City of Decatur Board of Education, a component unit of the City of Decatur, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2000

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STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS



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CITY OF DECATUR BOARD OF EDUCATION
A COMPONENT UNIT OF THE CITY OF DECATUR, GEORGIA
REPORT ON AUDIT OF THE FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2000

Russell W. Hinton state Auditor

CITY OF DECATUR BOARD OF EDUCATION - DEKALB 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

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

.

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

2 SCHEDULE OF STATE REVENUE

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

ANALYSIS OF

EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

4

OVERALL

5

BY PROGRAM

Page
2
4 7
8
20 22
24
26
28
30 31 33 34

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY - TABLE OF CONTENTS -

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

SECTION ill

AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

S

Y SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS

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

SECTION I FINANCIAL


RUSSELL W. HINTON
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Stn:el. S.W.. Suile 214 All:.inla. Geor~ ia 30:; 34-X400
L
July 13, 2001

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Decatur Board of Education
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 accompanying general purpose financial statements of the City of Decatur Board of Education, a component unit of the City ofDecatur, Georgia, as of and for the year ended June 30, 2000, as listed in the table ofcontents. These general purpose financial statements are the responsibility of the City of Decatur Board of Education's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our

OpInIOn.
As described in the notes to the general purpose financial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:


2000ARL-13A

* The general purpose financial statements ofthe Board did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles.
* School activity accounts maintained at the individual schools are not included in the
general purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general purpose financial statements.
* The Board did not recognize as expenditures, in the year ended June 30, 2000, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2000. Also funds received, subsequent to June 30, 2000, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1999, were improperly recorded in the year ended June 30, 2000. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the City of Decatur Board of Education as ofJune 30, 2000, and the results ofits operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated July 13, 2001, on our consideration ofthe City ofDecatur Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of

our audit.
Our audit was performed for the purpose of forming an opinion on the general purpose financial statements of the City of Decatur Board of Education taken as a whole. The accompanying combining statements (Exhibits E through H) and the fmancial schedules (Schedules 1 through 5),
which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the
general purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and in our opinion, except for the effects ofthe matters referred to in the third paragraph, such information is fairly stated, in all material respects, in relation to the general purpose fmancial statements taken as a whole.
2000ARL-13A

A copy ofthis report has been filed as a pennanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 50-
6-24.
Respectfully submitted,

RWH:jb 2000ARL-13A

R ssell W. Hinton State Auditor


CI1Y OF DECATIJR BOARD OF EDUCATION - DEKALB COUNfY



CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY COMBINED BALANCE SHEET ALL FUND TYPES JUNE 30, 2000

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

GOVERNMENTAL FUND

SPECIAL

GENERAL

REVENUE

FUND

FUND

$ 7,899,692.05 $

390,832.45

7,871,401.15

10,000.00

702,062.88

118,806.69

8,472.97 5,220.61

Total Assets

$ 16,473,156.08 $ =~53~3~,3~32;;;;,.;,,;;72=

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retainages Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Continuation of Federal Programs For Inventories Food Donated Commodities Purchased Food For SPLOST Projects For State Capital Outlay Projects Unreserved Undesignated
Total Fund Equity

$

40,304.01 $

58,184.98

187,066.60

30,561.89

$

40,304.01 $ _--=-27~5~,8~1~3.~47!....

$

11,429.31

8,472.97 5,220.61

$ 16,432,852.07

232,396.36

$ 16,432,852.07 $ _ _~25~7..z.::,5~1~9.~25~

Total Liabilities and Fund Equity

$ 16,473,156.08 $ _ _5~3~3,332.72

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


EXHIBIT "A"

TYPES CAPITAL
PROJECTS
FUND

TOTALS

(Memorandum OnI0:-:----:-_

JUNE 30, 2000

JUNE 30,1999

$

905,667.72 $ 9,196,192.22 $ 3,091,811.45

7,881,401.15

8,436,634.31

763,601.52

1,584,471.09

4,600,000.80

8,472.97 5,220.61

12,566.77 4,619.83



$ 1,669,269.24 $ 18,675,758.04 $ 16,1451633.16

$

98,488.99 $

168,897.33

187,066.60

173,715.97

30,561.89

$

290,201.33

290,201.33

396,368.13

127,080.00

127,080.00

328,081.84

$

417,281.33 $

733,398.81 $ 1,067,063.27

$

11,429.31 $

394.85

$

987,109.06

257,100.65

8,472.97 5,220.61 987,109.06 257,100.65

12,566.77 4,619.83 1,517,223.41 38,983.00

7,778.20

16,673,026.63

13,504,782.03

$ 1,251,987.91 $ 17,942,359.23 $ 15,078,569.89

$ 1,669,269.24 $ 18,675,758.04 $ 16,145,633.16

- 3-

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES
YEAR ENDED JUNE 30, 2000

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

GENERAL FUND

SPECIAL REVENUE
FUND

$ 9,619,033.42 $
56,063.81 13,436,489.08
1,255,823.38
$ 24,367,409.69 $

667,978.33 2,187,802.02
417,456.77
3,273,237.12

$ 12,203,251.90 $
973,003.23 720,759.96 595,629.39 472,812.48 1,514,259.73 387,465.27 2,256,212.89 434,295.52 113,376.91 315,606.32 154,701.00
14,500.00

1,944,837.10
67,100.73 60,755.50
151,611.41 1,431.00
2,058.80 33,349.78
35,685.19 1,008,663.64

$ 20,155,874.60 $ 3,305,493.15 $ 4,211,535.09 $ _ _..::-3::.::2:.t.::,2::::5~6.~03~

$
$ -1,058,927.02

58,927.02

$ -1,058,927.02 $ _ _..:::5~8l::::,9~27:...:.;.0~2,"-

$ 3,152,608.07 $
13,280,244.00

26,670.99 234,341.28

-4,093.80 600.78

FUND BALANCE JUNE 30

$ 16,432,852.07 $ _-:2;,:;5;.:.7~,5.:.:19~.2~5~

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

EXHIBIT "B"

CAPITAL PROJECTS
FUND

TOTALS

(Memorandum Onl>1:-_ _

YEAR ENDED

JUNE 30, 2000

JUNE 30, 1999

$

21,516.00 $ 10,308,527.75 $ 11,896,658.86

2,243,865.83

1,926,370.76

2,870,134.69

16,306,623.77

12,041,324.15

33,052.06

1,706,332.21

1,699,422.41

$ 2,924,702.75 $ 30,565,349.56 $ 27,563,776.18

$ 14,148,089.00 $ 13,193,969.10

$ 4,236,699.45

1,040,103.96 781,515.46 595,629.39 624,423.89
1,515,690.73 387,465.27
2,258,271.69 467,645.30 113,376.91 351,291.51
1,163,364.64 14,500.00
4,236,699.45

