64

$ 1,876,082 25 $

741,011 79 74101179

$

661,06662

80.120 03 703 21

$ 1 916 160 17

$ 191616017 $

$

-40,077 92 $

74188986 -878 07

$

-40,077 92 $

326,758 27

-5,320 17 1 710 67

878 07
0 00 000

FUND BALANCE JUNE 30

$

283 070 85 $ =~~=0=00=

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

EXHIBIT "F"

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$

869,237 79 $ 2,799,534 25

$ 2,288,848 30

3,648,020 91

3,922,611 94

15 883 63

404 567 27

404 467 91

$ 2,304,731 93 $ 4,921,825 97 $ 7 126 614 10

$ 1,557,692 65 $ 2,218,759 27 $ 3,497.407 44

274,089 08 347,324 66
41,984 50 40,455 94
3,13875
23,220 10 17,802 36

354,209 11 348,027 87
41,984 50 40,455 94
3,13875
23,220 10 17,802 36 1 916 160 17

855,886 02 939,433 13
43 064 52 130,167 69 179,564 39
52,876 28
24,204 69 1,734,254 43

$ 2,305,708 04 $ 4 963 758 07 $ 7,456,858 59

$

-976 11 $

-41,932 10 $

-330244 49

153 44

1 031 51

285,881 35

$

-822 67 $

-40,900 59 $

-44,363 14

2,078 78

328,837 05

361,565 21

-5,320 17 1 710 67

3,765 77 7 869 21

$

125611 $

284 326 96 s_....,3.2.=8"".8=31=0=5'-

- 25 -

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 2002

ASSETS Cash and Cash Equrvalenls Investments Accounts Recervable
Tolal Assets
LIABILITIES AND FUND EQUITY LIABILITIES
Cash Overdraft Accounts Payable Contracts Payable Retarnages Payable
Total Lrabrlrbes FUND EQUITY
Fund Balances Reserved For Local Caprtal Outlay Projects For Purposes of Bond Issue For SPLOST Projects Unreserved Undeslgnaled Total Fund Equrty
Total Lrabrlrbes and Fund Equity

REGULAR

BOND PROCEEDS

$ 1,110,26664

2,126,52608 $ 14,855,10248

154 840 14

$ 3,236,792 72 $ 15,009,942 62

$

710,945 81

972,188 80 105 599 12

$ 1 788 733 73

$ 2,126,526 08 $ 13,221.208 89

1,110,266 64

0 00

s $ 3,236,792 72

13,221,208 89

$ 3,236,792 72 $ 15,009,942 62

See notes lo the general-purpose financial statements - 26-

EXHIBIT"G"

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

JUNE 30, 2002

JUNE 30, 2001

$

000 $

380,051 42 $ 1,490,318 06 $ 3,248,030 61

5,360,763 56

22,342,392 12

13,456,079 18

154 840 14

1457349 80

$ _ _ _ _0__00_ $ 5.740.814 98 $ 23.987,550 32 $ 18.161.459 59

$

710,945 81 $ 2,869,458 61

98,917 62

972,188 80

398,454 83

$

235,918 05

341 517 17

140 429 95

$

235,918 05 $ 2,024,651 78 $ 3,507,261 01

$ 2,126,526 08 $ 2, 164,283 77

13,221,208 89

$ 5,504,896 93

5,504,896 93

10,314,214 83

$

000

000

111026664

2,175,699 98

$

000 $ 5,504,896 93 $ 21,962,898 54 $ 14,654,198 58

s~====-0...0.0... s

s 51740.814 98 $ 23.9871550 32

18.161,459 59

- 27 -

cax OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY
COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES CAPITAL PROJECTS FUND YEAR ENDED JUNE 30 2002

REVENUES
State Funds
Taxes
Other Funds
Total Revenues
EXPENDITURES
Current Support SeMces Busmess Adm1nistrat.Jon
C&prtal Outlay Land and Land Improvements Building and Building lmp,ovements Equipment
Debt Serv,ce PnnClpBI Interest
Total Expendrtures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES IUSESl
Premiums on Bonds Sold Proceeds from General Obhgabon Bonds
Par Value
Operabng Transfers In Ope,abng Transfers Qui
Total Other Financing Sources (Uses)
Excess of Revenues end Other Fmanang Sources over (under) Expendrtures and Other Fmancmg Uses
FUND BALANCE JULY 1
FUND BALANCE JUNE 30

REGULAR

BOND PROCEEDS

$ 1,034.592 82 $ $ 1,034.592 82 $

178 748 31 178 748 31

$

1.300 00 s

168.460 89

112.238 58

1.788,733 73

$

113.538 58 $ 195719462

$

921.054 24 $ -1 778 446 31

s

22965520

14,770 000 00

$ -2.024.245 27

$ -2.024.245 27 $ 14,999,655 20

s $ -1,103,191 03

13,221,208 89

4,339.983 75

000

$

See notes to the general-purpose financial statements

-28

EXHIBIT"H"

