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, 2002

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STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS

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, 2002
RECEIVED
JUN 2 4 2003
DOCUMENTS UGA LIBRARIES
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 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 ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

7

D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

8

ADDITIONAL 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

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 0MB CIRCULARA-133
SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION 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
March 14, 2003

Honorable Sonny Perdue, 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, 2002, 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 opm1on.
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:

2002ARL-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.
* For fiscal year 2002, the School District changed its method ofaccounting for the final
two payments on one hundred and ninety day employment contracts and the related revenue due from the State to fund these contracts. Adjustments have been made in the fiscal year 2002 financial statements to record expenditures for salaries and fringe benefits earned by employees through June 30, 2002, (even though paid in July and August 2002) and the related revenue due from the State to fund these contracts. No adjustment was made for the similar salaries and benefits earned in fiscal year 2001 but recorded in fiscal year 2002 as this information was not readily available. The net effect of the above accounting treatment resulted in the accompanying financial statements reflecting fourteen months of expenditures for a majority of General Fund salaries and fringe benefits and fourteen months of revenue from the State to fund these contracts. Generally accepted accounting principles require that expenditures 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, 2002, 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 March 14, 2003, on our consideration ofthe City ofDecatur Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions oflaws, 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 or the City of Decatur Board of Education taken as a whole. The accompanying 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 r~quired part of the
2002ARL-13

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 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 2002ARL-13

State Auditor

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. 2002

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

$ 6,299,188.89 $ 285,431.36

2,019,502.32

10,000.00

1,600,419.18

149,550.84

15,315.54 8,156.65

Total Assets
LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retainages Payable Deferred Revenue Compensated Absences
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Inventories Food Donated Commodities Purchased Food For SPLOST Projects For State Capital Outlay Projects Unreserved Undesignated
Total Fund Equity

$ 91919111 o.39 $ =.....;,;46_s_:4_54.;.;,;;.;39;..

$

761,733.14 $

1,930,253.12

456.79

54,110.54 249,628.77
30,072.23

5,319,649.19

7,026.00

$ 8,012,092.24 $ 340,837.54

$

15,315.54

8,156.65

$ 1,907,018.15 $ 1,907,018.15 $

104,144.66 127,616.85

Total Liabilities and Fund Equity

$

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

EXHIBIT"A"

TYPES CAPITAL
PROJECTS FUND
$ 3,493,062.82
3,538,373.13
426,949.90

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

(Memorandum Only)

JUNE 30, 2002

JUNE 30, 2001

$ 10,077,683.07 $ 8,006,453.78

5,567,875.45

9, 153,815.56

2,176,919.92

2,904,300.39

- - - - - $ _ ___,;2=..:;0c...;.1.i..a.7~51..;.;..7.;...4"-,.

15,315.54 8,156.65
201 751.74

11,876.02 5,653.91
226,018.21

$ 7,458,385.85 $

201 751.74 $ 18,047,702.37 $ 20,308,117.87

$

306,393.75

952,152.72 479,092.00
$
$ 1,737,638.47 $

$ 201,751.74

1, 122,237.43 $ 2,179,881.89
30,529.02 952,152.72 479,092.00 5,326,675.19 201,751.74

201,751.74 $ 10,292,319.99 $

106,502.22 186,417.41
22,794.20
113,752.00 4,828,482.22
226,018.21
5,483,966.26

$ 4,001,419.11 1,711,550.07
7 778.20
$ 5,720,747.38

$

15,315.54 $

11,876.02

8,156.65

5,653.91

4,001,419.11

8,112,940.00

1,711,550.07

186,056.97

2,018,941.01

6,507,624.71

$ 7,755,382.38 $ 14,824,151.61

$ 7,458,385.85 $

201,751.74 $ 18,047,702.37 $ 20,308,117.87

-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, 2002

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

$ 11,592,074.78 $ 63,649.01
15,388,131.58 790,324.78
$ 2718341180.15 $

679,044.24 2,066,268.28
461,455.44
312061767.96

$ 18,329,163.34 $
1,017,203.69 830,173.31 668,483.45 554,062.70
1,693,669.52 359,777.26
2,634,583.41 509,041.00 398,298.18 28,256.48 203,850.12 25,109.00

