City of Dublin Board of Education, Laurens County, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2007

CITY OF DUBLIN BOARD OF EDUCATION
LAURENS COUNTY, GEORGIA REPORT ON AUDIT
OF THE FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2007
STATE OF GEORGIA
DEPARTMENT OF AUDITS AND ACCOUNTS
Russell W. Hinton State Auditor

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXHIBITS

BASIC FINANCIAL STATEMENTS

DISTRICT-WIDE FINANCIAL STATEMENTS

A

STATEMENT OF NET ASSETS

1

B

STATEMENT OF ACTIVITIES

2

FUND FINANCIAL STATEMENTS

C

BALANCE SHEET

GOVERNMENTAL FUNDS

4

D

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET ASSETS

5

E

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES

GOVERNMENTAL FUNDS

6

F

RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT

OF REVENUES, EXPENDITURES AND CHANGES IN FUND

BALANCES TO THE STATEMENT OF ACTIVITIES

7

G

STATEMENT OF FIDUCIARY NET ASSETS

FIDUCIARY FUNDS

8

H

NOTES TO THE BASIC FINANCIAL STATEMENTS

9

SCHEDULES

REQUIRED SUPPLEMENTARY INFORMATION

1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES - BUDGET AND ACTUAL

GENERALFUND

25

SUPPLEMENTARY INFORMATION

2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

26

3 SCHEDULE OF STATE REVENUE

28

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

SCHEDULES

SUPPLEMENTARY INFORMATION

4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

29

5 ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

BY PROGRAM

31

SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENTAUDITING STANDARDS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133

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

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

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY - TABLE OF CONTENTS -
SECTIONV MANAGEMENT'S RESPONSES SCHEDULE OF MANAGEMENT'S RESPONSES

SECTION I FINANCIAL

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
September 16, 2008

Honorable Sonny Perdue, Governor Members ofthe General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Dublin Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying financial statements ofthe governmental activities, each major fund, and the aggregate remaining fund information (Exhibits A through H) of the City of Dublin Board of Education, as of and for the year ended June 30, 2007, which collectively comprise the Board's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City of Dublin Board ofEducation's management. Our responsibility is to express opinions on these 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 of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City of Dublin Board of Education's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Dublin Board ofEducation, as of June 30, 2007, and the
2007ARL-11

respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.
The City of Dublin Board of Education has not presented Management's Discussion and Analysis that accounting principles generally accepted in the United States of America has determined is necessary to supplement, although not to be part of, the basic financial statements.
In accordance with Government Auditing Standards, we have also issued our report dated September 16, 2008, on our consideration ofthe City ofDublin Board ofEducation's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results ofthat testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part ofan audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.
The Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on page 25, is not a required part of the basic financial statements but is supplementary information required by the accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods ofmeasurement and presentation ofthe required supplementary information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Dublin Board of Education's basic financial statements. The accompanying supplementary information which consist of Schedules 2 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 ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements, and in our opinion, is fairly stated, in all material respects, in relation to the basic 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,
w..Jd~
Rus ell W. Hinton, CPA, CGFM State Auditor
RWH:gp 2007ARL-11

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY STATEMENT OF NET ASSETS JUNE 30, 2007

EXHIBIT"A"

ASSETS
Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Other Inventories Capital Assets Land Construction in Progress Land Improvements Buildings Equipment Less: Accumulated Depreciation
Total Assets
LIABILITIES
Accounts Payable Salaries and Benefits Payable Contracts Payable Retainages Payable Long-Term Liabilities
Due Within One Year Due in More Than One Year
Total Liabilities
NET ASSETS
Invested in Capital Assets, Net of Related Debt Restricted for
Continuation of Federal Programs Debt Service Capital Projects Unrestricted
Total Net Assets
Total Liabilities and Net Assets

GOVERNMENTAL ACTIVITIES

$

1,028,685

7,476,428

908,899 1,829,418
299,029 48,051 74,188

1,600,732 943,595
1,080,634 26,350,101
1,375,617 -8,683,657

$ ===3=4,=33=1=,7=20..,

$

826,646

2,510,241

126,877

5,000

1,472,357 258 478

$

5,199,599

$

22,667,022

384,903 58,984
5,893,731 127 481

$

29,132,121

$ ===3=4=,3=3-1,,..72=0=

The notes to the basic financial statements are an integral part of this statement. -1-