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$

636,462 90

$

s 000

3,619,667 48 $ 3,619,667 48

4,928,422 93

1,057,938 89

2 27128002

853 221 19

$

000 $ 4,677,606 37 $ 5 890 947 50 $ 6,418,107 02

$

6,013 57 $

175,774 46 $

1,942 04

$

55,628 31

659,014 67

15,121 40

80,905 51 4,402,525 63
697,060 14

136,533 82 6 962,512 61
712,181 54

11,229,588 59 33,97620

7,960 82 6 047 62

4,158,138 35 350,422 89

4,166,099 17 356 470 51

3,890,000 00 493160 00

$

743 772 82 $ 9,695,066 09 $ 12,509,572 11 $ 15,648,666 83

$

s -743 772 82 $ -5 017 459 72

-6,618,624 61 $ -9,230,559 81

s

229,65520

$

743,772 82 s

951,914 64

-743 772 82

14,770,000 00 1,695,687 46 $ -2 768 018 09

6,311,180 01 -5,211,180 01

$

743 772 82 s

208 141 82 $ 13,927,324 57 $ , 100,000 00

s

s 000 $ -4,809,317 90

7,308,699 96 $ -8, 130,559 81

000

10,314,214 83

14,654,198 58

22,784,758 39

$

000 S 5,504,896 93 $ 21,962,898 54 S 14 654198 58

29-

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FIDUCIARY FUND TYPE - AGENCY FUND YEAR ENDED JUNE 30. 2002

EXHIBIT "I"

FAMILY CONNECTION ASSETS
Accounts Recervable
LIABILITIES Cash Overdraft Funds Held for Others

BALANCE JULY 1, 2001

ADDITIONS

DEDUCTIONS

BALANCE JUNE 30, 2002

$

1339075 S _ _=1=3~0=3=2E53=

$ 13.390 75 $ 63.240 77 $ 50,208 24

63,598 99 $ 50,208 24

13,032 53 000

$ 13,390 75 $ 113 449 01 $ 113 ao1 23 s ==--13_,.10_3.2._5_3_

See notes to the general-purpose financtal statements - 30 -

CITY OF DALTON BOARD OF EDUCATION WHITFIELD COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30 2002

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Agnculture, U S Department of Child Nutnbon Cluster Pass-Through From Georgia Department of Educabon Food and Nutrrtton Program Food Sennces School Breakfast Program Nabonal School Lunch Program
Total Chlld Nutntton Cluster
Other Programs Pass-Through From Georgia Department of Educabon Food and Nutnl!On Program Food Dtstr,butJOn Program ( 1)
To1al U S Department of Agnculture
Corporauon for Nabonal and Community Service
Pass-Through From Georg'-5 Department of EducatKm Leam and Serve Amenca School and Community Based Programs
Educabon, U S Department of Direct B1Hnguar Education Cluster Elementary and Secondary Educatk>n Act. Program ~elopmen1 end lmplementabon Grant System-Wide lmprovement Grants
Total B1lmgual Education Cluster
Special Educauon Cluster Pass-Through From Georgia Department of EducabOO lndMCluals wrth D1sablhbes EducaUon Act Pan B - Speaal Educabon Flow Through Capacrty BuJldlng lmprovemem Preschool
T01al Special Educauon Cluster
Other Programs Pass-Through From Georgia Department of Educabon Elementary end Secondary Education Act
Trtlel
Grants to Local Educational Agencies Title II
Eisenhower Profess10nal Development Tille VI
lnnovat10n Educauon Program Strategies Class Size ReducbOn
nuev11
Emergency Immigrant Edocation

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

10 553 10 555

NIA

s 296 941 53

(2)

NIA

s 965-44541

1 819 374 50 (3)

s 1,282 386 94 s

1 819,374 50

10 550

NIA

96 785 67

96 785 67

s 1,359172 81 s 1916160 17

94 004

NIA

s

3 196 99 s

3,196 99

84 288 84 291

s 60 000 00 s
35 000 00
$ 95 000 OD s

80 000 00 35 000 00
95 000 00

84 027 84 027 84 173

NIA

s 338 001 63 s

NIA

160,68817

NIA

37 829 00

s 536 51940 s

338 001 63 160 68817 37 829 00
536 519 40

84 010 84 281 84 298 84 340 84 162

NIA

s 968 947 13 s

NIA

21 951 69

NIA

33,970 00

NIA

147,577 OD

NIA

11500835

968 947 13 21 951 69
33 970 OD 147 730 -44 (3) 115 006 35

- 31 -

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30 2002

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Educ:abOn U S Department of Other Programs Pass-Through From Georgia Department of Education Educate Amenca Act Goals 2000
Safe and Drug-Free Schools and CommuntUes Stewart B McKinney 1-iomeless AsSIStance Act
Educabon for Homeless Children and Youth Vocat:Jonal Educaboo - Basic Grants to States
High School Program Basic Grant
Pass-Through From Ptoneef ReglOOBI Educa1J008l Ser,,,ce Agency d/bla Pl8dmon1 Migrant EducabOn Agency Bementary and Secondary EducabOn Act Tltlel Migrant Education
Total Other Programs
T0181 U S Department of Education