$" 27,251,671.46 $

$

582,508.69 $

1,827,918.19
84,334.26 43,229.47
155,046.42 2,516.72
12,519.49 67,138.22
646.67 1,095,230.95
1,573.96
31290, 154.35
-83,386.39

$ $ -4,994,203.25
$ -419941203.25 $

6,397.25 61397.25

$ -4,411,694.56 $ 6,318,712.71

-76,989.14 198,663.73

3,439.52 21502.74

FUND BALANCE JUNE 30

$ 11901,018.15 $ _ _1_2_1..,,a_1..a..s.s_

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

-4-

EXHIBIT"B"

CAPITAL PROJECTS
FUND

TOTALS

(Memorandum Only) YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$ 1,676,760.10 $ 13,947,879.12 $ 11,406,849.46

2,129,917.29

2,147,197.49

2,710,233.19

18,098,364.77

11,540,000.81

129,073.38

1,380,853.60

1,894,141.52

$ 4,516,066.67 $ 35,557,014.78 $ 26,988,189.28

$ 20,157,081.53 $ 16,520,673.87

$ 12,089,900.46

1,101,537.95 873,402.78 668,483.45 709,109.12
1,696, 186.24 359,777.26
2,647,102.90 576,179.22 398,298.18 28,903.15
1,299,081.07 25,109.00
12,091,474.42

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

$ 12,089,900.46 $ 42,631,726.27 $ 30,110,233.25

$ -7,573,833.79 $ -7 074 711.49 $ -3, 122,043.97

$ 4,987,806.00 $ 4,994,203.25 $ 7,364,469.41

-4,994,203.25

-7,364,469.41

$ 4,987,806.00 $

0.00 $

0.00

$ -2,586,027.79 $ -7,074,711.49 $ -3,122,043.97

8,306,775.17

14,824,151.61

17,942,359.23

3,439.52 2,502.74

3,403.05 433.30

$ 5,720,747.38 $ 7,755,382.38 $ 14,824,151.61

-5-

CITY OF DECATUR BOARD OF EDUCATION-DEKALB COUNTY COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30 2002

EXHIBIT"C"

GENERAL FUND

BUDGET

ACTUAL

REVENUES
State Funds Federal Funds Taxes Other Funds

$ 9,847,427.00 $ 11,592,074.78

46,800.00

63,649.01

14,142,099.00

15,388,131.58

797 949.00

790,324.78

Total Revenues EXPENDITURES

$ 24,834,275.00 $ 27,834,180.15

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

$ 16,528,902.00 $ 18,329,163.34

769,097.00 807,151.00 713,232.00 441,506.00 1,632,411.00 207,831.00 2,455,927.00 512,301.00 531,483.00
234,434.00

1,017,203.69 830,173.31 668,483.45 554,062.70
1,693,669.52 359,777.26
2,634,583.41 509,041.00 398,298.18 28,256.48 203,850.12 25,109.00

Total Expenditures Excess of Revenues over (under) Expenditures

$ 24,834,275.00 $ 27,251,671.46

$

0.00 $ 582,508.69

OTHER FINANCING SOURCES (USESl

Other Sources Other Uses
Total Other Financing Sources (Uses)