1,126,679.04 736,681.27 552,213.03 880,003.21
1,406,851.14 342,946.66
2,274,159.24 441,422.84 129,765.07 104,689.99
1,118,129.12
4,148,594.41

$ 4,236,699.45 $ 27,698,067.20 $ 26,456,104.12

$ -1,311,996.70 $ 2,867,282.36 $ 1,107,672.06

$ 1,000,000.00 $ 1,058,927.02 $ -1,058,927.02

$ 1,000,000.00 $

0.00 $

125,422.24 -125,422.24
~O.~OO~

$

-311,996.70 $ 2,867,282.36 $ 1,107,672.06

1,563,984.61

15,078,569.89

13,980,264.44

-4,093.80 600.78

-5,569.90
-3l96.71

$ 1,251,987.91 $ 17,942,359.23 $ 15,078,569.89

-5-



CITY OF QI;CATUR BQARD QF I;.DUCATIQI'j - QEKALB CQUNTY COMlilIN~D STATEMENT QF R~NUES, EXP~QITURES AND CHAN~ES IN FUND I;!N.ANCES
I!UD~ET AND ACTUAL - INQN-GAAP lilASIS} ~ERAL AND SPECIAL REVENUE FUNDS
YEAR ENQ~ JUNE 30, 2000

EXHIBIT C"

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues

$ 8,934,477.00 $ 9,619,033.42

46,800.00

56,063.81

11,636,756.00

13,436,489.08

631,050.00

1,255,823.38

$ 21,249,083.00 $ 24,367,409.69

EXPENDITURES

Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Community Services Operations
Total Expenditures
Excess of Revenues over (under) Expenditures

$ 12,241.685.00 $ 12,203,251.90

1,027,596.00 740,782.00 612.691.00 462.827.00
1,538.863.00 455.198.00
2.941.724.00 521,253.00 156.441.00 356.716.00 193.307.00

973,003.23 720,759.96 595,629.39 472,812.48 1.514.259.73 387.465.27 2,256.212.89 434.295.52 113.376.91 315.606.32 154.701.00
14,500.00

$ 21,249,083.00 $ 20.155,874.60

$

....;O::.:..O~O:... $ 4,211,535.09

QTHER FINANCING SQURCES {USES}

Other Sources Other Uses
Total Other Financing Sources (Uses)

$ -1.058.927.02 $ -1.058,927.02

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

0.00 $ 3,152.608.07

FUND-.M.LAN CE JULY 1, 1999

13.227.738.82

13.280.244.00

Adjustments

1,499.46

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)~_

$

65,000.00 $

667,978.33

785,480.00

2,187,802.02

384,500.00

417,456.77

$ 1,234,980.00 $ 3,273,237.12

$ 1,944,837.10

67,100.73 60,755.50

151,611.41 1,431.00

2,058.80 33,349.78

$ 1.084.228.00

35,685.19 1,008,663.64

$ 1.084.228.00 $ 3,305,493.15

$

150,752.00 $ _--=:-3~2~,2::::5l!:6'.l:!:03~

$

58,927.02

$ _........:5::::8:.::,9~27:..:..~02=-

$

150,752.00 $

26,670.99

232.344.07

217,154.68

-763.99

FUr:m BALANCE JUNE 30. 2000

$ 13,229.238.28 $ 16,432.852.07

$

382,332.08 $ _~24::;3,825.67

The notes to the general purpose financial statements are an integral part of this statement.
-7-

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30. 2000
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The City of Decatur Board of Education (Board) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is not organized as a separate legal entity and does not have the power to levy taxes or issue bonds. Its budget is subj ect to approval by the City of Decatur, Georgia. Accordingly, the City of Decatur Board of Education is detennined to be a component unit of the City of Decatur, Georgia, which is the primary government.
FUND ACCOUNTING
The Board uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time ofpurchase. A General Fixed Assets Account Group is not presently maintained by the Board. To confonn to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To confonn to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements.
The general purpose financial statements account for all State, Federal, Taxes and Other funds under control of the Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most ofa Board's educational
activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.
-8-

CITY OF DECATIJR BOARD OF EDUCATION - DEKALB COUNTY EXHffiIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30. 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.

CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.

BASIS OF ACCOUNTING

The accounting and financial reporting treatment applied to a fund is determined by its measurement

focus. All governmental funds are accounted for using a current financial resources measurement

focus. With this measurement focus, only current assets and current liabilities generally are

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

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

assets. Their reported fund balance is considered a measure of available spendable resources.



Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds.

Governmental funds areaccounted for using the modified accrual basis ofaccounting under which:

Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Those revenues considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income.

Expenditures are generally recognized when the related fund liability is incurred.

A departure from the above definitions is the accounting treatment afforded the final two payments

on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia

Department of Education for the State's share of these contracts. During fiscal year 2000, a

substantial number of personnel of the Board were employed for a one hundred and ninety day

period beginning in late August 1999 and ending in early June 2000. Personnel contracts for this

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

in September 1999 and ending in August 2000. State grants to fund the State's share of these

contracts were disbursed from the Georgia Department ofEducation to the Board in the same twelve

.

months. As ofJune 30, 2000, compensation under these employment contracts had been earned, but

two ofthe twelve monthly payments, due for July and August 2000, had not been made. Payments

for these two months were made and recorded as expenditures by the Board subsequent to June 30,

-9-

CITY OF DECATUR BOARD OF EDUCAnON - DEKALB COUNTY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 2000
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 2000. Also, the State's portion ofthe compensation paid in July and August 2000 was received and recorded as revenue in the fiscal year subsequent to June 30, 2000. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1999, were recorded in the year ended June 30, 2000. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
BUDGET
The City of Decatur Board of Education's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level ofbudget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles. The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end. The Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual presents actual and budgeted data for the General Fund and Special Revenue Fund. To facilitate comparison with the budget, the following adjustments have been made to fund balance as reflected on Exhibit "B" of this report:
- 10-

CITY OF DECATUR BOARD OF EDUCAnON - DEKALB COUNTY EXHIDIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 2000


Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Special Revenue
Fund

FUND BALANCE JULY 1, 1999

$ 234,341.28

Adjustments Inventories - July 1, 1999 Food Donated Commodities Purchased Foods

-12,566.77 -4,619.83

Fund Balance July 1, 1999 (Budget Basis)

$ 217,154.68

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

26,670.99

FUND BALANCE JUNE 30, 2000 (Budget Basis)

$ 243.825.67

CASH AND CASH EQUIVALENTS

COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.

