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 AND ACCOUNT GROUP 2 B . COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES 4 C COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTIJAL (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS 7 D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS 8 ADDmONAL FINANCIAL INFORMATION COMBINING STATEMENTS SPECIAL REVENUE FUND E COMBINING BALANCE SHEET 20 F COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 22 CAPITAL PROJECTS FUND G COMBINING BALANCE SHEET 24 H COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 26 SCHEDULES 1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 28 2 SCHEDULE OF STATE REVENUE 30 3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 31 ALLOTMENTS AND EXPENDITURES GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) 4 BY PROGRAM 32 5 BY SITE 33 \ !! I CITY OF DECATIJR 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 CIRCULARA-133 ' SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS SECTIONN FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION I FINANCIAL , RUSSELL W. HINTON STATE AUDITOR (404) 656-2174 . DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S~w., Suite 214 Atlanta, Georgia 30334-8400 May 17,2002 Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members of the State Board ofEducation and Superintendent and Members ofthe 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 ofEducation, a component unit ofthe City ofDecatur, Georgia, as of and for the year ended June 30, 2001, as listed in the table ofcontents. These general-purpose financial statements are the responsibility of the City of Decatur Board of EducatioIl;'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 of Education's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows: 200 1ARL-13 * The general-purpose financial statements of the Board of Education did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting principles. * School activity accounts maintained at the individual schools are not included in the general-purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements. * The Board of Education did not recognize as expenditures, in the year ended June 30, 2001, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2001. Also funds received, subsequent to June 30, 2001, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were improperly recorded in the year ended June 30, 2001. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed. The aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined, but are believed to be material. In our opinion, except for the effects on the general-purpose financial statements of the matters referred to in the preceding paragraph, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position of the City of Decatur Board of Education as ofJune 30, 2001, 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 May 17, 2002, 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 I statements of the City of Decatur Board of Education taken as a whole. The accompanying 11:\ combining statements (Exhibits E through H) and the financial 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 I 200IARL-13 ~i III II, procedures applied in the audit ofthe general-purpose financial statements and in our opinion, except for the effects ofthe matters referred to in the third paragraph, such information is fairly stated, in all material respects, in relation to the general-purpose financial statements taken as a whole. A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24. Respectfully submitted, RWH:gp 2001ARL-13 . Rus 11 W. Hinton State Auditor :,1 'I I~ 1\ CITY OF DECATIJR BOARD OF EDUCATION - DEKALB COUNTY CITY OF DECATUR BOARD OF EDUCATION DEKALB COUNTY COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP JUNE 30. 2001 . ASSETS Cash and Cash Equivalents Investments Accounts Receivable Inventories Food Donated Commodities Purchased Food Amount to be Provided in Future Years For Payment of Compensated Absences GOVERNMENTAL FUND SPECIAL GENERAL REVENUE FUND FUND $ 7,044,222.34 $ 325,702.56 1,971,321.24 10,000.00 2,182.333.21 110,463.21 11,876.02 5,653.91 Total Assets $ 11.197.876.79 $ ===463;,6~95;;;:.=70= LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue Contracts Payable Retainages Payable Compensated Absences 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 $ 50,681.86 $ 4,828,482.22 55,820.36 186,417.41 22.794.20 $ 4,879,164.08 $ 265,031.97 $ 11,876.02 5,653.91 $ 6,318,712.71 $ 6.318.712.71 $ 181,133.80 198.663.73 Total liabilities and Fund Equity $ 11.197,876.79 $=====46=3=,6=9=5,=70= The notes to the general-purpose financial statements are an Integral part of this statement. -2- EXHIBIT "A" TYPES CAPITAL PROJECTS FUND $ 636,528.88 7,172.494.32 611,503.97 ACCOUNT GROUP GENERAL LONGTERM DEBT TOTALS (Memorandum Only) JUNE 30, 2001 JUNE 30, 2000 $ 8,006,453.78 $ 9,196,192.22 9,153,815.56 7,881,401.15 2,904,300.39 1,584,471.09 11,876.02 5,653.91 8,472.97 5,220.61 $ 226,018.21 226,018.21 .. 184,238.50 fl $ 8,420,527.17 $ 226,018.21 $ 20,308.117.87 $ 18,859,996.54 \i ,~ II ~'I $ I ;1, II $ !1 113,752.00 $ 113.752.00 $ $ 226,018.21 226,018.21 $ 106.502.22 $ 186,417.41 22,794.20 4,828,482.22 113,752.00 226,018.21 5,483,966.26 $ 98,488.99 187,066.60 30,561.89 290,201.33 127,080.00 184,238.50 917.637.31 II ~~ ~ ) '" :1 1,1 il $ \$ 8,112,940.00 186,056.97 7,778.20 8,306,775.17 $ 11,429.31 $ 11,876.02 5,653.91 8,112,940.00 186,056.97 8,472.97 5,220.61 987,109.06 257,100.65 6.507,624.71 16,673,026.63 $ 14,824,151.61 $ 17,942.359.23 $ 8,420,527.17 $ 226,018.21 $ 20,308,117.87 $ 18,859,996.54 -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. 