$ -4,994,203.25 $ -4,994,203.25

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $
FUND BALANCE JULY 1 2001

0.00 $ -4,411,694.56

0.00

6 318 712.71

FUND BALANCE JUNE 30. 2002

s _ _ _ _o;;,;,.o;;.;.o . s 1901018.15

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 679,044.24

$ 2,783,042.00

2,066,268.28

461 455.44

$ 2,783,042.00 $ 3,206,767.96

$ 1,276,359.00 $ 1,827,918.19

47,145.00 53,549.00

84,334.26 43,229.47

164,469.00 1,400.00

155,046.42 2,516.72

500.00 79,772.00

12,519.49 67,138.22

10,976.00 1,137,775.00

646.67 1,095,230.95

11 097.00

1 573.96

$ 2,783,042.00 $ 3,290,154.35

$

0.00 $ -83 386.39

$

6,397.25

$

6 397.25

$

0.00 $ -76,989.14

0.00

181 133.80

$~--,;;;0.~00;;., $ 104144.66

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, 2002
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 determined 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. 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 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 the 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 EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30, 2002
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.
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 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. The School District considers receivables collected within sixty days after yearend to be available. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales taxes, intergovernmental grants and donations. Revenue forpropertytaxes 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-

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30, 2002
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
For fiscal year 2002, the School District changed its method of accounting for the final two payments on one hundred and ninety day contracts and for the related revenue due from the State to fund these contracts. Adjustments have been made in the fiscal year 2002 financial statements to record expenditures for salaries and fringe benefits earned by employees through June 30, 2002, (even though paid in July and August 2002) and the related revenue due from the State to fund these contracts. This change is in accordance with generally accepted accounting principles. No adjustment was made for the similar salaries and benefits earned in fiscal year 2001 but recorded in fiscal year 2002 as this information was not readily available.
The net effect ofthe above accounting treatment resulted in the accompanying financial statements reflecting fourteen months of expenditures for a majority of General Fund salaries and fringe benefits and the related revenue due from the State to fund these contracts. 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 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 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 EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Special Revenue
Fund

FUND BALANCE JULY 1,2001

$ 198,663.73

Adjustments Inventories - July 1, 2001 Food Donated Commodities Purchased Foods

-11,876.02 -5,653.91

Fund Balance July 1, 2001 (Budget Basis)

$ 181,133.80

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

-76,989.14

FUND BALANCE JUNE 30, 2002 (Budget Basis)

$ 104,144.66

CASH AND CASH EQUIVALENTS

COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-term 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 and 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:

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

- 11 -

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30, 2002

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(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 information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general-purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

PROPERTY TAXES

The City of Decatur fixed the property tax levy for the 2001 tax digest year (calendar year) on March 19, 2001 (levy date). Taxes were due on June I, 2001 (lien date) and could be paid in two installments on June I, 2001 and December 20, 2001 (due dates). Taxes collected within the current fiscal year or within 60 days after year-end on the 2001 tax digest are reported as revenue in fiscal year 2002. The Decatur City Clerk bills and collects the property taxes for the School District. Property tax revenues during the fiscal year ended June 30, 2002 for maintenance and operations amounted to $14,955,484.58.

At June 30, 2002, the School District has a deferred revenue liability of$5,319,649.19 for 2002 tax year digest collections which are budgeted to fund fiscal year 2003 operations.

The tax millage rate levied for the 2001 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 EDUCATION - DEKALB COUNTY EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30, 2002
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SALES TAXES
Special Purpose Local Option Sales Tax revenue during the year amounted to $2,710,233.19 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years.
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 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 DECATUR BOARD OF EDUCATION - DEKALB COUNTY EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30. 2002
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.
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 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. 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 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 any one ofor 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 ofthe 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. 2002

Note 2: DEPOSITS AND INVESTMENTS

CATEGORIZATION OF DEPOSITS At June 30, 2002, the bank balances were $11,150,851.04. 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, 2002, as follows:

Risk Category

Bank Balance

I

$ 300,000.00

2

10,850,851.04

3

0.00

Total

$11.150.851.04

CATEGORIZATION OF INVESTMENTS At June 30, 2002, the carrying value of the School District's total investments was $5,557,875.45 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 I 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

