GA i ' . A~oo ~~- ,'RI 1;33 ,,', ~ - i .2oo~-, ' , a . ,,' ' ,_. .,.t ;.,.. - , _ -,..,:-srArE oF, .G::E-oRGL~ .' 'i ,, .,, .-.--oEPART''MEN.,r .oF Auo,ts ANo AtcouNrs J ff _-._ - , ' .,, I ,, .' ,,, . , , - ' ;, .- ' -.'..,. - -I .,, ' ., ' ! ' . , ' ,. , ' , .. ' '. ,) . , ' ' t ,. ' ' ,. ', ... .1,. '.,J " , \ \ r ~ ., -. r "I ...-. CITY-OFi.>ALTON BOARDO, .F EDUCATION,, ,WHITFIELD COUNTY, GEOR$IA . ' ,.,..' . ,, '< 1 ' ; , REPORT ON AUDIT.: OF-THE FINANCIAL STATEMENTS. 0 ' . FOR THE FI.SCA L.YEAR ENDED''JU' NE- 30. 2.002, ' . ,. J . ' . ' . ' , ' ' ', . , Russell w: Hlntoh .State Auditor ' '1"1-, . , ' . ' , . ., '' ,. ' '' 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 Obrt 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 - 5- CITY QF DALTON BOARD OF EDUCATION WHIIFIELP COUNTY COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND SAI..ANCES BUDGET AND ACTUAL 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 -7- 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 Pupil TransportabOn Regular Bus Reptacemon1 Spa,o1ly NursingSeMCea Pnnapal SupplementS Vocabonal SupervLSn 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