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2007

GOVERNMENTAL ACTIVITIES
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 Operations of Non-Instructional Services Enterprise Operations Community Services Food Services Interest on Short-Term and Long-Term Debt
Total Governmental Activities
General Revenues Taxes Property Taxes For Maintenance and Operations Sales Taxes Special Purpose Local Option Sales Tax For Capital Projects Intangible Recording Tax Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous
Total General Revenues
Change in Net Assets
Net Assets - Beginning of Year
Net Assets - End of Year

EXPENSES

CHARGES FOR SERVICES

$

18,243,643 $

1,702,760 1,053,864
392,764 544,436 1,715,303 243,899 2,329,246 883,905 364,234 109,117

41,585 2,290
1,455,387 87 124

$

29,169,557 $

26,332 664,755
21,751 75
46,598 2,566
136,579 898 656

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

EXHIBIT"B"

PROGRAM REVENUES

OPERATING

CAPITAL

GRANTS AND

GRANTS AND

CONTRIBUTIONS CONTRIBUTIONS

NET (EXPENSES) REVENUES
AND CHANGES IN NET ASSETS

$

14,403,919

403,367 218,124 298,687 482,886 754,369
3,870 713,156 202,948 $

2,187

1,275,351

$

18,758,864 $

$ 167,869 167 869 $

-3,813,392
-634,638 -835,740
-94,077 -61,550 -939,183 -240,029 -1,616,015 -513,088 -364,234 -106,930
5,013 276
-43,457 -87 124
-9,344,168

$

7,536,758

2,836,611 40,844
1,001,614 508,586 344 356

$

12,268,769

$

2,924,601

26,207,520

$ =====29='=13=2.!aa1, =2=1

-3-

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30, 2007

EXHIBIT"C"

ASSETS
Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Other Inventories

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTAL

$

571,717 $ 1,717,492

$

1,057,310

5,099,610 $ 1,319,508

223,321 1,829,418
299,029 48,051 74188

493,506

2,289,209 7,476,428
716,827 1,829,418
299,029 48,051 74188

Total Assets

$ 4,103,034 $ 7,310,608 $ 1,319,508 $ ===1=2=!=7,=3=3'=15=0=

LIABILITIES AND FUND BALANCES
LIABILITIES
Cash Overdraft Accounts Payable Salaries and Benefits Payable Contracts Payable Retainages Payable
Total Liabilities
FUND BALANCES
Reserved for: Continuation of Federal Programs Debt Service Inventories Capital Projects
Unreserved Designated for Student Activities Undesignated Reported in: General Fund
Total Fund Balances

$

826,646

2,510,241

$

$ 3,336,887 $

$
126,877 5 000
131 877 $

$

310,715

$

74,188

$ 7,178,731

324,072

57172

$

766147 $ 7 178 731 $

1,260,524 $ 1,260.524 $
$ 58,984
58 984 $

1,260,524 826,646
2,510,241 126,877 5 000
4,729,288
310,715 58,984 74,188 7,178,731
324,072
57172
8,003,862

Total Liabilities and Fund Balances

$ 4,103,034 $ 7,310,608 $ 1,319.508 $ ===12....7=3=3,,,,.15=0=

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

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS JUNE 30, 2007

EXHIBIT"D"

Total Fund Balances - Governmental Funds (Exhibit "C")
Amounts reported for Governmental Activities in the Statement of Net Assets are different because:
Capital Assets used in Governmental Activities are not financial resources and therefore are not reported in the funds. These assets consist of:
Land Construction in Progress Land Improvements Buildings Equipment Accumulated Depreciation
Total Capital Assets
Some of the School District's property tax revenues will be collected after year-end but are not available soon enough to pay for the current period's expenditures.
Long-Term Liabilities, including Bonds Payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. Long-Term Liabilities at year-end consist of:
Bonds Payable Capital Leases
Total Long-Term Liabilities

$

8,003,862

$

1,600,732

943,595

1,080,634

26,350,101

1,375,617

-8,683,657

22,667,022

192,072

$ -1,285,000 -445 835

-1,730,835

Net Assets of Governmental Activities (Exhibit "A")

$ 29,132,121

The notes to the basic financial statements are an integral part of this statement. -5-

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2007

EXHIBIT"E"

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
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 Enterprise Operations Community Services Food Services Operation
Capital Outlay Debt Services
Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Capital Leases Transfers In Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTAL

$ 7,598,011

40,844 $ 2,836,611

15,798,045

4,130,302

898,656

116,199

350,146 $

487130

$ 29,069,187 $ 3,186,757 $

$
42,241 42 241 $

7,598,011 2,877,455 15,798,045 4,130,302
898,656 508,586 487130
32,298,185

$ 17,838,352

$

1,702,760 1,060,127
392,764 536,221 1,715,303 243,889 $ 2,322,837 1,029,936 364,234 109,117 41,585
2,290 1,439,694
34,526