INVESTMENTS

COMPOSITION OF INVESTMENTS Investments made by the Board in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Board to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:

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

(2) Obligations issued by the United States government,

- 11 -

CITY OF DECATIJR BOARD OF EDUCATION - DEKALB COUNTY EXHffiIT "D" NOTES TO TIlE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 2000

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

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

(5) Prime banker's acceptances,

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

(7) Repurchase agreements, and

(8) Obligations of other political subdivisions of the State of Georgia.

RECEIVABLES

Receivables consist ofgrant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose fmancial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

PROPERTY TAXES

The City of Decatur fixed the property tax levy for the 1999 tax year (calendar year) on March 15, 1999 (levy date). Taxes were due on June 1, 1999 and could be paid in two installments on June 1, 1999 and December 20, 1999 (due dates). The lien date for property taxes was January 1, 1999. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2000. The Decatur City Clerk bills and collects the property taxes for the Board of Education.

The tax millage rate levied for the 1999 tax year (calendar year) for the City of Decatur Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

20.5 mills

SALES TAXES

Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $2,870,134.69 and was recorded in the Capital Projects Fund. The State will terminate collection of this tax once an additional $7,581,025.85 has been collected or on June 30, 2002, whichever occurs first.

- 12-

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY EXHffiIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

INVENTORIES

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

COMPENSATED ABSENCES

Compensated absences represent obligations of the Board relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion of this obligation as this amount is deemed immaterial 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 in the General Long-Term Debt Account Group as this liability is also deemed to be immaterial to the fair presentation ofthese financial statements.

INTERFUND TRANSACTIONS

The Board has the following types of interfund transactions:

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

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

MEMORANDUM ONLY - TOTAL COLUMNS

Total columns on the general purpose financial statements are captioned "Memorandum Only" to



indicate that they are presented only to facilitate financial analysis. Data in these columns do not

present financial position, results of operations in conformity with generally accepted accounting

principles. Neither are such data comparable to a consolidation. Interfund eliminations have not

been made in the aggregation of this data.

- 13-

CITY OF DECATUR BOARD OF EDUCAnON - DEKALB COUNTY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 2000
Note 2: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. If a depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of anyone of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
(6) Industrial revenue bonds and bonds ofdevelopment authorities created by the laws ofthe State of Georgia, and

(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS At June 30, 2000, the bank balances were $10,304,621.59. The amounts ofthe total bank balances are classified into three categories of credit risk:
- 14-

CITY OF DECATV .. .. ..KD OF EDUCAnON - DEKALB COUNTY EXHIBIT "D" NOTES TO THE GEi~HRALPURPOSE FINANCIAL STATEMENTS
JUNE 30. 2000

Note 2: DEPOSITS AND INVESTMENTS

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

The Board's deposits are classified by risk category at June 30, 2000, as follows:

Risk Category

Bank Balance

1

$ 300,000.00

2

10,004,621.59

3

0.00

Total

$.1 0.304.621.59

CATEGORIZATION OF INVESTMENTS At June 30, 2000, the carrying value of the Board's total investments was $7,871,401.15 which is materially the same as fair value. This investment consisted entirely offunds invested in the Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services which are not required to be categorized since the Board did not own any specific identifiable securities in the pool. The investment policy ofthe State ofGeorgia, Office ofTreasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description of the Primary Liquidity Portfolio is as follows:

The Primary Liquidity Portfolio consists ofGeorgia Fund 1, which is a combination local and state government investment pool, and Fund 6. Georgia Fund 1 is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. The pool is not registered with the SEC as an investment company but does operate Georgia Fund 1 in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and is considered to be a Rule 2a7 like pool. The pool's primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and values participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value ofthe shares. Participation in the pool is voluntary and deposits consist of funds from local governments; operating and trust funds of Georgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund.

- 15 -

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 2000

Note 2: DEPOSITS AND INVESTMENTS

Investments in Georgia Fund 1 and Fund 6 are directed toward short-term instruments such as U. S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Government or any of its agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2000, was 23 days. The average investment duration for Fund 6 on June 30, 2000, was .80 year.

Note 3: NON-MONETARY TRANSACTIONS

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

Note 4: RISK MANAGEMENT

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

The Board participates in the Georgia School Boards Association Risk and Insurance Management System, a public entity risk pool organized on July 1, 1994, to develop and administer a plan to reduce risk of loss on account of general liability, motor vehicle liability, or property damage, including safety engineering and other loss prevention and control techniques, and to administer one or more groups of self-insurance funds, including the processing and defense of claims brought against members of the system. The Board pays an annual premium to the system for its general insurance coverage. Additional coverage is provided through agreements by the system with other companies according to their specialty for property, boiler and machinery, general liability (including coverage for sexual harassment, molestation and abuse) and automobile risks. Payment of excess insurance for the system varies by line of coverage.

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

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

1999 2000

Beginning of Year Liability_

Claims and Changes in Estimates

Claims Paid

End of Year Liability_

$

0.00 $

119.00 $

119.00 $._ _~O=.O=O

$

0.00 $

5,836.38 $

5,836.38 $._ _~O=.O=O

- 16-

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 2000

Note 4: RISK MANAC~EMENT

The Board participates in the Georgia School Boards Association Workers' Compensation Fund, a public entity risk pool organized on July 1, 1992, to develop, implement, and administer a program of workers' compensation self-insurance for its member organizations. The Board pays an annual premium to the Fund for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Fund with the United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Fund in excess of$350,000.00 loss per occurrence, up to the statutory limit.

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

Position Covered

Amount

Superintendent All Other Employees

$ 100,000.00 $ 100,000.00

Note 5: ON-BEHALF PAYMENTS

The Board has recognized revenues and expenditures in the amount of $328,931.48 for health insurance and retirement contributions paid on the Board's behalfby the following State Agencies.