2001 REVENUES State Funds Federal Funds Taxes Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration 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 $ 10,482,406.21 $ 58,428.23 8,635,213.70 1,394.430.93 $ 20,570,479.07 $ 6n,127.25 2,088,769.26 454,859.84 3,220,756.35 $ 14,640,221.62 $. 1,880,452.25 . 805,570.76 668,825.54 580,552.83 542,356.41 1,658,129.67 389,941.63 2,595,241.68 540,822.56 166,044.57 576,034.37 141,522.73 14,045.00 839.65 65,338.21 45,506.98 184,106.57 363.81 980.73 33.402.10 369.60 59,404.63 1,082,404.75 $ 23,320,149.02 $ 3,352,329.63 $ -2,749,669.95 $ -131,573.28 $ $ -7,364,469.41 $ -7,364.469.41 $ 68,881.41 68,881.41 $ -10,114,139.36 $ 16,432,852.07 -62,691.87 257,519.25 3.403.05 433.30 FUND BALANCE JUNE 30 $ 6,318,712.71 $ ==1=9=8=,6=63=.7=3= The notes to the general-purpose financiai statements are an integral part of this statement. -4- EXHIBIT"B" CAPITAL PROJECTS FUND TOTALS (Memorandum Only) YEAR ENDED JUNE 30, 2001 JUNE 30, 2000 $ 247,316.00 $ 11,406,849.46 $ 10,308,527.75 2,147,197.49 2,243,865.83 2,904,787.11 11,540,000.81 16,306,623.77 44,850.75 1,894,141.52 1,706,332.21 $ 3,196,953.86 $ 26,988,189.28 $ 30,565,349.56 I I [I! ,I Ii ~ $ \$ ,I $ ;I, :1 I!:\1. $ ~ $ ~i I$ Ii $ 16,520,673.87 $ 14,148,089.00 3,437,754.60 870,908.97 714,332.52 580,552.83 . 726,462.98 1,658,493.48 389,941.63 2,596,222.41 574,224.66 166,414.17 635,439.00 1,223,927.48 14,045.00 3,438,594.25 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 3,437,754.60 $ 30,110,233.25 $ 27,698,067.20 -240,800.74 $ -3,122,043.97 $ 2,867,282.36 7,295,588.00 $ 7,364,469.41 $ 1,058,927.02 -7,364,469.41 -1,058,927.02 7,295,588.00 $ 0.00 $ 0.00 7,054,787.26 $ -3,122,043.97 $ 2,867,282.36 1,251,987.91 17,942,359.23 15,078,569.89 3,403.05 -4,093.80 'I, 433.30 600.78 I $ 8,306,775.17 $ 14,824,151.61 $ 17,942,359.23 i -5- ,I Ii: CITY OF DECATUR BOARD OF EDUCATION DEKALB COUNTY COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL INON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30. 2001 EXHIBIT"C" GENERAL FUND ACTUAL (BUDGET BUDGET BASIS} REVENUES State Funds Federal Funds Taxes Other Funds $ 10,201,422.00 $ 46,800.00 13,002,219.00 680,171.00 10,482,406.21 58,428.23 8,635,213.70 1,394,430.93 Total Revenues $ 23,930,612.00 $ 20,570,479.07 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 $ 14,377,852.00 $ 14,640,221.62 992,560.00 760,899.00 597,296.00 462,317.00 1,621 ,256.00 435,106.00 3,482,973.62 572,631.00 152,383.00 509,560.00 175,447.00 805,570.76 668,825.54 580,552.83 542,356.41 1,658,129.67 389,941.63 2,595,241 .68 540,822.56 166,044.57 576,034.37 141,522.73 14,045.00 839.65 Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCIN~ SOUB~ES (!.!SE} $ 24,140,280.62 $ 23,320,149.02 $ 209,668.62 $ 2,749,669.95 Other Sources Other Uses $ 7,364,469.41 Total Other Financing Sources (Uses) $ -7,364,469.41 Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $ 209,668.62 $ 10,114,139.36 F!.!ND BALANCE JULY 1. 2000 0.00 16,432,852.07 FUND BALANCE JUNE 30, 2Q01 $ 2091668.62 $ 61318?12.71 SPECIAL REVENUE FUND ACTUAL (BUDGET BUDGET BASIS} $ 599,237.90 $ 677,127.25 2,028,372.00 2,088, 769.26 546,250.00 454,859.84 $ 3,173,859.90 $ 3,220,756.35 $ 1,666,862.90 $ 1,880,452.25 24,232.00 66,004.00 65,338.21 45,506.98 192;165.00 184,106.57 363.81 600.00 39,753.00 57,993.00 1,143,900.00 980.73 33,402.10 369.60 59,404.63 1,082,404. 75 $ 3,191,509.90 $ 3,352,329.63 $ -17,650.00 $ -131,573.28 $ 68,881.41 $ 68,881.41 $ -17,650.00 $ -62,691.87 0.00 243,825.67 $ -171650.00 $ 1811133.80 The notes to the general-purpose financial statements are an integral part of this statement 1 CTIY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY EXHIBIT "D" NOTES TO TIlE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY The City ofDecatur Board ofEducation (School District) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The School District is not organized as a separate legal entity and does not have the power to levy taxes or issue bonds. Its budget is subject to approval by the CitY ofDecatur,Georgia. Accordingly, the City ofDecatur Board ofEducation is detemrined to be a component unit of the City of Decatur, Georgia, which is the primary government. FUND ACCOUNTING The School District uses funds and an account group to report on its financial position and the results ofits 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. AD. 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 of purchase. A General Fixed Assets Account Group is not presently maintained by the School District. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types: Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general-purpose financial statements. The general-purpose financial statements account for all State, Federal, Taxes and Other funds under control of the School District, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows: GOVERNMENTAL FUND TYPES - are used to account for all or most of a School District's educational activities. Governmental Fund Types include: GENERAL FUND - the fund used to account for all financial resources of the School District except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education. - 8- CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY EXHffiIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note I: 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. ACCOUNT GROUP GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for accrued compensated absences. 