10 3,643,790

112,967 19,008

46,803 $ 1,235,000

15,953

52,163

$ 28,965,610 $ 3,706,556 $ 1,287,163 $

$

103,577 $ -519,799 $ -1,244,922 $

17,838,352
1,702,760 1,060,127
392,764 536,221 1,715,303 243,899 2,322,837 1,029,936 364,234 109,117 41,585
2,290 1,439,694 3,678,316
1,394,770 87124
33,959,329
-1,661,144

$

26,886

$

26,886

$ 1,277,757

1,277,757

$ -1,277,757

-1,277,757

$

26,886 $ -1,277,757 $ 1,277,757 $

26,886

$

130,463 $ -1,797,556 $

32,835 $ -1,634,258

635,684

8,976,287

26,149

9,638,120

Fund Balances - Ending

$

766147 $ 7,178,731 $

58,984 $ =:=i8,,;;,;00~3.,8~62=

The notes to the basic financial statements are an integral part of this statement. -6-

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2007

EXHIBIT "F"

Total Net Change in Fund Balances - Governmental Funds (Exhibit "E")

$ -1,634,258

Amounts reported for Governmental Activities in the Statement of Activities are different because:

Capital Outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activities, the cost of Capital Assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are:

Capital Outlay Depreciation Expense
Excess of Capital Outlay over Depreciation Expense

$ 3,938,602 -543,600

3,395,002

Because some property taxes will not be collected for several months after the School District's fiscal year ends, they are not considered "available" revenues.

-61,253

In the Statement of Activities, only the loss on the sale of land and equipment is reported, whereas in the Governmental Funds, the entire proceeds from the sale increase financial resources. Thus, the change in net assets differs from the change in fund balances by the cost of the land and carrying value of the equipment sold.

-142,774

Some of the Capital Assets acquired this year were financed with capital leases. In Governmental Funds, a capital lease arrangement is considered a source of financing, but in the Statement of Net Assets, the lease obligation is reported as a Long-Term Liability.

-26,886

Repayment of Long-Term Debt is reported as an expenditure in Governmental

Funds, but the repayment reduces Long-Term Liabilities in the Statement of

Net Assets. In the current year, these amounts consist of:

-;-

Bond Principal Retirements Capital Lease Payments
Total Long-Term Debt Repayments

$ 1,235,000 159 770

1394770

Change in Net Assets of Governmental Activities (Exhibit "B")

$ ======2,=92=4=,6=0=1

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

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30, 2007

EXHIBIT"G"

ASSETS Cash and Cash Equivalents
LIABILITIES Funds Held for Others

AGENCY FUNDS
$ ===4=9'=00=5=
$==4=9==,0=05=

The notes to the basic financial statements are an integral part of this statement.
-8-

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY EXHIBIT "H" NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2007
Note 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY
REPORTING ENTITY
The City ofDublin 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 Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity.
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The School District's basic financial statements are collectively comprised of the District-wide financial statements, fund financial statements and notes to the basic financial statements ofthe City of Dublin Board of Education.
District-wide Statements: The Statement ofNet Assets and the Statement ofActivities display information about the financial activities ofthe overall School District, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions.
The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities.
Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the School District related to the administration and support ofthe School District's programs, such as office and maintenance personnel and accounting) are not allocated to programs.
Program revenues include (a) charges paid by the recipients ofgoods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
Fund Financial Statements: The fund financial statements provide information about the School District's funds, including fiduciary funds. Eliminations have been made to minimize the double counting ofinternal activities. Separate statements for each category (governmental and fiduciary) are presented. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column.
-9-

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY EXHIBIT "H" NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2007
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The School District reports the following major governmental funds:
General Fund is the School District's primary operating fund. It accounts for all financial resources ofthe School District, except those resources required to be accounted for in another fund.
District-wide Capital Projects Fund accounts for financial resources including Special Purpose Local Option Sales Tax (SPLOST) and Bond Proceeds to be used for the acquisition, construction or renovation of major capital facilities.
Debt Service Fund accounts for taxes (sales) legally restricted for the payment ofgeneral longterm principal, interest and paying agent's fees.
The School District reports the following fiduciary fund type:
Agency funds account for assets held by the School District as an agent for various funds, governments or individuals.
BASIS OF ACCOUNTING
The basis ofaccounting determines when transactions are reported on the financial statements. The District-wide governmental and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless ofwhen the related cash flows take place. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, sales taxes, grants and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year in which the underlying transaction (sale) takes place. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
The School District uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts.
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis ofaccounting. Under this method, revenues are recognized when measurable and available. The School District considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, which are recognized
- 10 -