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance ofNon-Certified Personnel In the amount of $268,631.84

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $27,960.64

Office ofTreasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $32,339.00

Note 6: SIGNIFICANT COMMITMENTS

The following is an analysis ofsignificant outstanding construction orrenovation contracts executed by the Board as of June 30, 2000, together with funding available:

- 17 -

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY EXHIBIT liD" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 2000

Note 6: SIGNIFICANT COMMITMENTS

Project

Unearned Executed Contracts

Funding Available From State

Renfroe Middle School Clairemont Elementary School City Schools of Decatur - Capital
Improvement Program

$ 5,004.40 $ 33,592.90

338,318.32

194,915.00

145,292.55

$ 488,615.27 $ 228,507.90

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

Note 7: CONTINGENT LIABILITIES

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

Note 8: ACCUMULATED EMPLOYEES' LEAVE

Regular full-time, twelve month employees earn vacation leave with pay. Employees earn from ten to fifteen days per year based on years ofcontinuous service with a maximum accumulation ofthirty days. Upon retirement from the school system, employees may be paid for unused vacation leave up to a maximum of twenty days at the current rate of pay or $100.00 per day, whichever is less.

Regular employees earn sick leave with pay at a rate ofone to fifteen days per year based on years of continuous service with a maximum accumulation of two hundred days. When an employee, eligible for contract renewal, retires from the school system with a minimum of ten years of continuous service, and is able to draw retirement from the state retirement system, that employee may be paid for accumulated sick leave up to a maximum ofone hundred days at the rate of$20.00
per day. See Note 1 - Compensated Absences

Note 9: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System ofGeorgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and

- 18 -

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY EXHIBIT "D"
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000

Note 9: RETIREMENT PLANS

survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

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

Fiscal Year

Percentage Contributed

Required Contribution

2000 1999 1998

100% 100% 100%

$ 1,511,155.34 $ 1,518,711.54 $ 1,383,545.12


- 19-

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY COMBINING BALANCE SHEET SPECIAL REVENUE FUND
JUNE 30, 2000

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

SCHOOL FOOD
SERVICES FUND

LOTIERY PROGRAMS

$

263,538.21 $

84,126.60

10,000.00

476.69

8,472.97 5,220.61

Total Assets

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

Total Liabilities and Fund Equity
See notes to the general purpose financial statements.
- 20-

$

287,708.48 $ ====8=4..100,1.2..=6.=6.0...

$

8,591.46 $

19,968.74

33,027.08

64,157.86

$

41 ,618.54 $ _ _....:8::.;;:4~,1:.::2.:::.;.:6.:::,60:::..

$

8,472.97

5,220.61

232,396.36 $

$

246,089.94 $

0: :.,.:.:::.;00:::,. ---..:0::.:;.0::.::0:...

$ .....:.....2.8..7..,708.48 $ ....._~8;;,4-.:.1,,:;,;26::.;;.6~0~

EXHIBIT "E"

FEDERAL
PROGRAMS

TOTALS

JUNE 30, 2000

JUNE 30,1999

$

43,167.64 $

390,832.45 $

308,178.02

10,000.00

10,000.00

118,330.00

118,806.69

113.676.00

8,472.97 5,220.61

12,566.77 4,619.83

$ ==1,;,,;;6~1,497.64 $

533,332.72 $ _ ....4...4..9=,0.4..0.;;,;.;;;;62=


$

29,624.78 $

58,184.98 $

40.983.37

89.881.66

187.066.60

173.715.97

30.561.89

30.561.89

$

150,068.33 $

275,813.47 $ _---=2:..;1..:.4.r.::;6.:::.:99::.:;.3::.4:..

$

11,429.31 $

11,429.31 $

394.85

8,472.97 5.220.61

12.566.77 4.619.83

0.00

232,396.36

216,759.83

$

11,429.31 $

257,519.25 $ _---:2::,:3....;..4.r.;:;,34..;.1.:.,:.2:,;:8:..

$ _ _1.6..1.,497.64 $

5.3..3..,332.72 $ _ _4..4...,.9,040.62

- 21 -

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2000

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

68,492.00 $

523,133.33

538.577.49

417.230.68

$ 1,024.300.17 $ _ _5=.=2=3,-".1.::;.3.;;.;3..;;..33,,-

$

544,755.37

36.913.98

$ 1,008,663.64

391.00

,
$ 1,008,663.64 $ _........:5::.:8=.2.1.:.0.;;.;60::.:;.3::.=5'-

$

15.636.53 $

-58.927.02

$

15.636.53 $

233.946.43

-4.093.80 600.78

58,927.02
0.00 0.00

$

246,089.94 $ = .....-===~O._OO:;...

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

EXHIBIT "F"

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2000

JUNE 30, 1999

$

76,353.00 $

667,978.33 $

572,643.26

1,649,224.53

2,187,802.02

1,867,129.68

226.09

417.456.77

371,720.76

$ 1,725,803.62 $ 3,273,237.12 $ 2,811.493.70

$ 1.400,081.73 $ 1,944,837.10 $ 1.467.438.84

30,186.75 60,755.50 151,611.41
1,431.00 2,058.80 33,349.78 35,294.19

67,100.73 60,755.50 151,611.41
1,431.00 2,058.80 33,349.78 35,685.19 1,008,663.64

71,657.86 34,626.93 190,464.55
26.42 2,578.04

24,831.77 2,196.63
965,639.78

$ 1,714,769.16 $ 3,305,493.15 $ 2,759,460.82

$

11,034.46 $

-32,256.03 $

52,032.88



58,927.02

38.74

$

11,034.46 $

26,670.99 $

52,071.62

394.85

234,341.28

191,636.27

-4,093.80 600.78

-5,569.90 -3,796.71

$ ...._ _1.1,429.31 $

25.7. ,519.25 $ _ _2::;;,;3~4.,3;;;:;4_1._28=...

- 23-

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY COMBINING BALANCE SHEET CAPITAL PROJECTS FUND
JUNE 30, 2000

ASSETS Cash and Cash Equivalents Accounts Receivable

REGULAR

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$

7,778.20 $

614,163.33

Total Assets

$

7,778.20 $ ====61=4=,1..6..=3.=33=

LIABILITIES AND FUND EQUITY

LIABILITIES

Cash Overdraft Accounts Payable Contracts Payable Retainages Payable

Total Liabilities

FUND EQUITY

Fund Balances

Reserved

For SPLOST Projects

For State Capital Outlay Projects

Unreserved



Undesignated

Total Fund Equity

Total Liabilities and Fund Equity

$

290,201.33

127,080.00

$ _ _.:.41.:.:.7.&:,2:.::.8.:.:.1=.:33~

$

196,882.00

$ _ _~7...:.7,..:..78.~.::;20~

0.00 .