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. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group. Governmental funds are accounted for using the modified 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 ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The School District considers receivables collected within sixty days after year- 1\ end to be available and therefore susceptible to accrual. Nonexchange transactions, in which the 1 School District gives (or receives) value without directly receiving (or giving) equal vahle in i, exchange, include property taxes, local option sales taxes, intergovernmental grants and donations. I1~~, Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accrual. Revenue from grants and donations is recognized in the fiscal year in which all eligibility ! requirements have been satisfied. Expenditures are generally recognized when the related fund liability is incurred. -9- CTIY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS , JUNE 30. 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers'and bus drivers' contracts, and the resources available from the Georgia Department" of Education for'the State's share of these contracts. During fiscal year 2001, a substantial number ofperso~elofthe School District were employed for a one hundred and ninety day period beginning in August 2000 and ending in early June 2001. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2000 and ending in August 2001; State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the School District in the same twelve months. As of June 30, 2001, compensation under these employment contracts had been earned, but two ofthe twelve monthly payments, due for July and August 2001, had not been made. Payments for these two month.s were made and recorded as expenditures by the School District subsequentto June 30,2001. Also, the State's portion ofthe compensation paid in July and August 2001 was received and recorded as revenue in the fiscal year subsequent to June 30,2001. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were recorded in the year ended June 30, 2001. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed. BUDGET The City of Decatur Board 'of Education's budget is a complete financial plan for the School District's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure ofthe budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles. The budget process begins when the School District's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting ofthe 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 accord~cewith 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 Special Revenue Fund. To facilitate comparison with the budget~ the following adjustments have been made to fund balance as reflected on Exhibit "B" ofthis report: - 10- CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY EXHffiIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Special Revenue Fund FUND BALANCE JULY 1,2000 $ 257,519.25 Adjustments Inventories - July 1,2000 Food Donated Commodities Purchased Foods -8,472.97 -5,220.61 Fund Balance July 1,2000 (Budget Basis) $ 243,825.67 Excess ofRevenues and Other Financing Sources over (under) Expenditures and Other Financing Uses -62,691.87 FUND BALANCE JUNE 30, 2001 (Budget Basis) $ 181.133.80 CASH AND CASH EQillVALENTS COMPOSITION .OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-tenn investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45:'8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations. INVESTMENTS COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase 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 ofGeorgia Annotated Section 36-83-4 authorizes the School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following: ',: - 11 - I~I CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (1) Obligations issued by the State of Georgia or by other states, (2) Obligations issued by the United States government, (3) Obligations fully insured or guaranteed by the United States government or a United States government agency, (4) Obligations of any corporation of the United States government, (5) Prime banker's acceptances, (6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services, (7) Repurchase agreements, and (8) Obligations of other political subdivisions of the State of Georgia. RECEIVABLES Receivables consist ofgrant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from infonnation available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general-purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables. . PROPERTY TAXES The City of Decatur fixed the property tax levy for the 2000 tax year (calendar year) on April 5, 2000 (levy date). Taxes were due on June 1, 2000 (lien date) and could be paid in two installments . on June 1,2000 and December 20,2000 (due dates). Taxes collected on the 2000 tax year digest within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2001. The Decatur City Clerk bills and collects the property taxes for the School District. Property tax revenues during the fiscal year ended June 30, 2001 for maintenance and operations amounted to $8,635,213.70. At June 30, 2001, the School District has a deferred revenue liability of$4,828,482.22 for 2001 tax year digest collections which are budgeted to fund fiscal year 2002 operations. The tax millage rate levied for the 2000 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 18.5 mills - 12- .....