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY EXHIBIT "H" NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2007
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds ofgeneral long-term liabilities and acquisitions under capital leases are reported as other financing sources.
The School District funds certain programs by a combination ofspecific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the School District's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues.
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. Official Code of Georgia Annotated Section 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:
(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,
- 11 -

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY EXHIBIT "H" NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2007

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(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.

The School District does not have a formal policy regarding investment policies that address credit risks, custodial credit risks, concentration ofcredit risks, interest rate risks or foreign currency risks.

RECEIVABLES

Receivables consist of amounts due from property and sales taxes, grant 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 basic financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

PROPERTY TAXES

The City ofDublin Board of Commissioners fixed the property tax levy for the 2006 tax digest year (calendar year) on October 5, 2006 (levy date). Taxes were due on December 28, 2006 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2006 tax digest are reported as revenue in the governmental funds for fiscal year 2007. The Dublin City Clerk bills and collects the property taxes for the School District, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance oftaxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2007, for maintenance and operations amounted to $7,598,011.

The tax millage rate levied for the 2006 tax year (calendar year) for the City of Dublin Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

16.277 mills

SALES TAXES

Special Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $2,836,611 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.

- 12 -

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY EXHIBIT "H" NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2007
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVENTORIES
FOOD INVENTORIES On the basic financial statements, inventories of donated food commodities used in the preparation ofmeals are reported at their Federally assigned value and purchased foods inventories are reported at cost (first-in, first-out). The School District uses the consumption method to account for inventories whereby donated food commodities are recorded as an asset and as revenue when received, and expenses/expenditures are recorded as the inventory items are used. Purchased foods are recorded as an asset when purchased and expenses/expenditures are recorded as the inventory items are used.
CAPITAL ASSETS
Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund financial statements at the time of purchase (including ancillary charges). On the District-wide financial statements, all purchased capital assets are valued at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at estimated fair market value on the date donated. Disposals are deleted at depreciated recorded cost. The cost of normal maintenance and repairs that do not add to the value of assets or materially extend the useful lives of the assets is not capitalized. Depreciation is computed using the straight-line method. The School District does not capitalize book collections or works ofart. During the fiscal year under review, no events or changes in circumstances affecting a capital asset that may indicate impairment were known to the School District.
During 1994, the School District became a separate legal entity and the City of Dublin deeded all land and buildings in use by the School District to the School District. A stipulation in the agreement was made that ifthe property was no longer needed for educational purposes, the property would revert to the City of Dublin. Currently, all property transferred to the School District's possession at that time is being used for educational purposes, therefore these capital assets are considered to be the property of the City of Dublin Board of Education and will be reported on the School District's basic financial statements.
Capitalization thresholds and estimated useful lives of capital assets reported in the District-wide statements are as follows:
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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY EXHIBIT "H" NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2007

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Capitalization Policy

Estimated Useful Life

Land Improvements Other than Buildings Buildings and Improvements Equipment Construction in Progress

All

NIA

$

5,000

20 years

$

5,000

50 years

$

5,000 5 to 25 years

$

5,000

NIA

Depreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives.

GENERAL OBLIGATION BONDS

The School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond issuance costs are recognized in the financial statements during the fiscal year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the Statement of Net Assets.

NET ASSETS

The School District's net assets in the District-wide Statements are classified as follows:

Invested in capital assets, net of related debt - This represents the School District's total investment in capital assets, net ofoutstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt.

Restricted net assets - These represent resources for which the School District is legally or contractually obligated to spend resources for continuation of Federal programs, debt service and capital projects in accordance with restrictions imposed by external third parties.

Unrestricted net assets - Unrestricted net assets represent resources derived from property taxes, sales taxes, grants and contributions not restricted to specific programs, charges for services, and miscellaneous revenues. These resources are used for transactions relating to the educational and general operations of the School District, and may be used at the discretion of the Board to meet current expenses for those purposes.