$

7,778.20 $ _ _..:.:19~6~,8~8.:.:2.~00~

$

7,778.20 $ .............;;;,6~14.,1;,;;;6,;;;,;3.,;;;,;33;;",

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


EXHIBIT "G"

SPECIAL PURPOSE LOCAL OPTION SALES TAX

LOTTERY PROJECT

TOTALS

JUNE 30, 2000

JUNE 30,1999

$

507,614.54

$ 1,129,556.07 $ 1,465,856.98

479,494.52 $ _ _::.:28::.;4:.J.1':..::0~7.:.:::.0.::.-0

763,601.52

1,219,274.07

$

987,109.06 $

284,107.00 $ 1,893,157.59 $ 2,685,131.05

$

223,888.35 $

223,888.35 $

391,673.36

5,023.11

290,201.33

396,368.13

127,080.00

328,081.84

$

223,888.35 $

641,169.68 $ 1,121,146.44

$

987,109.06

$

0.00

$

987,109.06 $

$ 60,218.65
0.00
60,218.65 $

987,109.06 $ 257,100.65
7,778.20
1,251,987.91 $

1,517,223.41 38,983.00
7,778.20
1,563,984.61

$

987,109.06 $ _ .......2..8.4.,107.00 $ _ _1,893,157.59 $ 2,685,131.05

- 25-

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 3D, 2000

REVENUES

State Funds Taxes Other Funds

Total Revenues

EXPENDITURES

Capital Outlay

Land and Land Improvements

Building and Building Improvements



Equipment

Total Expenditures

Excess of Revenues over (under) Expenditures

OTHER FINANCING SOURCES (USES)

Operating Transfers In Operating Transfers Out

Total Other Financing Sources (Uses)

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

FUND BALANCE JULY 1

FUND BALANCE JUNE 30

REGULAR

GEORGIA STATE FINANCING AND
INVESTMENT
COMMISSION

$

0.00 $

0.00

$

0.00 $

. : ;O.:.: .OO=._

$

0.00

$

3.603.355.07

$

0.00 $ _.....::.l3.::.;60:.:3;.r,.3::..:::.55~.0;::.:7:....

$

0.00 $ -3,603,355.07

$

3,791,124.07

$ _.....::.l3.:.;79:.,:1.11.:.'.:.24..:.:,.0;::.:7_

$

0.00 $

187,769.00

7,778.20

9,113.00

$ _ _.....7..,778.20 $ ......=,;,,;19_6*O:.8~82;,;,.0;;;,;;0;.,.


See notes to the general purpose financial statements. - 26-



EXHIBIT "H"

SPECIAL PURPOSE LOCAL OPTION SALES TAX

LOTTERY PROJECT

TOTALS

YEAR ENDED

JUNE 30, 2000

JUNE 30, 1999

$
$ 2,870,134.69 33,052.06
$ 2,903,186.75 $

21,516.00 $ 21,516.00 $

21,516.00 $ 2,870,134.69
33,052.06
2,924,702.75 $

1,026,291.66 2,641,685.37
67,891.02
3,735,868.05

$

164.127.10 $

$

164,127.10 $

$ 2,739.059.65 $

469,217.28 $

$ 4,236,699.45

1,144,852.80 3,000,281.61
3,460.00

469.217.28 $ 4,236,699.45 $ 4,148,594.41

-447.701.28 $ -1 ,311 ,996.70 $ _ _-4.:..:1~2...7:.:,:;26::.:,.3::::.,:6::-

$ 1,000,000.00 $ -4,269,174.00
$ -3.269,174.00 $

492,984.93 $ 5.284,109.00 $ 2,306.322.64

-14,935.00

-4.284,109.00

-2,431,706.14

478.049.93 $

1,000,000.00 $ _ _-1"",2~5.L:,3"",83;;.;..5;.;0"-

$

-530,114.35 $

1.517,223.41

30.348.65 $ 29,870.00

-311,996.70 $ 1,563,984.61

-538,109.86 2,102,094.47

$ _ ......9..8..7..,109.06 $ ....__6.0.,218.65 $ _ _1,251,987.91 $ _ _1,563,984.61

-27 -

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY SCHEDULE OF j;XPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2000

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program National School Lunch Program
Total Child Nutrition Cluster
Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1)
Total U. S. Department of Agriculture
Corporation for National and Community Service Pass-Through From Georgia Department of Education Learn and Serve America School and Community Based Programs
Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education Act Part B - Special Education Capacity Building Improvement Flow Through Preschool
Total Special Education Cluster
Other Programs Direct Impact Aid Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Tille I Even Start Grants to Local Educational Agencies Tille II Eisenhower Professional Development Tille III Technology Literacy Challenge Fund Grants Title VI Class Size Reduction Innovative Education Program Strategies Safe and Drug-Free Schools Stewart B. McKinney Homeless Assistance Act Education for Homeless Children and Youth Vocational Education - Basic Grants to States High School Program Basic Grant Pass-Through From City of Decatur Title X 21st century Community Learning Center Grant
Total U. S. Department of Education

CFDA NUMBER

.
PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

10.553 10.555

N/A $ N/A
$

134,029.21 360,997.57 $
495,026.78 $

(2)
965,112.93 (3)
965,112.93

10.550

N/A
$

43,550.71

43,550.71

538,577.49 $ _........:.1:.::.0"",08~,6::.:6::;:3;:,:.64:..:..

94.004

N/A $

10,000.00 $ _ _--::6;,:.6:.::5.:...;7.::::;53~

84.173 84.027 84.173

N/A $
N/A NlA
$

7.240.00 $
215.028.00 21.584.00
243.852.00 $

7.240.00 215,028.00
21,584.00
243,852.00

84.041

9.086.96

(5)

84.213 * 84.010
84.281 84.318 84.340 84.298 84.186 84.196
84.048
84.287
- 28

NlA

180,855.57

180.855.57

N/A

813.332.54

813.332.54

NlA

19.976.00

19,976.00

N/A

124.639.00

116.947.01

N/A

99.952.00

99,952.00

N/A

26.040.00

26.040.00

N/A

10,783.00

10.783.00

N/A

18,125.00

18.125.00

N/A

36.587.00

36.587.00

NlA

65,082.42

65.308.51 (3)

$

1,648.311.49 $ _ _1:.&:.6::.::3~1.:.,:75::.::8.:.::.6::..3

CITY QF DECATUR BOARD OF EDUCATION - DEKALB COUNTY

SCHEDULE QF EXPENDITURES OF FEDERAL AWARDS



YEAR ENDED JUNE 30, 2000

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Derense.U.S.Departmentof Direct Department of the Army R.OTC. Program

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

$

4.:.;6",.9:.:.7",,6.=.;85=-

(4)

Total Federal Financial Assistance

$ 2.243.865.83 $

N/A = Not Available

Notes to the Schedule of Expenditures of Federal Awards

(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the current fiscal year.
(2) Expenditures for the School Breakfast Program were not maintained seperatelyand are included in the 2000 National School Lunch Program.
(3) Expenditures for this program include State. and/or Other Funds. Expenditures are not maintained by fund source.
(4) Expenditures on this program were not maintained by fund source. (5) Funds earned on this program do not require reporting of expenditures.