- 15 -

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30, 2002
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 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.
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, 2002, was 0.12 years. The average investment duration for Fund 6 on June 30, 2002, was 0.75 years.
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 of assets; errors or omissions; job related illness or injuries to employees; acts of God and unemployment compensation.
The School District participates in the Georgia School Boards Association Risk and Insurance Management System, a public entity risk pool organized on July I, 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 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 (including coverage for flood and earthquake), 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. The School District has not experienced any unemployment claims during the last two fiscal years.
- 16-

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30, 2002

Note 4: RISK MANAGEMENT

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 suretybonds 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, 2002, were as follows:

Compensated Absences

Balance July 1, 2001

$ 226,018.21

Deductions Annual Leave Earned and Utilized (Net)

-24,266.47

Balance June 30, 2002

$ 201,751.74

Note 6: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $321,544.77 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 of Non-Certified Personnel In the amount of$296,637.77

- 17 -

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
mNE 30. 2002

Note 6: ON-BEHALF PAYMENTS

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$24,907.00

Note 7: SIGNIFICANT COMMITMENTS

The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2002, together with funding available:

Project

Unearned Executed Contracts

Funding Available From State

Decatur High School Oakhurst Elementary School Winnona Park Elementary School

$ 246,479.52 816,570.23 57,763.76

$ 177,193.90

$ 1,120,813.51 $ 177,193.90

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 that such disallowances, if any, will be immaterial to its overall financial position.

Note 9: ACCUMULATED EMPLOYEES' LEAVE

Regular full-time twelve month employees earn vacation leave with pay from ten to fifteen days per year based on years of continuous service with a maximum accumulation of thirty 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

- 18 -

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY EXHIBIT "D" NOTES TO TifE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30, 2002

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 of Georgia (TRS), which is a cost-sharing multiple employer defined 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 AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% oftheir gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 9.24% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2002 2001 2000

100% 100% 100%

$1,456,313.36 $1,638,415.12 $1,511,155.34

- 19 -

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 2002

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
Inventories Food Donated Commodities Purchased Food
Total Assets
LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund Equity

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

151,499.78 $

80,187.84

10,000.00

20,405.40

15,315.54 81156.65

$

2051377.37 $ =====8=0=1'=87==84=

$

5,398.37 $

16,158.42

72,362.15

57,003.42

71026.00

$

77,760.52 $

801187.84

$

15,315.54

8,156.65

104,144.66 $

0.00

$

127.616.85 $

0.00

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

$

205.377.37 $ ===8=0=1',..87=.8=4=

EXHIBIT"E"

FEDERAL PROGRAMS

TOTALS

JUNE 30, 2002

JUNE 30, 2001

$

53,743.74 $

285,431.36 $

325,702.56

10,000.00

10,000.00

129,145.44

149,550.84

110,463.21

15,315.54 8,156.65

11,876.02 5,653.91

$

182,889.18 $

468,454.39 $ ==46====3,=6=95=.7=0=

$

32,553.75 $

54,110.54 $

55,820.36

120,263.20

249,628.77

186,417.41

30,072.23

30,072.23

22,794.20

7.026.00

$

182.889.18 $

340.837.54 $

265,031.97

$

$ _ _ _ _o_.o_o_

$

0.00 $

15,315.54 $ 8,156.65

11,876.02 5,653.91

104,144.66

181,133.80

127,616.85 $ _---'1=98=,6=6-=..:3c.:...73=-

$

182,889.18 $

468,454.39 $======4==6=3..6.9.==5=.7==0=

- 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, 2002

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 Central Support Services Other Support Services Food Services Operation
Capital Outlay
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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

66,502.00 $

488,559.52

461,455.44

$ 1,016,516.96 $

612,542.24 612,542.24

$

579,195.46

35,692.53 111.63

530.00

$ 1,093,506.10

$ 1,093,506.10 $

$

-76,989.14 $

615,529.62 -2,987.38

$

-76,989.14 $

198,663.73

3,439.52 2,502.74

2,987.38
0.00 0.00

FUND BALANCE JUNE 30
See notes to the general-purpose financial statements. -22-

$

127,616.85 $=====0=.0=0=

EXHIBIT"F"