- ....'" CITY OF DECATUR BOARD OF EDUCAnON - DEKALB COUNTY EXHffiIT "D" NOTES TO TIlE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 $2,904,787.11 and was recorded in the Capital Projects Fund. The State will tenninate collection ofthis tax once an additional $4,676,238.74 has been collected or on June 30,2002, whichever occurs first. 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 6n 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' 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. INTERFUND TRANSACTIONS The School District 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 or results ofoperations in conformity with generally accepted accounting - 13- CITY OF DECATIJR BOARD OF EDUCATION - DEKALB COUNTY EXHmIT "0" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. Certain reclassifications have been made to the comparative data to conform to the current year classifications. 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 ofthe face value ofsuch surety bond and the market value ofsecurities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa 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 holdingpublic 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 of development 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. - 14- CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001 Note 2: DEPOSITS AND INVESTMENTS CATEGORIZATION OF DEPOSITS At June 30, 2001, the bank balances were $10,024,506.40. The amounts ofthe total bank balances are classified into three categories of credit risk: Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the School District or by the School District's agent in the School District's name. Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the School District's name. Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the School District's name.) The School District's deposits are classified by risk category at June 30, 2001, as follows: Risk Category Bank Balance 1 $ 310,000.00 2 9,714,506.40 3 0.00 Total $10,024,506.40 CATEGORIZATION OF INVESTMENTS At June 30, 2001, the carrying value of the School District's total investments was $9,143,815.56 which is materially the same as fair value. This investment consisted entirely of funds invested in the Local Government Investment Pool administered by the State ofGeorgia, Office ofTreasury and Fiscal Services which are not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy ofthe State ofGeorgia, Office of Treasury and Fiscal Services for the Local Government Investment Pool (primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description ofthe Primary Liquidity' Portfolio is as follows: The Primary Liquidity Portfolio consists of Georgia Fund 1, which is a combination local and state government investment pool, and Fund 6. Georgia Fund 1 is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. The pool is not registered with the 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 valueis 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 - 15 - CITY OF DECATOR BOARD OF EDUCAnON - DEKALB COUNTY EXHmIT "D" NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001 Note 2: DEPOSITS AND INVESTMENTS 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 governinents; operating and trust funds of Georgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund. Investments in Georgia Fund 1 and Fund 6 are directed toward short-term instruments such as U. S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Government or any of its agencies or instrumentalities, banker's acceptances and repurchase agreementS. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2001, was 39 days. The average investment duration for Fund 6 on June 30, 2001, was 6 months. Note 3: NON-MONETARY TRANSACTIONS The School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories Note 4: RISK MANAGEMENT The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction ofassets; errors or omissions; job related illness or injuries to employees; natural disaster and unemployment compensation. The School District participates in the Georgia School Boards Association Risk .and Insuranc~ 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 agwnst members ofthe system. The School District 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 School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount ofthat loss can be reasonably estimated. Changes in the unemployment compensation claims liability during the last two fiscal years are as follows: . - 16- CITY OF DECATUR BOARD OF EDUCAnON - DEKALB COUNTY EXHIBIT "0" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30; 2001 Note 4: RISK MANAGEMENT Beginning of Year Liability Claims and Changes in Estimates Claims Paid End of Year Liability 2000 2001 $ 0.00 $ 5,836.38 $ 5,836.38 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 The School District participates in the Georgia School Boards Association Workers' Compensation Fund, a public entity risk pool organized on July I, 1992, to develop, implement, and administer a program ofworkers' compensation self-insurance for its member organizations. The School District 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 School District 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: GENERAL LONG-TERM DEBT The changes in General Long-Term Debt during the fiscal year ended June 30, 2001, were as follows: Compensated Absences Balance July 1,2000 $ 0.00 Retroactive Restatement of Prior Year Balances. 