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

84 276 6<4 186 6<4 196
84 048

NIA

$ 93 526 23 $

NIA

67 943 67

NIA

,4{) ODO 00

NIA

45 201 98

93 526 23 6<4,6<49 97 (3) ,4{),000 00
45 201 98

6<4 011

NIA

120,005 88

120 005 88

$ 1654131 91 $

1 670 991 65

$ 2 285,651 31 $

2 302 511 05

Total Federal F1nanC1el AsBIStance

S 3,648 020 91 $ ___ _22_1__88_8 _21_

NIA Not Available

Notes to the Schedule gf Expendflures gf Federal Awards

(1) The amounts shown for the Focxt Olstnbubon Program represents the Federally ~ned value of nonmonetary 868Jstance for donated commodrtNts recerved end/or consumed by the system during the current fiscal year
(2) Expenditures for the School Breakfast Program _,, not mamtemed separately er<! ere mcluded In the 2002 Nabonal School Lunch Program
(3) Expendrtu'es for this program include 51ate and/or Other Funds Expenditures are not maintained by fund source

Ma,or Programs ere Identified by an astensk (") ., front of the CFDA number

The School D1stnd did not provide Federal Assistance to any SubreClpient

The accompanytng schedule of expenditures of Federal awards 1nciudes the Federal grant actrvrty of the Crty of Dalton Board of EducabOn and 1s presented on the modified accrual basis of accounting which 1s the basis of accounting used In the presentabon of the general-purpose flnancial statements

See notes to the general-purpose finanaal statements

- 32 -

CITY OF DALTON BOARD OF EDUCATION 1/fHITflELD COUNTY SCHEDULE OF STATE REVENUE
YEAR ENDED JUNE 30 2002

SCHEDULE "2"

AGENCV/FUNPING

GRANTS
Eduaruon, Georgia Department of
Quality Basic Educabon Dlred lnstructlonal Cost Kindergarten Prag""" Kindergarten Program Earty Intervention Program Pnl118!}' Grades (1-3) Program Primary Gr-. Early ln1erven1lon (1-3) Progrom Upper Elementary Grades (4-5) Program Upper Elementary Grades Early Intervention (,4.5) Program Middle School (,;.,,) Program High School General Educabon (9-12) Program Vocabona! Labora1ory (9-12) Program Stuclena with O.aabilrtoes
Ca1egory I
Category II Galago,y Ill GatagorylV
Gatagory V Gdled Sludon1 Galagory VI
Romodlal Educabon Program Alemabve Educabon Program Engbllh SpeakaB of Other Languages (ESOL)
Medlll Center Program Staff and ProteSSIOl'l81 Dovalopl11et1l Twenty Daya AddlhOnal lnstrucbOn lnchrec:t Cost Calegoncal Gnlnt> Pupil TransportabOn
Regular Bus Reptacemon1 Spa,o1ly NursingSeMCea Pnnapal SupplementS Vocabonal SupervLS<ln Deferred Summer Salanea (Pnor Year) De1emtd Summer Salanes {Current Yenr) Food SeMces VocabonalEducabon
Othar State Programs Apprenbcellhlp Program Health Insurance Montor T -
Pos1 Secondary Opt,on Spmg
Preschool HandtCBpped Program Sta,_ After School Program (4-8) Sla1awlde Reading Program (K-3) Lotteryp_...,,. Appl18d TOCMOiogy Labs Au1sllve Technology Computel'll m the Ctesaroom

Offlce of Sd,ool ReadlrlUI

Pr&-Klndergarten Program

Em- Office of Treasury nd Fiscal Servk:ea

PubllC School

Raw.nen1

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

s 1 688 525 00
57,732 00 3 230 883 DO
207 459 00 1,531 027 00
102 681 00 2 388 347 DO 1959,19300
555,535 00
103 189 00 367 902 00 977 251 00 188 059 00
69 376 00 688 356 DO
42 747 00 182 928 00 1991,64300 486 216 00
92 188 DO 136 697 00 2 973 196 00

s 1,688 525 00
57 732 00 3,230 863 00
207,459 00 1,531 027 00
102,681 00 2 388 347 00 1 959 193 00
555 535 DO
103 189 00 387 902 DO 977 251 00 166 059 00
69,376 00 688,356 00
42 747 00 182 928 00 1,99164300 486,216 DO
92 188 00 136 697 00 2 973,198 00