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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY EXHIBIT "H" NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2007
Note 3: 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 of money which has not been secured by surety bond, by guarantee of insurance, 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.
Acceptable security for deposits consists of any one 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 of the State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS At June 30, 2007, the bank balances were $1,421,270. The amounts of the total uninsured bank balances are classified into three categories of custodial credit risk:
Category 1 - Uncollateralized, Category 2 - Cash collateralized with securities held by the pledging financial institution, or
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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY EXHIBIT "H" NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2007

Note 3: DEPOSITS AND INVESTMENTS

Category 3 - Cash collateralized with securities held by the pledging financial institution's trust department or agent but not in the School District's name.

The School District's uninsured deposits are classified by custodial credit risk category at June 30, 2007, as follows:

Custodial Credit Risk Category

Bank Balance

1

$

0

2

1,130,643

3

0

Total

$ 1,130,643

CATEGORIZATION OF INVESTMENTS At June 30, 2007, the carrying value ofthe School District's total investments was $7,476,428, which is materially the same as fair value. This investment consisted entirely offunds invested in the Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services which are not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy ofthe State ofGeorgia, Office ofTreasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. Additional information on the Local Government Investment Pool is disclosed in the State of Georgia Comprehensive Annual Financial Report. This audit can be obtained from the Georgia Department ofAudits and Accounts at http://www.audits.state.ga.us/internet/searchRpts.html.

The Primary Liquidity Portfolio consists ofGeorgia Fund 1 which is not registered with the SEC as an investment company but does operate in a manner consistent with the SEC's Rule 2a-7 of the Investment Company Act of 1940. The investment is valued at the pool's share price, $1.00 per share. The pool is an AAAm rated investment pool by Standard and Poor's. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2007, was 15 days.

Note 4: 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 2 - Inventories

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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY EXHIBIT "H" NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2007

Note 5: CAPITAL ASSETS

The following is a summary of changes in the Capital Assets during the fiscal year:

Balances July 1. 2006

Increases

Balances Decreases June 30. 2007

Governmental Activities Capital Assets, Not Being Depreciated:
Land Construction in Progress

$ 1,121,060 $ 1.344,266

500,000 $

20,328 $ 1,600,732

943,595

1,344,266

943,595

Total Capital Assets Not Being Depreciated $ 2,465,326 $ 1.443,595 $ 1,364,594 $ 2,544.327

Capital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements

$ 24,123,380 $ 1,075,234 1,057,660

3,445,785 $ 360,998 32,490

1,219,064 $ 26,350,101

60,615

1,375,617

9,516

1,080,634

Less Accumulated Depreciation for: Buildings and Improvements Equipment Land Improvements

7,740,321 712,574 853,911

472,647 54,678 16,275

1,097,158 60,075 9 516

7,115,810 707,177 860,670

Total Capital Assets, Being Depreciated, Net $ 16.949,468 $ 3,295,673 $ 122,446 $ 20,122,695

Governmental Activity Capital Assets - Net $ 19,414.794 $ 4.739.268 $ 1,487.040 $ 22,667.022

Current year depreciation expense by function is as follows:

Instruction Support Services
General Administration Maintenance and Operation of Plant Student Transportation Services Food Services

$ 479,440

$

9,482

7,397

29,169

46,048 18,112

Note 6: RESTRICTED ASSETS

$==5=='43"""',6""'0"=0

Special Purpose Local Option Sales Tax (SPLOST) and general obligation bond proceeds are restricted assets in the Statement of Net Assets because their use is limited by applicable bond covenants or statutory provisions. Restricted assets at June 30, 2007, were as follows:

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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY EXHIBIT "H" NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2007

Note 6: RESTRICTED ASSETS

District-wide Capital Projects

Bond

SPLOST

Proceeds

Debt Service Funds

Restricted Cash and Cash Equivalents: Capital Acquisitions
Restricted Investments: Debt Services Capital Acquisitions

$ 1,717,492
$ 1,319,508 $ 3,814,610 $ 1,285,000

Note 7: INTERFUND TRANSFERS

Interfund transfers for the year ended June 30, 2007, consisted of the following:

Transfer to

Transfers From District-wide
Capital Projects

Debt Service Fund

$ 1,277,757

Transfers are used to move Special Purpose Local Option Sales Tax revenue from the District-wide Capital Projects Fund to the Debt Service Fund to service bond debt.

Note 8: 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 has obtained commercial insurance for risk ofloss associated with automobiles. The School District has neither significantly reduced coverage for this risk nor incurred losses (settlements) which exceeded the School District's insurance coverage in any ofthe past three years.