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2002

JUNE 30 1 2001

$

679,044.24 $

677,127.25

$ 1,577,708.76

2,066,268.28

2,088,769.26

461,455.44

454,859.84

$ 1,577,708.76 $ 3,206,767.96 $ 3,220,756.35

$ 1,248,722.73 $ 1,827,918.19 $ 1,880,452.25

48,641.73 43,117.84 155,046.42
2,516.72 12,519.49 66,608.22
646.67 1,724.85 1 573.96

84,334.26 43,229.47 155,046.42
2,516.72 12,519.49 67,138.22
646.67 1,095,230.95
1,573.96

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

$ 1,581,118.63 $ 3,290,154.35 $ 3,352,329.63

$

-3,409.87 $

-83,386.39 $

-131,573.28

3 409.87

6,397.25

68,881.41

$

0.00 $

-76,989.14 $

-62,691.87

0.00

198,663.73

257,519.25

3,439.52 2,502.74

3,403.05 433.30

$

0.00 $

127,616.85 $ ==1=9=8=,6=63....7..3.....

- 23-

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

ASSETS Cash and Cash Equivalents Investments Accounts Receivable

REGULAR

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$

7,778.20 $

1,900,222.31

Total Assets

$

7,778.20 $===1,=90=0=,2=22==31=

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

$

5,050.65

83,995.56

265,019.00

$

354,065.21

$

1,546,157.10

$

7,778.20

0.00

$

7i178.20 $

1,5461157.10

Total Liabilities and Fund Equity

$

7,778.20 $ =====l1,=90=0=,2=22==31==

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

EXHIBIT"G"

SPECIAL PURPOSE LOCAL OPTION SALES TAX
$ 1,419,669.34 $
3,538,373.13
426,949.90

LOTTERY PROJECT

TOTALS JUNE 30, 2002 JUNE 30, 2001

165,392.97 $ 3,493,062.82 $

636,528.88

3,538,373.13

7,172,494.32

426,949.90

611,503.97

$ 5,384,992.37 $

165,392.97 $ 7,458,385.85 $ 8,420,527.17

$

301,343.10

868,157.16

214,073.00

$ 1,383,573.26

$

306,393.75

952,152.72

479,092.00 $

$ 1,737,638.47 $

113,752.00 113,752.00

$ 4,001,419.11
$
0.00
$ 4,001,419.11 $

$ 165,392.97
0.00
165,392.97 $

4,001,419.11 $ 1,711,550.07
7 778.20
5,720,747.38 $

8,112,940.00 186,056.97
7,778.20
8,306,775.17

$ 5,384,992.37 $

165,392.97 $ 7,458,385.85 $ 8,420,527.17

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, 2002

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

.
REGULAR

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$ 1,676,760.10

$

0.00

$

0.00 $ 1,676,760.10

$

215,381.94 $ 6,090,818.76

5 118.00

$

215,381.94 $ 6,095,936.76

$ -215,381.94 $ -4,419,176.66

$

215,381.94 $ 5,965,333.76

$

215,381.94 $ 5,965,333.76

$

0.00 $ 1,546,157.10

7,778.20

0.00

FUND BALANCE JUNE 30

$

7 778.20 $====1''=54,,;,,;6:!:,,1=5=7;,.;,10~

See notes to the general-purpose financial statements.