268 669 00 69 295 DO 35 889 DO 123 3B7 00 24,481 00
26 617 00 2 872 971 78
2 905,227 00
s
21 141 26

12822600

33,529 27 472 363 41
1132200 2 673 00
64,759 14 49,678 19 88 227 33

99 471 00 8 713 59
14167911

266 889 DO 69 295 00 35 889 DO
123 387 00 24 481 00 26 617 00
2 972 971 78 2,905 227 00
128 226 00 21 141 26
33 529 27 472 363 41
11,322 00 2 673 00
64 759 14 49,678 19 68 227 33
99 471 00 8 713 59
141 87911

481 148 09

481,148 09

55 507 DO

55 507 00

See notes to the general-purpose fnancl I statements

s s s 21 1255110382

869 237 79

22 124.341 61

33.

C!TY OE DALTON BOARD OE EDUCATION - WHITFIELD COUNTY SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30 2002

SCHEDULE "3"

PROJECT
New Elementary School parking areas grounds. furnishings, eq1.1pment and fixtures

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED
COSTS (2)

M'IOUNT EXPENDED IN CURRENT YEAR (3) (4)

AMOUNT EXPENDED
IN PRIOR
YEARS (3) (4)

PROJECT STATUS

s s s 5,968 346 00 $ 7 745 967 78

240 747 25

7 505 220 53 Completed

New Middle School, parking areas grounds fumishlngs eqL.Ppment end fixtures

9 789 268 00 16 266 760 89

743,772 82 15 522 988 07 Completed

Renovations and moddicallons of exrstmg schools lncludlng conversK>n cl Dalton Junior High School to an mtenned&ate school renovatJon of Brookwood Sdlool, Westwood School and Dallon High School and the upgrading of commurucallons equipment and a fiber optlcnetworl<

5 202 427 00

12 379 069 79

5 358 305 27

6 714 464 52 O,_no

Retlntrnent of pnMOUsly 1no.1rred debt wrth respect to capl\al ou\\ay projocta ol tho Crty ol Dalton PubllC School System conslstlng of S6 720,000 00 City ol Dolton Budding Authonty (Georgoa) Revenue Bonds Senea 2000

6 870,000 00

6 870 000 00

Ongoing

Addrbons, renovabons and moddications at extsbng schools and other facillUes lnc:ludLng the acqutsltlon of any furniture, fix1ls8s and eqU1pment necessary or des1rabkt therefor, end ayatam Wide technok>gy improvements

17 180 581 00 17 180 581 00 1 957 194 62

Ongoing

$ 45 0101620 00 $ 60 442 379 46 S 8,300 019 96 S 29 742 673 12

(1) The Sdlool Dlatncfs onginal cost eslfflate as specified 1n the resolution cal~ng for the 1mposmon of the Local Opllon
SalesTax

(2) The School Olstrk:t's current estunate of total cost for the prOfBdS lndudes au cost from pro,ect nc:epOon to c:ompletJon

(3) The voters of the Crty of DaJton and Whrtfield County approved the 1mposlb0n of a 1% sales tax to fiDld the above pr0jeCtS Amounts expended for these pro,18dS may llldude sales tax proceeds, state local property
taxes andlor other funds over the hfe of the prqects

(4) In addlbon to the expenctlture:s shown above the School Drstnc:t hes anc:urred interest to proV1de advance funding for the above pr0fBCtS as follaNs

Pnor Year.,

S 2 574 726 24

Current Year

626 307 50

Total

S 3 201 033 74

See notes to the general-purpose finanaal statements

- 35 -

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM COBEl ALLOTMENTS AND EXPENDrTURES - BY PROGRAM YEAR ENQED JUNE 30 2002

SCHEDULE "4"

DESCRIPTION

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

Olred lnstrucilonal Programs

Kindergarten Program

$

Kindergarten Program-Early ln1erven1lon Program

Pnmary Grades {1-3) Program

Primary Grades-Earty lntervenbon (1-3) Program

Upper Elomon1ery Grades (4-5) Program

Upper Elementary Grades-Early lntervenUon (4-5)

Program

Middle School (~) Program

H,gh School General Education (9-12) Program

Vocational Laboratory (9-12) Program

Students wrth Dlsebllllles

Category I

Category II

Category Ill

Category IV

Category V

Gifted Student - Category VI

Remedt.al Education Program

Altematlve Educatlon Program

Englloh Speakers of Other Languages (ESOL)