The School District participates in the Georgia School Boards Association Risk and Insurance Management System, a public entity risk pool organized on July 1, 1994, to develop and administer a plan to reduce risk of loss on account of general liability or property damage, including safety engineering and other loss prevention and control techniques, and to administer one or more groups ofself-insurance funds, including the processing and defense of claims brought against members of the 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

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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY EXHIBIT "H" NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2007

Note 8: RISK MANAGEMENT

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), errors and omissions and crime. 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 same fund that the employee's salary and benefits were paid. Claims are accounted for with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated.

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

2006 2007

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

$

0 $

1 550 $

1 550 $

0

$

0 $

8 894 $

8 894 $

0

The School District participates in the Georgia Education Workers' Compensation Trust, a public entity risk pool organized on December 1, 1991, to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The School District pays an annual premium to the Trust for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Trust with the Midwest Employers Casualty Company to provide coverage for potential losses sustained by the Trust in excess of $500,000 loss per occurrence, up to $2,000,000.

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

Position Covered

Amount

Superintendent All Employees

$

20,000

$ 300,000

Note 9: SHORT-TERM DEBT

The School District obtains temporary loans in advance of property tax collections, depositing the proceeds in its General Fund. This short-term debt is to provide cash for operations until property tax collections are received by the School District. Article IX, Section V, Paragraph V of the Constitution ofthe State of Georgia limits the aggregate amount ofshort-term debt to 75 percent of the total gross income from taxes collected in the preceding year and requires all short-term debt to be repaid no later than December 31 of the calendar year in which the debt was incurred.

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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY EXHIBIT "H" NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2007

Note 9: SHORT-TERM DEBT

Short-term debt activity for the fiscal year is as follows:

Beginning Balance

Issued

Redeemed

Ending Balance

Temporary Loans

$=====0 $ 1,500,000 $ 1,500,000 $==~0

Note 10: LONG-TERM DEBT

CAPITAL LEASES The City of Dublin Board of Education has entered into various lease agreements for equipment. These lease agreements qualify as capital leases for accounting purposes, and, therefore, have been recorded at the present value ofthe future minimum lease payments as ofthe date oftheir inception.

GENERAL OBLIGATION DEBT OUTSTANDING General Obligation Bonds currently outstanding are as follows:

Purpose

Interest Rate

Amount

General Government - Series 2004

2.07%

$ 1,285,000

Voters have authorized $10,100,000 in general obligation debt for various construction projects which was not issued as of June 30, 2007.

The changes in Long-Term Debt during the fiscal year ended June 30, 2007, were as follows:

Governmental Funds

General

Capital

Obligation

Leases

Bonds

Total

Balance July I, 2006

$ 578,719 $ 2,520,000 $ 3,098,719

Additions Capital Leases

26,886

26,886

Deductions Debt Retired

159 770

1,235,000

1,394,770

Balance June 30, 2007

$ 445,835 $ 1,285,000 $ 1,730,835

Portion of Long-Term Debt Due within One Year

$ 187,357 $ 1,285,000 $ 1,472,357

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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY EXHIBIT "H" NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2007

Note 10: LONG-TERM DEBT

At June 30, 2007, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30

Capital Leases

Principal

Interest

2008 2009 2010 2011 2012

$ 187,357 $ 87,609 54,196 56,911 59,762

25,575 13,802 8,561 5,845 2,994

Total Principal and Interest

$ 445,835 $

56,777

Fiscal Year Ended June 30

General Obligation

Debt

Principal

Interest

2008

$ 1,285,00Q ., $

26,600

Note 11: ON-BEHALF PAYMENTS

The School District has recognized revenues and costs in the amount of $405,753 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies.

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $391,262

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $12,108

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$2,383

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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY EXHIBIT "H" NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2007

Note 12: SIGNIFICANT COMMITMENTS

The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2007:

Project

Unearned Executed Contracts

Susie Dasher Elementary Renovations

$====2-,0===7==1

The amount described in this note is not reflected in the basic financial statements.

Note 13: SIGNIFICANT 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 costs which are disallowed under grant terms. The School District believes that such disallowances, if any, will be immaterial to its overall financial position.

The School District is a defendant in various legal proceedings pertaining to matters incidental to the performance ofroutine School District operations. The ultimate disposition ofthese proceedings is not presently determinable, but is not believed to be material to the basic financial statements.

Note 14: SUBSEQUENT EVENTS

In the subsequent fiscal year, the School District issued general obligation bonds in the amount of $4,000,000 on December 19, 2007, and $6,100,000 on January 28, 2008. In addition, the School District signed a construction contract with Dublin Construction Company to build a new high school for $28,902,613.