184,238.50 Balance July 1, 2000 Restated $ 184,238.50 Additions Annual Leave Earned and \ Utilized (Net) Balance June 30, 2001 II !I' - 17 - 41,779.71 $ 226,018.21 CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY EXHffiIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS' JUNE 30, 2001 Note 6: ON-BEHALF PAYMENTS The School District has recognized revenues and e~penditures in the amount of $364,146.99 for health insurance and retirement contributions paid on the School District's behalfby the following State Agencies. '. Georgia Department ofEducation Paid to the Georgia Department of Community Health For Health Insurance ofNon-Certified Personnel In the amount of$297,348.18 . Paid to the Teachers Retirement System of Georgia For Teachers Retjrement System (TRS) Employer's Cost ill the amount of$27,114.81 ,) Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $39,684.00 Note 7: SIGNIFICANT COMMITMENTS The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 200 I, together with funding available: Project Unearned Executed Contracts Funding Available From State Clairemont Elementary School Decatur High School Winnona Park Elementary School City Schools of Decatur - Capital Improvement Program $ 3,954.07 5,247,022.85 776,305.26 $ 82,015.00 1,771,939.00 48,233.70 $ 6.075515.88 $ 1.853.954.00 The amounts described in this note are not reflected in the general-purpose financial statements. Note 8: CONTINGENT LIABILITIES Amounts received or receivable principally from the Federal government are subject to audit and review by grantor.agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The School District believes thatsuch disallowances, if any, will be immaterial to its overall financial position. - 18- CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY EXHIDIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 9: 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 10: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school districts are covered by the Teachers Retirement System ofGeorgia (TRS), which is a cost-sharing multiple employer defmed benefit pension plan. TRS provides service retirement, disability retirement and survivors' benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts. TRS CONTRIBUTIONS REQUIRED ANI) MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.29% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows: Fiscal Year Percentage Contributed Required Contribution 2001 2000 1999 100% 100% 100% $ 1,638,415.12 $ 1,511 ,155.34 $ 1,518,711.54 .'~I - 19- '.'. " \J~I CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30. 2001 ASSETS Cash and Cash Equivalents Investments Accounts Receivable Inventories Food Donated Commodities < Purchased Food Total Assets SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS $ 173,187.26 $ 89,033.29 10,000.00 26,971.20 11,876.02 5,653.91 $ 227,688.39 $ ===89=.:,0:=3=3.=29= 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- $ 3,121.32 $ 20,963.26 25,903.34 68,070.03 .$ 29,024.66 $ 89,033.29 $ 11,876.02 5,653.91 181,133.80 $ $ 198,663.73 $ 0.00 0.00 $ 227,688.39 $ ===8=9=,=,0=:3=3.=29= EXHIBIT"E" FEDERAL PROGRAMS TOTALS' JUNE 30, 2001 JUNE 30, 2000 $ 63,482.01 $ 325,702.56 $ 390.832.45 10,000.00 10,000.00 83,492.01 110,463.21 118,806.69 11,876.02 5,653.91 8,472.97 5,220.61 $ 146,974.02 $ 463,695.70 $ =====5=33=,3=3:.=2':.;,,;72= $ 31,735.78 $ 92,444.04 22,794.20 $ --;":':'11.:4-6:-,.9':7':4':.:0':2:'" $ 55,820.36 $ 186,417.41 22,794.20 265.031.97 $ 58,184.98 187,066.60 30,561.89 275,813.47 $ 11,429.31 $ 11,876.02 5,653.91 8,472.97 5,220.61 $ 0.00 181.133.80 232,396.36 $ 0.00 $ 198,663.73 $ 257.519.25 $ 146,974.02 $ 463,695.70 $ =====5:=3=:3E,3=32=:.7..2= - 21 - l 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, 2001 FUND BALANCE JUNE 30 See notes to the general-purpose financial statements. - 22- $ 198,663.73 $ = = = = 0...;.=00,= EXHIBIT"F" FEDE~L PROGRAMS TOTALS YEAR ENDED JUNE 30. 2001 JUNE 30, 2000 $ 75,880.51 $ 1,579,963.03 $ 1,655,843.54 $_~=~~ 667,978.33 2,187,802.02 417.456.77 3,273.237.12 $ 1,311,946.42 $ 1,880.452.25 $ 1,944,837.10 34,769.58 45,422.98 184,106.57 304.51 980.73 33,276.10 369.60 59,137.21 47.12 65,338.21 45,506.98 184,106.57 363.81 980.73 33.402.10 369.60 59.404.63 1,082.404.75 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 $ 1.670,360.82 $ 3,352,329.63 $ 3,305,493.15 $ -14,517.28 $ -131,573.28 $ -32,256.03 3,087.97 68,881.41 58,927.02 $ -11.429.31 $ -62,691.87 $ 26,670.99 11,429.31 257,519.25 234,341.28 3.403.05 433.30 -4,093.80 600.78 $ 0.00 $ 198,663.73 $ =====2=5;,;"7=,5",,,19=.2=5= - 23- l CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 2001 ASSETS Cash and Cash Equivalents Investments Accounts Receivable Total Assets LIABILITIES AND FUND EqUITY LIABILITIES Cash Overdraft 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 REGULAR GEORGIA STATE FINANCINGAND INVESTMENT COMMISSION $ 7,778,20 $ 0.00 $ 7,778.20 $====0=.0"",0= $ 7,778,20 $ $ 7,778.20 $ =O.:.=.OO~ --'-=O.:.=.OO~ $ 7;778,20 $=====0,:=00== See notes to the general-purpose financial statements. - 24- EXHIBIT"G" SPECIAL PURPOSE LOCAL OPTION SALES TAX $ 463,357.71 $ 7,172,494.32 477,087.97 LOTTERY PROJECT TOTALS JUNE 30, 2001 JUNE 30. 2000 165,392.97 $ 636,528.88 $ 1,129,556.07 7,172,494.32 134,416.00 611,503.97 763,601.52 $ 8,112,940.00 $ 299,808.97 $ 8,420.527.17 $ 1,893,157.59 $ 223,888.35 290,201.33 $ 113,752.00 $ _ _1:...:1,;;:.31.:..7::::52:.:,.0::,:0::... 127,080.00 $ 113,752.00 $ 113,752.00 $_-..-;64~1.L.:..1.