2,134 937 00 $ 72,995 00
4085,03900 262,30800
1 930,896 00

2 328,654 24 $ 59,052 15
4,745,379 57 230,417 33
2,507,252 50

179,701 35 $ 2 597 48
398 51041 4 632 97
158 237 33

2,508 355 59 81,849 63
5,143,889 98 235 050 30
2,665 489 83

134,732 00 3 019,779 00 2,477,165 00
702,408 00 2. 128,937 00
867,815 00 84,048 00
231,290 00 2,518194 00

11481266 3,691,428 13 3,060,711 31
704,800 46
130, 19-4 89 282,238 18 1,727,43118 222,797 61
77,078 88 934 340 87 140,753 12
72,030 32 2 28-4 171 8-4

401 44 199 163 23 218,486 57 352,866 55
4,271 59 1179302 11083403 21 047 92
7,909 93 23,493 29
2,984 69 250,148 82
98,084 75

11521410 3 890 589 36 3,279 197 88 1 057 667 01
134 466 48 294,031 20 1 838 265 19 243,845 53
84,986 61 957,834 18 143,717 81 322,17914 2,380,236 59

TOTAL DIRECT INSTRUCTIONAL PROGRAMS

$

20,620,843 00 $ 23,313 841 02 $ 2,043,125 37 $ 25,356,668 39

Media Center Program Staff and Professk>nal Development

614 761 00 116 561 00

833,470 86 92 319 06

131,559 36 338,607 9-4

965 030 22 430 927 00

TOTAL QBE FORMULA FUNDS

$

21 351 865 00 $ 24 239,330 94 $ 2,513,292 67 $ 26,752 623 61

(1) Comprised of State Funds plus Local Five Mil Shara

See notes to the general-purpose financial statements

- 36 -

CITY OF DALTON BOARD OF EDUCATION -WHITFIELD COUNTY GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM /QBE}
ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30. 2002

SCHEDULE "5"

SITE Park Creek Elementary School Westwood Elementary School Dalton Mtddle School Crty Park School Brookwood Elementary School Roan Elementary School Dalton High School Central Office (AltemabVe Educabon Program)
TOTAL
(1) Compnsed of State Funds plus Local Five M,11 Share

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

2,014,554 00 $

2,483,889 70

2,035,162 00

2,687,417 87

4,262,171 00

5,169,12046

2,834,325 00

3,457,237 24

1,864,166 00

2,396,649 06

2,272,175 00

2,773,565 34

5,106,700 00

6,066,508 63

231,290 00

322,278 09

$

20,620,543 00 $ 25,356,666 39

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

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

Ru~~H I W. H1N1 o:s
SlATE "'1JlJllOR
f,l(),&) 656-217

DEPARTMENT OF AUDITS AND ACCOUNTS
254 W.1.,hmglon ~1rcc1 S W Suite 214 i\tlJntJ, Georgia J0134-841Kl
June 13. 2003

Honorable Sonnv Perdue, Governor Members of the General Assembly Members of the State Board of Educatton
and Supenntendent and Members of the City of Dalton Board of Education
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDA RDS
Ladies and Gentlemen
We have audited the financial statements of City of Dalton Board ofEducat10n ~ ofand for the vear ended June 30. 2002. and have issued our report thereon dated June 13. 2003 Tots report was qualtfied for various departures from generally accepted accountmg prmc1ples. as 1den1tfied m the aud!lor's report on the general-purpose financial statements. We conducted our audit m accordance wllh aud1tmg standards generally accepted m the Umted States of Amenca and the standards appltcable to financial audits contained m Government Auditing Standards, issued by the Comptroller General of the Umtcd States
Compltance
As part of obtammg reasonable assurance about whether City of Dalton Board of Educauon's financial statements are free of matenal misstatement, we perfonned tests of its compltance with certam prov1s10n~ oflaws. regulat10ns. contracts and grants. noncompltance v.1th which could have a direct and matenal effect on the determmat10n of financial statement amounts However, prov1dmg an opmion on compltance with those prov1s10ns was not an obJecttve of our audit. and accordmgly. we do not express such an opm10n The results ofour tests disclosed no mstances of noncompliance that are reqmred to be reported under Government Aud1tmg Standards
We noted certam 1mmatcnal mstances of noncompliance. which we have reported to management of City of Dalton Board of Educallon ma separate letter dated July 29. 2003