EXHIBIT"H"

SPECIAL PURPOSE LOCAL OPTION SALES TAX

LOTTERY PROJECT

TOTALS

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$ $ 2,710,233.19
129,073.38

0.00 $ 0.00 $

1,676,760.10 $ 2,710,233.19
129,073.38
4,516.066.67 $

247,316.00 2,904,787.11
44,850.75
3.196.953.86

$ 4,827,776.47 $ 5 867.41
$ 4,833,643.88 $
$ -1.994.337.31 $

944,937.88 $

$ 12,078,915.05
10,985.41

944,937.88 $ 12.089,900.46 $

-944,937.88 $ -7.573,833.79 $

6,250.00 3,409,437.85
22,066.75
3,437,754.60
-240.800.74

$ 4,987,806.00 $ -7, 104,989.58
$ -2.117.183.58 $

1,058,689.88 $ 12,227,211.58 $

-134.416.00

-7.239,405.58

924.273.88 $ 4.987,806.00 $

7,295,588.00 7,295,588.00

$ -4, 111,520.89 $ 8,112,940.00

-20,664.00 $ -2,586,027.79 $

186,056.97

8,306?75.17

7,054,787.26 1,251,987.91

$ 4,001,419.11 $

165,392.97 $ 5,720,747.38 $ 8,306,775.17

-27-

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30. 2002

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

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

NIA $ 119,404.61

(2)

N/A

319,797.06 $ 1,044,148.25 (3)

Total Child Nutrition Cluster

$ 439,201.67 $ 1,044,148.25

Other Programs

Pass-Through From Georgia Department of Education

Food and Nutrition Program

Food Distribution Program (1)

10.550

NIA

49,357.85

49,357.85

Total U.S. Department of Agriculture

$ 488,559.52 $ 1,093,506.10

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

84.173
. 84.027
. 84.173

NIA $ 6,177.00 $

NIA

300,448.55

N/A

23,287.00

6,177.00 303,799.52 (3)
23,287.00

Total Special Education Cluster

$ 329,912.55 $

333,263.52

Other Programs

Pass-Through From Georgia Department of Education

Elementary and Secondary Education Act

Title I

Even Start

84.213

NIA

Grants to Local Educational Agencies

84.010

NIA

Title ll

Eisenhower Professional Development

84.281

NIA

Title VI

Innovative Education Program Strategies

84.298

NIA

Class Size Reduction

84.340

NIA

Safe and Drug-Free Schools and Communities

84.186

NIA

Stewart B. McKinney Homeless Assistance Act

Education for Homeless Children and Youth

84.196

NIA

Vocational Education - Basic Grants to States

High School Program

Basic Grant

84.048

NIA

Pass-Through City of Decatur

TitleX

21st Century Community Leaming Center Grant

84.287

NIA

192,821.52 796,670.14
26,924.00 26,383.00 134,488.00 10,613.00 22,000.00
29,179.00
8,717.55

192,821.52 796,670.14
26,924.00 26,383.00 134,488.00 10,613.00 22,000.00
29,237.90 (3)
8,717.55

Total U.S. Department of Education

$ 1,577,708.76 $ 1,581,118.63

-28-

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30. 2002

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Defense, U. S. Department of Direct Department of the Army R.O.T.C. Program

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

$ 63,649.01

(4)

Total Federal Financial Assistance

$ 2,129,917.29 $ 2,674,624.73

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 separately and are included in the 2002 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.

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

The School District 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.

See notes to the general-purpose financial statements.

-29-

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2002

SCHEDULE 2

A@ENCY/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

$ 578,902.00

Kindergarten Program Early Intervention Program

34,923.00

Primary Grades (1-3) Program

1,395,428.00

Primary Grades Early Intervention (1-3) Program

131,972.00

Upper Elementary Grades (4-5) Program

638,388.00

Upper Elementary Grades (4-5} Program Early Intervention

86,135.00

Middle Grades (6-8) Program

1,215,339.00

High School General Education (9-12) Program

1,034,964.00

Vocational Laboratory (912) Program

301,560.00

Students with Disabilities

Category I

1,105,685.00

Gifted Student - Category VI

449,047.00

Remedial Education Program

54,354.00

Alternative Education Program

93,831.00

English Speakers of Other Languages {ESOL)