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

The Board did not provide Federal Assistance to any Subrecipient.

The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the City of Decatur Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the general purpose financial statements.

2.647.079.80

see notes to the general purpose financial statements.

- 29

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY SCHEDULE OF STATE REVENUE YEAR END;;D JUNE 30, 2000

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Quality Basic Education General and Career Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Middle School Incentive Program Special Instructional Assistance In-School Suspension Mid-term Adjustment Counselors Technology Specialist Local Five Mill Share Educational Equalization Formula Food Services Other State Programs Altemative Program At-Risk Summer School Program Health Insurance Mentor Teachers Preschool Handicapped Program Remedial Summer School Teachers' Retirement Lottery Programs Assistive Technology Computers in the Classroom Exceptional Growth-Capital Outlay
Georgia Department of Community Affairs Govemor's Emergency Funds (1)
Georgia Department of Human Resources Second Step Program
OffiCe of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement
CONTRACTS Education, Georgia Department of Georgia's Reading Challenge Crossroads Special Project

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$ 5,828,516.00 1,804,220.00 297,521.00 259,290.00 71,063.00 1,643,207.00
71,161.00 24,685.00 194,124.00 159,147.00 72,610.00 184,948.00 23,856.00 86,527.00 -1,970,409.00 370,327.00
$
83,725.00 7,838.21
268,631.84 2,592.00 38,503.00 4,521.58 27,960.64

68,492.00
15,197.54 58,420.00
$

5,000.00

2,629.15

449,515.79

32,339.00

$ 5,828,516.00 1,804,220.00 297,521.00 259,290.00 71,063.00 1,643,207.00

71,161.00 24,685.00 194,124.00 159,147.00 72,610.00 184,948.00 23,856.00 86,527.00 -1,970,409.00 370,327.00 68,492.00

83,725.00 7,838.21
268,631.84 2,592.00
38,503.00 4,521.58 27,960.64

21,516.00

15,197.54 58,420.00 21,516.00

5,000.00

2,629.15

449,515.79

32,339.00

24,000.00 500.00

76,353.00

100,353.00 500.00

$ _ _9,619,033.42 $ _~66;;.:o7,978.33 $ _....:2;,,:.1,516.00 $ 10,308,527.75

(1 ) The purpose of the funds are to support literacy development by purchasing
materials to supplement the Houghton-Mifflin language arts program.

See notes to the general purpose financial statements.

- 30

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY SCHEDULE OF APPROVED LOCAL OPTION SALES TIV< PROJECTS
YEAR ENDED JUNE 30, 2000

SCHEDULE "3"

PROJECT

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS

Renovations, modifications, additions

and equipment for the Central Office,

Clairemont Elementary, College

Heights Elementary, Decatur High

School, Fifth Avenue Elementary,

Glenwood Elementary, Oakhurst

Elementary, Renfroe Middle School,

Westchester Elementary and Winnona

Park Elementary. The maximum cost

of this project is $15,422,200.00

$

15,422,200.00 $

15,422,200.00 $

4,236,699.45 $

3,538,017.90

(1) The Board's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax.
(2) The Board's current estimate of total cost for the project. Includes all cost from project inception to completion.
(3) The voters of DeKalb County approved the imposition of a 1% sales tax to fund the above project. Amount expended for this project may include sales tax proceeds, state, local property taxes and/or other funds over the life of the project.

See notes to the general purpose financial statements.

- 31 -

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 2000

SCHEDULE "4"

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

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$

8,374,495.00 $ _ _-=2::...;4~4.l.:8::~'05::..:.::.;80::..

$

11,033,802.04

500,652.91 $

$

11,534,454.95

4..:.:0::....:1~,8:.::::3.::.;6.~65::..

-325,462.59
$ _~1~1.!.=,2::.:08~,9:::..::9:.:2.:.:::.3~6

$

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

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

CITY OF DECATUR BOARD OF ~DUCATIQN - DEKALB COUNTY ANALYSIS OF MINIM!,JM EXPENDITURE REQUIREMENTS - BY PROGRAM
GENERAL F!,JND - Q!,JALITY BASIC EDUCATION PROGRAMS YEAR~DED NNE 30. 2000

GENERAL AND CAREER EDUCATION PROGRAMS
Kindergarten (*)
Grades 1 - 3 (*) Sub-Total- K-3
n Grades 4 - 5
Grades 6 - 8 (*)
Grades 9 - 12 (*)
High School Laboratories (*)
Vocational Education Laboratories (*) Total General and Career Education Programs
~PECIAL liiD!,JCATION PROGRAMS Regular Programs Category I (*) Category II (*) Category III (*) Category IV (*) Category V (*)
Sub-Total - Regular
Category VI (Gifted) (*)
Total Special Education Programs
REM~QIAL ER!,JCATlm/ PROGBAM rl
Total Fourteen Weighted Programs
MEDIA CENTER PROGRAMS
Salaries Operations
Total Media Center Programs

ALLOTMENTS FROM GEORGIA DEPARTMENT OF

REQUIRED

ORIGINAL

%

ORIGINAL

MID-TERM

$

654,816.00

$

589,334.40 $

0.00

1,695,096.00

1,525,586.40

$ 2,349,912.00 90 $ 2,114,920.80 $

0.00

710,795.00 90

639,715.50

1,176,869.00 90

1,059,182.10

184.948.00

840.838.00 90

756,754.20

379,468.00 90

341.521.20

370,634.00 gO

333.570.60

$ 5,828,516.00

$ 5,245,664.40 $ _ _.:.:18;...:4.:.:,9o..:.4",8.c::;00::.