2002YB-40

Internal Control Over Fmancial Reportmg
In planning and performmg our audit, we considered City of Dalton Board of Education's mternal control over financial reportmg m order to determme our auditmg procedures for the purpose of expressmg our opm1on on the financial statements and not to provide assurance on the mternal control over financial reporting. However, we noted certam matters mvolving the mternal control over financial reportmg and its operation that we consider to be reportable conditions Reportable conditions mvolve matters commg to our attention relatmg to s1gruficant deficiencies m the design or operallon ofthe mtemal control over financial reporting that, m ourJudgment, could adversely affect City of Dalton Board ofEducallon's ab1hty to record, process, summanze and report financial data consistent with assertions of management m the financial statements Reportable cond1t10ns are described m the accompanymg Schedule ofFindmgs and Quest10ned Costs as items FS-7721-02-01 and FS-7721-02-02
A material weakness is a condition in which the design or operation of one or more of the mtemal control components does not reduce to a relatively low level the risk that misstatements m amounts that would be material in relation to the financial statements being audited may occur and not be detected w1thm a timely period by employees m the normal course of performmg their assigned functions Our cons1dera1Ion of the internal control over financial reporting would not necessanly disclose all matters m the mternal control that might be reportable condtt10ns and, accordmgly, would not necessanly disclose all reportable cond1t10ns that are also considered to be material weaknesses All of the reportable cond1t10ns described above are considered to be material weaknesses
We also noted other matters involving the mternal control over financial reportmg, wluch we have reported to management of City of Dalton Board of Educatton m a separate letter dated July 29, 2003
Tlus report 1s mtended solely for the information and use of the management, members ofthe City of Dalton Board ofEducat10n, Federal awardmg agencies and pass-through enttt1es and 1s not mtended to be and should not be used by anyone other than these specified parties.

RWHas 2002YB-40

State Auditor

l.u,~~.1 1 W. H1N roN
STATE AUDITOR
(404) 656-217

DEPARTMENT OF AUDITS AND ACCOUNTS
254 WJshmgton Street.~ W !>u11c 214 AtlJnta. Georgia 30114-8400
June 13, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Supenntendent and Members of the City of Dalton Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULARA-133
Ladies and Gentlemen
Comphance
We have audited the comphance of City of Dalton Board of Education with the types of comphance reqmrements dcscnbed in the US Office of Management and Budget (0MB) Circular A-133 Compliance Supplement that are apphcable to each of its maJor Federal programs for the year ended June 30, 2002 City of Dalton Board of Education's maJor Federal programs are 1dent1fied in the Summary of Auditor's Results Section of the accompanying Schedule ofFmdings and Questioned Costs Comphance with the reqmrements of laws, regulat10ns, contracts and grants apphcable to each of its ma1or FederaJ programs 1s the respons1b1hty of City of Dalton Board of Education's management Our respons1b1hty 1s to express an opinion on City of Dalton Board of Education's compliance based on our audit
We conducted our audit ofcomphance in accordance with aud1tmg standards genemlly accepted m the Umted States of Amenca, the standards applicable to financial audits contamed in Government Aud1tmg Standards, issued by the Comptroller Geneml of the Uruted States, and 0MB Circular Al 33, Audits of States. Local Governments, and Non-Profit Orgamzallons Those standards and 0MB Circular A-133 reqmre that we plan and perform the audit to obtain reasonable assurance about whether noncompliance With the types ofcompliance reqmrements referred to above that could have a direct and matcnal effect on a maJor Fedeml program occurred An audit includes exarmnmg, on a test basis, evidence about the City of Dalton Board of Educal!on's comphancc with those reqmrements and performing such other procedures as we considered necessary m the circumstances We believe that our audit provides a reasonable ras1s for our opm1on Our audit does not provide a legal determination on City of DaJton Board of ducat10n's compliance with those requirements
2002SA-40

In our opimon, the City of Dalton Board of Education comphed, in all matenal respects, with the requirements referred to above that are applicable to each of1ts maJor Federal programs for the year ended June 30, 2002.
Internal Control Over Compliance
The management of City of Dalton Board of Education 1s responsible for establishing and maintaining effective internal control over compliance with reqwrements of laws, regulations, contracts and grants apphcable to Federal programs. In planning and performing our audit. we considered City ofDalton Board ofEducation's internal control over compliance with requirements that could have a direct and matenal effect on a major Federal program in order to determine our auditing procedures for the purpose ofexpressing our opimon on compliance and to test and report on internal control over compliance in accordance with 0MB Circular A-133
We noted a certain matter involving the internal control over compliance and its operat10n that we consider to be a reportable cond1t1on. Reportable conditions involve matters coming to our attenaon relating to s1gmficant deficiencies in the design or operat10n ofthe internal control over compliance that, in our Judgment, could adversely affect the City of Dalton Board of Educat10n's ability to adm1mster a major Federal program in accordance with applicable requirements oflaws, regulations, contracts and grants The reportable cond1t1on 1s descnbed in the accompanying Schedule of Fmdings and Questioned Costs as item FA-7721-02-01
A matenal weakness is a cond1t1on in which the design or operation of one or more of the internal control components does not reduce to a relatively low level of risk that noncompliance with the apphcable reqwrements oflaws, regulations, contracts and grants that would be matenal in relation to a major Federal program being audited may occur and not be detected w1thm a timely penod by employees in the normal course of performing their assigned functions. Our consideration of the internal control over comphance would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we beheve the reportable cond1t1on descnbed above 1s not a matenal weakness.
This report 1s intended solely for the information and use ofthe management, members ofthe City of Dalton Board ofEducat10n, Federal awarding agencies and pass-through entitles and is not intended to be and shouJd not be used by anyone other than these specified parties
--...espectfully submitted,
II WHm<o,~..J..:$.;;:
RWHas 2002SA-40