43,151.00

Media Center Program

216.417.00

20 Days Additional Instruction

64,468.00

Staff and Professional Development

39,284.00

Indirect Cost

445,019.00

FacmtyM&O

590,288.00

School Administration

636,314.00

Categorical Grants

Pupil Transportation

Regular

80,184.00

Bus Replacement

26,457.00

Sparsity

20,000.00

Nursing Services

64,744.00

Principal Supplements

10,330.00

Vocational Supervisors

12,916.00

Mid-term Adjustment Hold-Harmless

239,349.00

Deferred Summer Salaries (Current Year)

1,270,863.00

Education Equalization Funding Grant

56,021.00

Food Services

$ 66,502.00

Other State Programs

Extended Day- Technology/Career

12,522.21

Health Insurance

296,637.77

K-3 Statewide Reading Program

84,000.00

Mentor Teachers

1,836.00

National Teacher Certification

10,689.00

Outdoor Classrooms State Grant

750.00

Post Secondary Options Spring

594.00

Preschool Handicapped Program

65,521.00

48 Statewide After School Program

20,680.80

Vocational Industry Certification

15,000.00

Lottery Programs

Assistive Technology

7,026.00

Computers in the Classroom

114,763.00

$ 578,902.00 34,923.00
1,395,428.00 131,972.00 638,388.00 86,135.00
1,215,339.00 1,034,964.00
301,560.00
1,105,685.00 449,047.00 54,354.00 93,831.00 43,151.00 216,417.00 64,468.00 39,284.00 445,019.00 590,288.00 636,314.00
80,184.00 26,457.00 20,000.00 64,744.00 10,330.00 12,916.00 239,349.00 1,270,863.00 56,021.00 66,502.00
12,522.21 296,637.77
84,000.00 1,836.00
10,689.00 750.00 594.00
65,521.00 20,680.80 15,000.00
7,026.00 114,763.00

Georgia State Financing and Investment Commission Reimbursement on Construction Projects

$ 1,676,760.10

1,676,760.10

Office of School Readiness Pre-Kindergarten Program

490,753.24

490,753.24

Office of Treasury and Fiscal Services Public School Employees Retirement

24,907.00

24,907.00

CONTRACTS Education, Georgia Department of Foreign Language Model Program Georgia's Reading Challenge

104,604.00 18,000.00

104,604.00 18,000.00

See notes to the general-purpose financial statements.

$ 11,592,074.78 $ 679,044.24 $ 1,676,760.10 $ 13,947,879.12

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2002

SCHEDULE "3"

PROJECT

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS (3)

PROJECT STATUS

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

$ 15,422,200.00 $ 23,302,372.41 $ 12,089,900.46 $ 11,212,471.95

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 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 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.

See notes to the general-purpose financial statements.

- 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, 2002

SCHEDULE "4"

DESCRIPTION
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 Upper Elementary Grades-Early Intervention (4-5) Program Middle Grades (6-8) 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 Ill Category IV CategoryV Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL)
TOTAL DIRECT INSTRUCTIONAL PROGRAMS
Media Center Program Staff and Professional Development

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

$

721,704.00 $ 1,019,260.26 $ 24,170.97 $ 1,043,431.23

43,537.00

167,691.98

2,886.99

170,578.97

1,739,647.00

2,396,488.32

262,308.01

2,658,796.33

164,526.00

246,682.34

3,963.83

250,646.17

795,862.00

1,355,849.71

56,995.71

1,412,845.42

107,383.00 1,515,134.00 1,290,265.00
375,948.00 1,378,431.00
559,816.00 67,762.00 116,977.00 53,796.00

143,824.16 16,193.14 2,301,230.55 2,212,257.53 512,925.19
115,307.70 183,412.95 1,924,153.66 128,792.31
2,863.80 812,234.10 110,443.20 170,858.41
80,480.36