=.;69::.:..6::,:8::... $ 8,112,940.00 $ 0.00 $ 8,112.940.00 $ $ 186,056.97 0.00 186,056.97 $ 8,112,940.00 $ 186,056.97 7,778.20 8,306,775.17 $ 987,109.06 257,100.65 7,778.20 1.251.987.91 $ 8,112,940.00 $ 299,808.97 $ 8,420,527.17 $ 1,893,157.59 .1 - 25- dI' CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES CAPITAL PROJECTS FUND YEAR ENDED JUNE 30. 2001 FUND BALANCE JUNE 30 $ 7,778.20 $=====0.=.00== See notes to the general-purpose financial statements... ' , , - 26- EXHIBIT"H" SPECIAL PURPOSE LOCAL OPTION SALES TAX LOTIERY PROJECT TOTALS YEAR ENDED JUNE 30, 2001 JUNE 30, 2000 $ $ 2,904,787.11 42,602.25 $ 2,947,389.36 $ 247,316.00 $ 2,248.50 249,564.50 $ 247,316.00 $ 2,904,787.11 44,850.75 3,196,953.86 $ 21,516.00 2,870,134.69 33,052.06 2,924.702.75 $ 6,250.00 $ 6,250.00 188,535.69 $ 2,209,466.57 3,409,437.85 $ 4,236,699.45 2,180.00 22,066.75 $ 194,785.69 $ 2,211,646.57 $ 3,437,754.60 $ 4,236,699.45 $ 2,752,603.67 $ -1,962,082.07 $ -240,800.74 $ -1,311,996.70 $ 4,373,227.27 $ 2,087,920.39 $ 7,295,588.00 $ 5,284,109.00 -4,284,109.00 $ 4,373,227.27 $ 2,087,920.39 $ 7,295,588.00 $ 1,000,000.00 $ 7,125,830.94 $ 987,109.06 125,838.32 $ 60,218.65 7,054,787.26 $ 1,251,987.91 -311,996,70 1,563,984.61 $ 8,112,940.00 $ 186,056.97 $ 8,306,775.17 $ 1,251,987.91 - 27- ,1 CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2001 SCHEDULE "1" FUNDING AGENCY PROGRAM/GRANT CFDA NUMBER PASSTHROUGH ENTITY ID NUMBER FEDERAL REVENUE .INPERIOD EXPENDITURES IN PERIOD 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 .. 10.553. 10.555 NlA $ 126,261.46 (2) NlA 334,854.01 $ 1,034,666.87 (3) Total Child Nutrition Cluster $ 461,115.47 $ 1,034,666.87 Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1) 10.550 N/A 47,690.76 47,690.76 Total U. S, Department of Agriculture $ 508,806.23 $ 1,082,357.63 Corporation for National and Community Service Pass-Through From Georgia Department of Education Leam and Serve America School and Community Based Programs 94.004 NlA $ 3,732.32 Education, U. S. Department of Spedal Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education Ad Part B - Spedal Education Capadty BUilding Improvement Flow Through Preschool 84,173 84.027 84.173 NlA $ 6,077.00 $ N/A 242,677.00 NlA 22,336,00 6,077.00 242,677.00 22,336.00 Total Spedal Education Cluster $ 271,090.00 $ 271,090.00 Other Programs Dired ImpadAid 84.041 . Pass-Through From Georgia Department of Education Elementary and Secondary Education Ad Title I Even Start Grants to Local Educational Agendes 84.213 NlA 84.010 NlA TitJeli Eisenhower Professional Development 84.281 NlA Title III Technology Literacy Challenge Fund Grants 84.318 NlA TitJeVI Innovative Education Program Strategies Class Size Reduction Safe and Drug-Free Schools and Communities 84.298 NlA 84.340 N/A 84.186 NlA Stewart B. McKinney Homeless Assistance Ad Education for Homeless Children and Youth 84.196 N/A Vocational Education Basic Grants to States High School Program Basic Grant 84.048 NlA Pass-Through From City of Decatur TitieX 21 st century Community Leaming center Grant 84.287 NlA 9,077.95 221,107.72 791,492.01 20,585.00 26,772.00 108,479.00 11,022.00 17,500.00 34,261.57 2,818.73 (5) 221,107.72 791,492.01 20,585.00 9,890.39 26,772.00 108,479.00 11,022.00 17,500.00 34,261.57 3,708,30 (3) Total U. S. Department of Education $ 1,514,205.98 $ 1,515,907.99 - 28- CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2001 SCHEDULE "1" FUNDING AGENCY PROGRAM/GRANT CFDA NUMBER PASSTHROUGH ENTITY ID NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD National Science Foundation Direct Communication, Production, Research In the Classroom through Intemet Access Grant No, NCR-9710651 47,070 $ 74,835,00 $ _ _,.;,.7"",4,,,,,,83~5..;,;::'0~0 Defense, U, S, Department of Direct Department of the Anny . RO,T,C, Program $ 49,350,28 (4) Total Federal Financial Assistance $ 2,147,197.49 $ 2,676,832,94 NlA = 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 Q./rrent fiscal year, (2) Expenditures for the School Breakfast Program were not maintained separately and are Included in the 2001 Nationa.1 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 eamed on this program do not require reporting of expenditures, Major Programs are identified by an asterisk (0) in front of the CFDA number, The School District did not provide Federal Asslstance 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 acaual basis of accounting which is the basis of accounting used in the presentation of the general-purpose financial statements, See notes to the general-purpose financial statements. -29- ,l 'i !I; CITY OF DECATUR BOARD OF EpUCATION - PEKALB COUNTY . SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2001 SCHEDULE "2" AGENCY/FUNDING GOVERNMENTAL FUND TYPES SPECIAL CAPITAL GENERAL REVENUE PROJECTS FUND FUND FUND TOTAL GRANTS Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program $ 459,525.00 . $ 459,525,00 Kindergarten Program - Earty Intervention Program 56,707.00 56,707.00 Primary Grades (1-3) Program 1,461,095,00 1,461 ;095.00 . Primary Grades - Earty Intervention (1-3) Program 182,973.00 182,973.00 Upper Elementary Grades (4-5) Program 664,339.00 664,339.00 Middle School (6-8) Program 1,181,796.00 1,181,796.00 High School General Education (9-12) Program 1,053,688.00 1,053,688,00 Vocational Laboratory (9-12) Program 332,533.00 332,533.00 Students with Disabilities. Category I 92,589.00 92,589,00 Category II 141,013,00 141,013,00 Category III 682,722.00 682,722.00 CategoryN 118,391,00 118,391.00 Category V 80,169.00 80,169.00 Gifted Student'- Category VI 539,254.00 539,254.00 Remedial Education Program 146,172,00 146,172.00 A1temative Education Program 93,876,00 93,876.00 English Speakers of O1her Languages (ESOL) 30,554.00 30,554.00 Special Education Supplemental Speech 5,138,00 5,138.00 Media Center Program 221,879.00 221,879,00 Staff and Professional Development 59,967.00 . 