$ 1.367,288.00

$ 1.230,559.20 $

0.00

$ 1,367.288.00 90 $ 1.230.559.20 $

0.00

436.932.00 90

393.238.80

$ 1.804,220.00

$ 1,623.798.00 $

~O:,:::,OO::.

$

297.521.00 90 $

267,768.90 $

~O:,:::,OO::.

$ 7,930.257.00

$ 7,137,231.30 $ _--..:1.=.84.;,:,,94~8:.:::.oo::.

$

209.873.00 90 $

188.885.70 $

49,417.00 100

49,417.00

$

259.290.00

$

238.302.70 $

0.00 -..::0.:.:.00::::,.

Total Fourteen Weighted and Media Center Programs

$ 8,189,547.00

$ 7,375.534.00 $ _ .....1_8.4.,-.94.8...0..0..

STAFF D~LOPM~NT PROGBAMS Cost of Instruction Professional Development
Total Staff Development Programs (*) Identifies Fourteen Weighted Programs.

$

23.040.00

48.023.00

$

23,040.00 $

48,023.00

$

71.063.00 100 $

71,063.00 $

0.00 0.00
. .0.0..0.

See notes to the general purpose financial statements.

- 34 -

SCHEDULE "5"

EDUCATION TOTAL
REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$

589,334.40 $

677,567.46 $

21,947.63 $

699,515.09

1,525,586.40

1,852,218.94

71,074.55

1,923,293.49

$ 2,114,920.80 $ 2,529,786.40 $

93,022.18 $ 2,622,808.58 $

0.00

639,715.50

1,133,582.43

60,387.31

1,193,969.74

0.00

1,244,130.10

1,577,831.97

56,032.12

1,633,864.09

0.00



756,754.20

1,393,920.91

105,794.72

1,499,715.63

0.00

341,521.20

376,006.36

637.46

376,643.82

0.00

333,570.60

665,149.55

,56,625.37

721,774.92

0.00

$ 5,430,612.40 $ 7,676,277.62 $

372,499.16 $ 8,048,776.78

$ 1,230,559.20 $

127,295.55 $ 243,850.55 1,382,276.70 189,172.68
33,430.46

374.31 $ 758.57 15,098.67 615.35 1,959.75

127,669.86 244,609.12 1,397,375.37 189,788.03
35,390.21

$ 1,230,559.20 $ 1,976,025.94 $

18,806.65 $ 1,994,832,59

0.00

393,238.80

570,306.04

7,021.62

577,327.66

0.00

$ 1,623,798.00 $ 2,546,331.98 $

25,828.27 $ 2,572,160.25

$

267,768.90 $

325,256.11 $

3,509.22 $ _--::3::::28::.:"7:.::6:::::5.:::3~3

0.00

$ 7,322,179.30 $ 10,547,865.71 $

401,836.65 $ 10,949,702.36

$

188,885.70 $

49,417.00

$

238,302.70 $

485,936.33

$

$ _ _.;;9;;:8,~81:.:6:::.2:::..6

485,936.33 98,816.26

485,936.33 $

98,816.26 $ _--:584=,,:.:75::::2::,::.5:::..9

$ 7,560,482.00 $ 11,033.802.04 $

500.652.91 $ 11,534.454.95 $

0.00 0.00
00..0.

$

23,040.00

48,023.00

$

7.1.,.06.,3;;,;.00-.

$

67,217.38 $

67.217.38

41,722.09

41,722.09

$

108.939.47 $

108,939.47 $

....:O~.oo:::.

35

SECTIONll COMPLIANCE AND INTERNAL CONTROL REPORTS



RUSSELL W. HINTON
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
July 13, 2001

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members ofthe City of Decatur Board of Education
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINA.NCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of City of Decatur Board of Education as of and for the year ended June 30, 2000, and have issued our report thereon dated July 13,2001. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether City of Decatur Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination offinancial statement amounts. However, providing an opinion on compliance with those provisions was not an objective ofour audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered City ofDecatur Board ofEducation's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements. and not to provide assurance on the internal
2000YB-40A

control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in ourjudgment, could adversely affect City ofDecatur Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. Reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs as items FS-7731-00-01, FS-7731-00-02 and FS-7731-00-04.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions, and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, ofthe reportable conditions described above, we consider item FS-7731-0004 to be a material weakness.
This report is intended solely for the information and use of management, members of the City of Decatur Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,

RWH:jb 2000YB-40A

Ru sell W. Hinton State Auditor

RUSSELL W. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
~.'i4 Washington Str~~t, S.W., Suite ~ 14 Atlanta, G~orgia 30334-X400
July 13,2001

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members ofthe City of Decatur Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance ofCity ofDecatur Board ofEducation with the types ofcompliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-I33 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2000. City of Decatur Board of Education's major Federal programs are identified in the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility ofCity ofDecatur Board ofEducation's management. Our responsibility is to express an opinion on City of Decatur Board of Education's compliance based on our audit.
We conducted our audit ofcompliance in accordance with auditing standards generally accepted in the United States ofAmerica; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the City of Decatur Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on City of Decatur Board of Education's compliance with those requirements.
2000SA-10A

In our opinion, the City ofDecatur Board ofEducation complied, in all material respects, with the requirements referred to above that are applicable to each ofits major Federal programs for the year ended June 30, 2000.
Internal Control Over Compliance
The management of City of Decatur Board of Education is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered City ofDecatur Board ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133.
Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course ofperforming their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended solely for the information and use ofmanagement, members of the City of Decatur Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
R sell W. Hinton State Auditor
RWH:jb 2000SA-IOA


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


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

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-7731-98-01 FS-7731-98-03 FS-7731-99-01 FS-7731-99-02

Further Action Not Warranted Further Action Not Warranted Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses

CORRECTIVE ACTIONIRESPONSES

ACCOUNTING CONTROLS (OVERALL) Inadequate Separation of Duties Finding Control Number: FS-7731-99-01

Due to current budgetary constraints, the Board is unable to hire additional staffrequired to clear this finding. The Board feels that it has provided for the most appropriate assignment of duties with the number of personnel available to perform the accounting functions. With stafflimitation, this fmding cannot be totally resolved.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7731-99-02

Due to current staffmg limitations and budgetary considerations prohibiting the hiring of additional administrative staff, the Board has decided not to pursue the recording ofgeneral fixed assets on the fmancial statements.

SECTION IV FINDINGS AND QUESTIONED COSTS

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000

I SUMMARY OF AUDITOR'S RESULTS

1. Type of Report Issued on the Financial Statements The auditor's opinion on the City ofDecatur Board ofEducation's financial statements was qualified for various departures from generally accepted accounting principles.