851.13
100,839.14 113,624.94
81,915.17 -40.13
4,028.69 2,569.10 20,345.02 14,094.68 5,431.84 12,496.98
159.51

144,675.29 16,193.14
2,402,069.69 2,325,882.47
594,840.36 -40.13
119,336.39 185,982.05 1,944,498.68 142,886.99
8,295.64 824,731.08 110,443.20 171,017.92
80,480.36

$

8,930,788.00 $ 13,900,949.67 $ 706,641.58 $ 14,607,591.25

269,801.00 48,975.00

555,757.10 50,849.18

97,525.51 92,060.55

653,282.61 142,909.73

TOTAL QBE FORMULA FUNDS

$

9,249,564.00 $ 14,507,555.95 $ 896,227.64 $ 15,403,783.59

(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 (QBE)
ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2002

SCHEDULE "5"

SITE
Oakhurst at Fifth Avenue Elementary School 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 QBE PROGRAM COSTS

$

716,775.00 $

1,238,426.21

16,212.13

2,131,773.00

3,333,078.50

735,612.00

1,299,730.05

618,476.00

1,067,060.04

2,289,899.00

3,781,636.47

794,290.00

1,380,872.11

80,555.60

908,885.00

1,314,006.86

618,101.00

1,011,890.67

116,977.00

28,662.85

55,459.76

$

8,930,788.00 $ 14,607,591.25

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

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

w. RtJSSELL

HINTON

STATE AUDITOR

(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 14, 2003

Honorable Sonny Perdue, Governor Members ofthe General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Decatur Board of Education
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING 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, 2002, and have issued our report thereon dated March 14, 2003. 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 of Decatur Board of Education'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
2002YB-41

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 a 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 ofDecatur 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-7731-02-0l.
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, we consider item FS-7731-02-01 to be a material weakness.
This report is intended solely for the information and use ofthe management, members ofthe Cityof Decatur Board ofEducation, Federal awarding agencies and pass-through entities and is not intended
:<4l to be and should not be used by anyone other than these specified parties. Respectfully submitted,
~- ~&:__
Rus ell W. Hinton Stat Auditor
RWH:gp 2002YB-41

W. RussELL

HINTON

STATE AUDITOR

(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 14, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members ofthe State Board of Education
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 1N ACCORDANCE WITH 0MB CIRCULAR A-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 (0MB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2002. City ofDecatur Board ofEducation's major Federal programs are identified in the Summary of Auditor's Results Section ofthe accompanying Schedule ofFindings and 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 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 of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and 0MB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB 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.
2002SA-10

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, 2002.
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 0MB 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 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.
-- f.b,<l,J;._ espectfully submitted,
RWH:gp 2002SA-10

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 FINDJNGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2002

PRIOR YEAR FINANCIAL STATEMENT FINDJNGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-7731-00-04 FS-7731-01-01

Further Action Not Warranted Unresolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7731-01-01

On this finding we concur.

SECTION IV FINDINGS AND QUESTIONED COSTS

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2002
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 financial 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 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 IO(a) of 0MB Circular A-133 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 Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program I0.555 Food and Nutrition Program - Food Services - National School Lunch Program 84.027 Individuals with Disabilities Education Act - Part B - Special Education Flow Through 84.173 Individuals with Disabilities Education Act - Part B - Special Education Preschool 84.173 Individuals with Disabilities Education Act - Part B - Special Education Capacity Building Improvement
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
- 1-

CITY OF DECATUR BOARD OF EDUCATION - DEKALB COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 2002
I SUMMARY OF AUDITOR'S RESULTS 9. Low Risk Auditee
The City ofDecatur Board ofEducation qualified as a low risk auditee as defined by Section .530 of 0MB Circular A-133. II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-7731-02-01 The City of Decatur Board of Education failed to 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 should be maintained ofall additions and deletions to the General Fixed Assets Account Group. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.
-2-