59,967.00 Indirect Cost 1,757,582.00 1,757,582.00 Categorical Grants Pupil Transportation Regular 76,134,00 76:134.00 Bus Replacement 24,625.00 24,625.00 Nursing Services 66,816.00 66,816,00 Principal Supplements 10,847.00 10,847.00 Vocational Supervisors 13,166,00 13,166.00 Mid-term Adjustment HoldHarmless 253,085.00 253,085.00 Education Equalization Funding Grant 140,964.00 140,964.00. Food Services $ \67,454.00 67,454,00 Vocational Education 36,601.00 36,601.00 Other State Programs At-Risk Summer School Program 2,975.72 2,975.72. Environmental Science Program 750,00 . 750,00 Health Insurance 297,348.18 297,348.18 Mentor Teachers 3,423,00 3,423.00 Preschool Handicapped Program 41,774.00 41,774.00 Remedial Summer School 3,780,50 3,780.50 Teachers' Retirement 27,114.81 27,114.81 Lottery Programs Computers in the Classroom 56,123.00 56,123.00 Exceptional GrowIh-Capital Outlay $ 247,316,00 247,316,00 Office of School Readiness Pre-Kindergarten Program 477,669.74 477,669.74 Office of Treasury and Fiscal Services Public School Employees Retirement 39,684.00 39,684.00 CONTRACTS Education, Georgia Department of Georgia's Reading Challenge Georgia's Reading Rrst Foreign Language Model Program 28,054.00 53,302.00 75,880.51 28,054.00 75,880.51 53,302.00 See notes to the general-purpose financial statements. $ 10,482,406.21 $ 677,127.25 $ 247,316.00 $ 11,406,849.46 - 30- CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS YEAR ENDED JUNE 30. 2001 SCHEDULE "3" PROJECT Renovations, modifications, additions and equipment for the Central Office, Clairemont Elementary, College Heights Elementary, D'ecatur 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. ORIGINAL ESTIMATED COST (1) CURRENT ESTIMATED COSTS (2) AMOUNT EXPENDED IN CURRENT YEAR (3) AMOUNT EXPENDED IN PRIOR YEARS (3) PROJECT STATUS $ 15,422,200.00 $ 15,422,200.00 $ 3,437,754.60 $ 7,774,717.35 Ongoing (1) The School District's original cost estimate as specified in the resolution calling for the Imposition of the Local Option Sales Tax. (2) The School District's current est/mate of total cost for the project. Includes all cost from project incept/on to completion. (3) The voters of DeKalb County approved the imposition of a 1% sales tax to fund the above project and retire associated debt. Amounts expended for this project may Include sales tax proceeds, state, local property taxes and/or other funds over the life of the project. iI See notes to the general-purpose financial statements. "II d - 31 - CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE) ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2001 SCHEDULE "4" DESCRIPTION ALLOTMENTS . FROM GEORGIA DEPARTMENT OF EDUCATION (1) ELIGIBLE QBE PROGRAM COSTS SALARIES OPERATIONS TOTAL Direct Instructional Programs Kindergarten Program $ Kindergarten Program-Early Intervention Program Primary Grades (1-3) Program Primary Grades-Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Category II Category III Category IV Category V Gifted Student - Category VI Remedial Education Program Altemative Education Program English Speakers of Other Languages (ESOl) 558,375.00 $ 68,906.00 1,775,398.00 222,334.00 807,249.00 1,436,019.00 1,280,352.00 404,066.00 1,360,954.00 655,255.00 177,615.00 114,070.00 37,126.00 591,587.40 $ 109,585,93 1,908,652.95 206,708.22 1,205,027,35 1,642,493.26 1,727,923.29 522,230.91 85,567.55 178,858.47 1,561,628.53 99,860.03 22,191.95 593,388.34 228,016.73 185,433.73 55,901.85 29,327.37 $ 714.10 68,817.67 5,566.62 61,529.93 41,048.39 87,502:61 55,649.00 141.69 423.49 34,691.43 11,536.01 7,165.53 418.23 135.00 620,914.77 110,300.03 1,977,470.62 212,274.84 1,266,557.28 1,683,541.65 1,815,425.90 577,879.91 141.69 85,567.55 179,281.96 1,596,319.96 111,396.04 22,191.95 600,553.87 228,016.73 185,851:96 56,036.85 TOTAL DIRECT INSTRUCTIONAL PROGRAMS $ 8,897,719.00 $ 10,925,056.49 $ 404,667.07 $ 11,329,723.56 Media Center Program Staff and Professional Development 269,608.00 72,866.00 502,705.23 73,492.72 67,027.55 91,221.57 569,732.78 164,714.29 TOTAL QBE FORMULA FUNDS $ 9,240,193.00 $ 11,501,254.44 $ 562,916.19 $ 12,064,170.63 (1) Comprised of State Funds plus Local Five Mill Share. See notes to the general-purpose financial statements. - 32- CITY OF DECATUR BOARD OF EDUCATION DEKALB COUNTY GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBEl ALLOTMENTS AND EXPENDITURES BY SITE YEAR ENDED JUNE 30. 2001 SCHEDULE "5" Oakhurst Elementary School Renfroe Middle School Clairemont Elementary School College Heights Elementary School Decatur High School Westchester Elementary School Fifth Avenue Elementary School Winnona Park Elementary School Glennwood Elementary School Central Office (Alternative Education Program) Other Auxiliary Facility TOTAL (1) Comprised of State Funds plus Local Five Mill Share. ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) ELIGIBlE aBE PROGRAM COSTS $ . 