Note 15: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System 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.

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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY EXHIBIT "H" NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2007

Note 15: RETIREMENT PLANS

TRS CONTRIBUTIONS REQUIRED AND 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 9.28% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2007 2006 2005

100% 100% 100%

$ 1,478,389 $ 1,457,355 $ 1,374,281

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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL
YEAR ENDED JUNE 30, 2007

SCHEDULE "1"

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
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 Enterprise Operations Community Services Food Services Operation
Capital Outlay Debt Service
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Other Sources Other Uses
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning
Inventory - Net Change in Period

NONAPPROPRIATED BUDGETS

ORIGINAL (1)

FINAL(1)

ACTUAL AMOUNTS

$

7,347,041 $

7,347,041 $

7,598,011

40,844

15,102,739

15,213,612

15,798,045

4,292,338

4,292,338

4,130,302

146,130

146,130

898,656

32,500

32,500

116,199

203 000

203 000

487 130

$

27 123 748 $

27,234,621 $

29,069,187

$

17,399,630 $

17,632,249 $

17,838,352

1,088,918 1,200,572
416,803 486,489 1,721,475 263,575 2,042,041 1,004,239 249,020 112,864
1,480,641 30,000

1,141,278 1,081,343
416,803 526,343 1,643,921 263,574 2,042,041 998,039 249,020 121,500
1,480,641 30,000

1,702,760 1,060,127
392,764 536,221 1,715,303 243,889 2,322,837 1,029,936 364,234 109,117
41,585 2,290
1,439,694 34,526
131 975

$

27,496,267 $

27,626,752 $

28,965,610

$

-372 519 $

-392 131 $

103 577

$

26,886

$

-62 756 $

-62 756

$

-62 756 $

-62 756 $

26886

$

-435,275 $

-454,887 $

130,463

736,909

736,909

635,684

46 020

46 020

Fund Balances - Ending

$

347 654 $

328,042 $

766147

Notes to the Schedule of Revenues, Ex12enditures and Changes in Fund Balances Budget and Actual
(1) Original and Final Budget amounts do not include budgeted revenues or expenditures of the various principal accounts.
The accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements.

See notes to the basic financial statements.

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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2007

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program
Total Child Nutrition Cluster
Other Programs Pass-Through From Georgia Department of Education Food Donation (1)
Total U.S. Department of Agriculture
Education, U.S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Special Education Grants to States Preschool Grants
Total Special Education Cluster
Other Programs Pass-Through From Georgia Department of Education Comprehensive School Reform Demonstration Enhancing Education Through Technology Program Improving Teacher Quality State Grants Rural Education State Grants for Innovative Programs Title I Grants to Local Educational Agencies Vocational Education - Basic Grants to States
Total U. S. Department of.Education
Defense, U. S. Department of Direct Department of the Marines R.O.T.C. Program
Total Federal Financial Assistance
N/A = Not Available

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

EXPENDITURES IN PERIOD

* 10.553 * 10.555

NIA

N/A

$

$

(2) 1,290,595
1,290,595

10.550

N/A $

70 010 1,360,605

84.027 84.173

N/A $ N/A
$

546,500 20400
566,900

84.332 84.318 84.367 84.358 84.298 * 84.010 84.048

N/A N/A N/A N/A
N/A
N/A N/A
$

50,000 168,906 261,626 90,110
6,961 1,718,988
55,206
2,918,697

$

111 931

$ =====4,=39=1='=,2=3=3

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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2007

SCHEDULE "2"

Notes to the Schedule of Expenditures of Federal Awards
(1) The amount shown for the Food Donation Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the School District during the current fiscal year.
(2) Expenditures for the funds earned on the School Breakfast Program ($331,414) were not maintained separately and are included in the 2007 National School Lunch Program.
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 Dublin 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 fund financial statements.

See notes to the basic financial statements.

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CITY OF DUBLIN BOARD OF EDUCATION- LAURENS COUNTY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2007

AGENCY/FUNDING
GRANTS Bright From the Start: Georgia Department of Early Care and Learning Pre-Kindergarten Program
Education, Georgia Department of Quality Basic Education Direct Instructional Cost 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 School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program 20 Days Additional Instruction Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Categorical Grants Pupil Transportation Regular Bus Replacement Sparsity Nursing Services Principal Supplements Vocational Supervisors Mid-term Adjustment Hold-Harmless Education Equalization Funding Grant Food Services Vocational Education Amended Formula Adjustment Other State Programs 4-8 Statewide After School Program Academic Coach Comprehensive Academic Performance Health Insurance Middle School Remediation and Intervention Grant National Teacher Certification Preschool Handicapped Program Pupil Transportation - State Bonds Teachers' Retirement
Office of Treasury and Fiscal Services Public School Employees Retirement

See notes to the basic financial statements.