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

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY AUDITEE'S RESPONSE
SUl'vlMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2002

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-7721-00-02 FS-7721-01-01 FS-7721-01-02

Further Action Not Warranted Partially Resolved Unresolved - No Corrective Act10n hnplemented

CORRECTIVE ACTION/RESPONSES

INVESTMENTS REVENUE/RECEIVABLE/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS GENERAL LEDGER Inadequate Accounting Procedures Fmdmg Control Number FS-7721-01-01

Investments: A Journal entry was made m May, 2002 m the amount of $2,039,920 90 to correct the fund baJance The School D1stnct made aJournaJ entry for $9,450 00 m June, 2000 to correct the postmg error.

Revenue/Receivable/Receipts AJournaJ entry was made m October, 2001 m the amount of$105,506 46 to correct the posting error. A Journal entry was made m Apnl, 2002 m the amount of $450 00 to correct a clencal error

Expend1tures/L1ab1hhes/D1sbursements Appropnate Journal entnes were made m May, 2002 to correct entnes detected by auditors.

In the future, closmg work will be performed by the bookkeeper and discussed with the Director ofBusmess Services and Fmance pnor to the year end closmg of the books

GENERAL FIXED ASSETS Failure to Maintam General Fixed Assets Account Group Fmdmg Control Number. FS-7721-01-02

GASB Statement 34 will reqwre fixed assets trackmg effecllve July I, 2002 (fiscal year 2003) Therefore the School D1stnct hired an mdependent party to complete the m1hal vaJuahon of assets The School D1stnct's software vendor (SSlIT) has a module for fixed assets trackmg

- 1-

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2002

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FA-7721-00-05 FA-7721-00-06 FA-7721-01-01 FA-7721-01-02 FA-7721-01-03

Further Action Not Warranted Further Action Not Warranted Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Prev10usly Reported Corrective Action Implemented

-2-

SECTION IV FINDINGS AND QUESTIONED COSTS

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2002

I SUMMARY OF AUDITOR'S RESULTS

Type of Report Issued on the Financial Statements The auditor's opimon on the City of Dalton Board of Education's financial statements was qualified for various departures from generally accepted accounting pnnc1ples.

2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the City of Dalton Board of Education disclosed financial statement reportable conditions related to the following control categones

General Fixed Assets

General Ledger

All of the reportable conditions described above are considered to be matenal weaknesses.

3 Noncompliance Matenal to the Financial Statements The audit ofthe City of Dalton Board ofEducation disclosed no instances ofnoncompliance that were deemed to be material to the financial statements.

4 Reportable Conditions in Internal Control Over Ma10r Programs The audit report for the City of Dalton Board of Education disclosed a reportable condition in internal control over maJor programs for the following compliance reqmrement.

Special Tests and Provisions

The reportable condition dcscnbed above 1s not considered to be a matenal weakness

5 Type of Report Issued on Compliance for Ma1or Programs The auditor's op1mon on the City of Dalton Board ofEducalion's report on compliance With requirements applicable to maJor programs was unqualified.

6. Audit Findings Regwred to be Reported by Section .510(a) ofOMB Circular A-133 The City of Dalton Board of Educat10n's audit disclosed an audit finding required to be reported by section .51 0(a) of 0MB Circular A-133. This audit finding 1s included in section IV of this report.

7 Ma10r Programs Federal awards audited as maJor programs are as follows 10.553 Food and Nutrit10n Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program 84.010 Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies

- 1-

CITY OF DALTON BOARD OF EDUCATION - WtITTFIELD COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2002
I SUMMARY OF AUDITOR'S RESULTS
8 Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
9 Low Risk Aud1tec The City of Dalton Board of Education did not qualify as a low nsk aud1tee as defined by Section .530 ofOMB Circular A-133.
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL LEDGER Inadequate Accounting Procedures Reportable Condition - Material Weakness Repeated from Pnor Year Fmdmg Control Number FS-7721-02-01
Accounting procedures for City of Dalton Board of Education were msuffic1ent to provide adequate internal controls over Investments and the General Ledger. The School District did not reconcile investment account balances to the general ledger which resulted in audit adjustments totalmg $5,4 I9,507.08 which were necessary to reconcile the general ledger to the mvestment account statements
The audit adjustments were due to numerous journal entries made m error by the School D1stnct The audit adjustments corrected errors m the following accounts on the general ledger mvestments, fund baJance adjustments, mterest revenue, other sources ofrevenue and transfers out Several ofthe School Distnctjoumal entries were identified as transfers out but were incorrectly charged to a fund balance, revenue or an expenditure account Management's failure to ensure that supporting records are reconciled with the general ledger causes internal reports to be inaccurate and misleading.
This deficiency occurred because of mariagement's failure to establish adequate procedures to analyze and reconcile balances on the general ledger with supportmg records The School District should establish procedures to ensure that mvestment accounts are reviewed on a monthly basis and detailed records supportmg the general ledger are complete, accurate and reliable
Management's Response
The audit revealed that a journal entry had been written backwards m regard to the debit and credit The clencaJ error has been corrected A journal entry m the amount of$5,419,507 08 was made m June 2003 pnor to the close of the fiscaJ year 2002 field work by the auditors The School District does have procedures in place to analyze all financial accounts
-2-

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2002
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condillon - Malena! Weakness Repeated from Prior Year Finding Control Number: FS-7721-02-02
The City of Dalton Board of Education did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as reqwred by generally accepted accounting pnnc1ples Tlus condition results in the general-purpose financial statements of the School District being incomplete and not in accordance with generally accepted accounting pnnciples. Appropnate action should be taken by the School D1stnct to establish accountmg controls and procedures to provide for maintenance ofa General F1xed Assets Account Group These subs1d1ary records should include inventory of land, buildings and equipment owned by the School Distnct and should include, but may not be limited to, date acquired, acqu1sn1on cost, estimated replacement cost, locallon and description DetaJled records should be mamtaJned of all additions and deletions to the General Fixed Assets Account Group
Management's Response.
GASB Statement 34 will reqwre fixed asset tracking effective July I, 2002 (fiscal year 2003) for the Dalton Public School District Therefore, the School D1stnct hired an independent party to complete the m1t1al valuallon of the assets. The School District's software vendor lSSUI) has a module for fixed asset tracking
Ill FEDERAL AWARD FINDINGS AND QUl:.STIONED COSTS
SPECIAL TESTS AND PROVISIONS Inadequate Venfication Procedures Reportable Condition Nonmatenal Noncompliance U S. Department of Agriculture Through Georgia Department ofEducat10n Queslloned Costs. $677 87 Finding Control Number FA-7721-02-01
A review of the City of Dalton Board ofEducat1on's internal control policies and procedures over the Child Nutnuon Cluster Program (CFDA Nos IO 553 and I0.555) noted defic1enc1es in the required venficauon process. The USDA Elig1b1lity Guidance for School Meal Policy Manual states in part
-3-

CITY OF DALTON BOARD OF EDUCATION - WHITFIELD COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2002

III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

SPECIAL TESTS AND PROVISIONS Inadequate Venfication Procedures Reportable Condition Nonrnaterial Noncompliance U. S Department of Agnculture Through Georgia Department of Education Quest10ned Costs $677.87 Finding Control Number. FA-7721-02-01

"Acceptable written evidence for income eligible households contains the name of the

household member, amount of income received, frequency received, and the date the income

was received...

A collateral contact 1s a person outside of the household who is

knowledgeable about the household's circumstances and can give confirmation ofa household's

income."

Three of fifteen free and reduced priced meal applications tested for venficat10n did not have acceptable wntten evidence or collateral contact documented, dated and initialed. The School D1stnct failed to terminate benefits ofthe applicants resulting in questioned costs of$677 87 for the three errors noted above

This noncompliance occurred because the School District's management failed to ensure that appropnate controls were established in accordance with guidance provided in the USDA Eligibility Guidance for School Meal Pohcy Manual

The School Distnct should review the procedures in place, design policies and procedures that would enhance venficauon procedures and implement these policies and procedures to ensure adequate internal control over the Child Nutntion Cluster Program The Georgia Department ofEducat10n should review this matter and determine if any reclaim of funds 1s appropnate

Management's Response:

Venfication Procedures. In the event a family presents proof of income by check stub or other income documentation that does not match the names on ongmal application, the School Nutnt10n Authonty will obtain collateral contact to prove that the family member and the income receiver 1s one in the same. If such information 1s not provided, the benefits will be denied, and elig1b1lity for free and reduced meals will be stopped The family will be given a letter of notification statmg all benefits of all students will end in IO days The School Nutrition Authonty believes all children should receive all benefits they are eligible for We will make every effort to obtain collateral proof.

-4-