504,494.00 $ 626,866.24 2,044,573.00 2,406,678.73 818,531.00 1,036,796.43 561,588.00 664,871.44 2,297,550.00 3,010,498.44 755,094.00 977,354.01 461,255.00 672,960.79 770,973.00 936,243.66 569,591.00 657,533.39 114,070.00 227,042.65 112,877.78 $ 8,897,719.00 $ 11,329,723.56 See notes to the general-purpose financial statements. - 33- SECTIONll I I COMPLIANCE AND INTERNAL CONTROL REPORTS i RUSSELL W. HINTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washinglon Streel, S.w., Suile 214 Allanla. Georgia 30334-8400 May 17,2002 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members ofthe City ofDecatur Board ofEducation REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Ladies and Gentlemen: We have audited the financial statements ofCity of Decatur Board of Education as of and for the year ended June 30, 2001, and have issued our report thereon dated May 17,2002. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general-purpose financial statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards,. issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether City of 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 perfonning our audit, we considered City ofDecatur Board ofEducation's internal control over fmancial 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 2001YB-40 ...... a control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be reportable condition. 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 ofOecatur Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompanying Schedule ofFindings and Questioned Costs as item FS-773 1-01-01. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level 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 nonnal 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, we consider item FS-773 1-01-02 to be a material weakness. This report is intended solely for the infonnation and use ofthe management, members ofthe 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, w~ Rus ell W. Hinton State Auditor I' RWH:gp I 2001YB-40 I I' RUSSELL W. HINTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Slreet. S.w.. Suite 2 J4 Atlanta. Georgia 30334-8400 May 17,2002 Honorable Roy E. Barnes, Governor Members of the General Assembly Members ofthe State Board ofEducation and Superintendent and Members of the City ofDecatur Board of Education REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-l33 Ladies and Gentlemen: Compliance We have audited the compliance 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 30,2001. City of Decatur Board ofEducation's major Federal programs are identified in the Summary of Auditor's Results Section of the accompanying Schedule ofFindings aild Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of City of Decatur Board of Education's management. Our responsibility is to express an opinion on City ofDecatur 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 ofthe 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 perfonning 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 detennination on City of Decatur Board of Education's compliance with those requirements. 2001SA-1O In our opinion, the City of Decatur Board of Education 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, 2001. 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-B3. 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 ofrisk 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 ofthe management, members ofthe 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, ,,, W~..$. I' Russ 11 W. Hinton State Auditor RWH:gp 2001SA-1O SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS I~ CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 . PRIOR -YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS FS-7731-99-01 FS-7731-99-02 FS-7731-00-01 FS-7731-00-02 FS-7731-00-03 FS-7731-00-04 Further Action Not Warranted Further Action Not Warranted Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Unresolved - See Corrective Action/Responses CORRECTIVE ACTIONIRESPONSES GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7731-00-04 Due to current staffing limitations and budgetary considerations prohibiting the hiring of additional administrative staff, the School District has decided not to pursue the recording of general fixed assets on the financial statements. I I . ," . ", " \' !' SECTION IV FINDINGS AND QUESTIONED COSTS CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 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 of the Financial Statements The audit report for the City ofDecatur Board ofEducation disclosed a fmancial statement reportable condition related to the following control category. General Fixed Assets The reportable condition described, above 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 ofReport 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 .51O(a) ofOMB Circular A-l33 The City ofDecatur Board ofEducation's audit did not disclose audit findings required to be reported by section .510(a) ofOMB Circular A-133. 7. Major Programs Fed~ral awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program 8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00. 9. Low Risk Auditee The City of Decatur Board of Education qualified as a low risk auditee based on a waiver granted by the U. S. Department ofEducation. - 1- li CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 3D. 2001 II FINANCIAL STATEMENT FINDINGS AND QUESTIQNED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-7731-:01-01 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 ofthe School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the .school District and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records shoiJld be maintained ofall additions and deletions to the General Fixed Assets Account Group. ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. -2-