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

Cash and Cash Equivalents General Ledger

Employee Compensation General Fixed Assets

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

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

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

5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the City ofDecatur Board ofEducation's report on compliance with requirements applicable to major programs was unqualified.
6. Audit Findings Required to be Reported by Section .5 !OW of OMB Circular A-B3
The City ofDecatur Board ofEducation's audit did not disclose audit findings required to be reported by section .5lO(a) ofOMB Circular A-l33.

7. Maior Programs Federal awards audited as major programs are as follows: 84.010 Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies

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

9. Low Risk Auditee The City ofDecatur Board ofEducation was audited as a low risk auditee based on a waiver granted by the U. S. Department of Education.

- 1-

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS GENERAL LEDGER Inadequate Accounting Procedures Reportable Condition Finding Control Number: FS-773l-00-0l
A review of the Board's accounting policies and procedures noted deficiencies in accounting procedures for the control categories as noted below:
l) Cash and Cash Equivalents Checks were written in July 2000 and recorded in fiscal year 2000 accounting period. Blank checks were stored under control of the bookkeeper who also prepared and distributed checks and reconciled the bank accOlmts.
2) General Ledger The general ledger for the Payroll Clearing Fund as presented for examination was not in balance. Journal entries were not supported by either adequate documentation or written explanations. Journal entries were made to the accounting records without proper supervisory control.
These conditions were a result ofmanagement's failure to establish proper accounting controls over the check writing and general ledger processes and management's failure to ensure journal entries made to the general ledger contained supporting documentation and adequate explanations. The Board should establish appropriate procedures to ensure adequate internal controls over the accounting functions.
Management's Response:
For the upcoming year, one additional employee will be delegated the responsibility ofdistributing checks and reconciling accounts independent of the bookkeeper's control.
This finding will be discussed with the City Schools of Decatur Board of Education and all efforts will be made to avoid this finding in the future.
From this day forward, all expenditures will be processed within the current fiscal year to match the allotted revenues. Additional invoices received will be paid before the books are closed at the end of the appropriate year.
The Genesis Financial System is not capable of closing the year when the Payroll Clearing Fund is out of balance. When the 2000 Fiscal Year was closed, the Payroll Clearing Fund was in balance.

- 2-

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUNALENTS GENERAL LEDGER Inadequate Accounting Procedures Reportable Condition Finding Control Number: FS-7731-00-01
Management's Response:
All employees will maintain documentation and immediate supervisors will confirm by affixing signatures to all documents before presenting to accounting for processing. Accounting will make an immediate entry into the ledger upon receipt ofproper documentation and with a supervisor's initial approval.
EMPLOYEE COMPENSATION Inadequate Internal Controls Reportable Condition Finding Control Number: FS-7731-00-02
Testing of Board salaries revealed deficiencies in internal controls over employee compensation. Conditions noted were as follows:
1) Improper timecard procedures a. Calculated pay from timecards did not agree with actual pay per payroll earnings history. b. Timecards were not documented as being approved by management. c. Timecards revealed instances whereby an employee clocked in and not out for the same day. d. Timecards revealed instances whereby the time had been manually altered with no apparent approval documented on the timecard. e. Hourly employees were paid each month on a budget basis and not for actual time worked per the timecard. However, adjustments were made during the year to ensure employees were paid for actual time cumulatively worked.
2) Improper leave records a. Leave records were unavailable for one employee. b. One employee's pay was not reduced for excess leave taken.
3) Improper calculation ofpay a. An employee received a supplement for two months more than the stated contract amount.
4) Improper documentation ofpay a. One non-certified employee's pay increase could not be traced to backup documentation.
-3-

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
EMPLOYEE COMPENSATION Inadequate Internal Controls Reportable Condition Finding Control Number: FS-7731-00-02
These conditions were the result of a lack of proper accounting controls over employee compensation. Procedures should be implemented by the Board to ensure that employee pay is properly calculated and documented and leave is maintained for each employee.
Management's Response:
1a) On this finding we concur and appropriate action has been taken to rectify the situation for the 2001 fiscal year.
1b) Supervisor initials will approve all timecards. 1c) If employees are negligent with timecards, their immediate supervisor will document actions
taken. 1d) With the present mode of operation we concur with this finding; however, when an adequate
program is developed for our accounting and payroll system, we should have the technical capability of resolving this finding. 2) On this finding we concur and appropriate action has been taken to rectify the situation for the 2001 fiscal year through more stringent supervision from the Human Resources Department. 3) On this finding we concur and appropriate action has been taken to rectify the situation for the 2001 fiscal year through more stringent supervision from the Human Resources Department. 4) On this finding we concur and appropriate action has been taken to rectify the situation for the 2001 fiscal year through more stringent supervision from the Human Resources Department.
GENERAL LEDGER Failure to Transfer Local Matching Funds Nonmaterial Noncompliance Finding Control Number: FS-7731-00-03
The Board failed to transfer local matching funds from the Capital Projects Fund - Special Purpose Local Option Sales Tax Fund to the Capital Projects Funds - Georgia State Financing and Investment Commission Fund (GSFIC) and Lottery Fund as required for the approved Capital Outlay Projects for the 2000 fiscal year. Both the instructions in Chapter 41 ofthe Financial Management for Georgia Local Units of Administration and the agreement signed by the Board to receive the funding through GSFIC and Lottery require that the Board transfer local matching funds by year end
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CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL LEDGER Failure to Transfer Local Matching Funds Nonmaterial Noncompliance Finding Control Number: FS-7731-00-03
and designate those funds by project name and number. The transfers were not made by the Board at June 30, 2000. Correcting audit adjustments totaling $235,865.00 were necessary to transfer the required local effort from SPLOST to the various projects.
Procedures should be implemented by the Board to ensure that all required local effort matching funds are transferred as required.
Management's Response:
We concur with this finding. Both revenues and expenditures will be coded to the corresponding facility code. This process is already in place for 2001 fiscal year.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-7731-00-04
The City of Decatur Board of Education did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general-purpose financial statements of the Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory ofland, buildings and equipment owned by the Board and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets

Account Group.
Management's Response:
On this finding we concur. However, in the entire history ofthe audit process in Georgia, it has been
noted that every school system and every regional education service agency continues to receive this finding. At this time the state auditor has no remedy to eliminate this finding.
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CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000
ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.
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