- 28-

SCHEDULE "3"

GOVERNMENTAL FUND TYPE GENERAL FUND

$

804,711

1,007,551 279,476
2,051,420 134,072 907,734 42,897
1,665,180 1,587,300
507,431
1,856,916 278,417 19,067 139,670 -1,253 290,645 92,051 52,252
455,747 662,163 697,351
175,274 17,869 20,000 64,823 9,164 18,859
335,998 999,700
77,712 60,279 -276,045
43,445 32,198 40,075 391,262
1,913 10,063 80,167 150,000 12,108
2 383
$ =====15==,7=9=8,..,0=45=

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2007

SCHEDULE "4"

PROJECT
Acquiring, constructing, and equipping renovations and improvements to the Dublin Junior High School Auditorium, including partial demolition of Dublin Junior High School, renovations and additions at Dublin High School, the purchase of school buses, the installation of computer cabling on a system-wide basis and technology upgrades, the acquisition of certain property and equipment, including any heating and air conditioning equipment, which may be subject to lease by the Dublin School District, and additions, renovations, and improvements to Central Elementary School, Susie Dasher Elementary School, Saxon Heights Elementary School, Hillcrest Elementary School, Moore Street Elementary School, and Dublin Middle School.

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS (3)

PROJECT STATUS

$ 14,850,000 $ 14,850,000 $ 3?58,719 $

3,368,373 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 Laurens 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 basic financial statements.

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CITY OF DUBLIN BOARD OF EDUCATION- LAURENS COUNTY GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2007

SCHEDULE "5"

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 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) (2)

ELIGIBLE QBE PROGRAM COSTS

SALARIES OPERATIONS

TOTAL

$

1,147,167 $ 1,365,934 $

12,487 $

1,378,421

316,321

130,985

1,046

132,031

2,365,397

2,537,936

31,691

2,569,627

151,834

133,356

3,566

136,922

1,052,292

1,317,806

10,859

1,328,665

50,487 1,939,930 1,828,356
598,026 2,201,177
331,543 30,841
161,993

56,676 2,139,124 2,357,204
540,909
52 258,956 1,538,063 191,989 257,130 271,889
75,908 114,688
4 010

28,887 96,475 45,057
1,306 2,533 16,064
315 1,088 4,441
526 962 810

56,676 2,168,011 2,453,679
585,966
1,358 261,489 1,554,127 192,304 258,218 276,330
76,434 115,650
4 820

$

12,175,364 $ 13,292,615 $

258,113 $

13,550,728

336,954 61 047

408,527 8 394

26,244 43 760

434,771 52154

TOTALQBEFORMULAFUNDS

$

12,573,365 $ 13,709,536 $

328, 117 $ ====1=4,.0.3..,.7,..,6.,.5..,3

(1) Comprised of State Funds plus Local Five Mill Share. (2) Allotments do not include the impact of the State amended formula adjustment.

See notes to the basic financial statements.

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SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
September 16, 2008

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Dublin Board of Education
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of City of Dublin Board of Education as of and for the year ended June 30, 2007, which collectively comprise City of Dublin Board of Education's basic financial statements and have issued our report thereon dated September 16, 2008. 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 AuditingStandards, issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered City of Dublin Board of Education's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose ofexpressing an opinion on the effectiveness of the City of Dublin Board of Education's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City of Dublin Board of Education's internal control over financial reporting.
Our consideration ofinternal control over financial reporting was for the limited purpose described in the preceding paragraph and would not necessarily identify all deficiencies in internal control over financial reporting that might be significant deficiencies or material weaknesses. However, as discussed below, we identified certain deficiencies in internal control over financial reporting that we consider to be significant deficiencies.
2007YB-60

A control deficiency exists when the design or operation ofa control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affect the City ofDublin Board of Education's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement ofthe City of Dublin Board of Education's financial statements that is more than inconsequential will not be prevented or detected by the City ofDublin Board ofEducation's internal control. We consider items FS-7741-07-01 and FS-7741-07-02 in the accompanying Schedule ofFindings and Questioned Costs to be significant deficiencies in internal control over financial reporting.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement ofthe financial statements will not be prevented or detected by the City of Dublin Board of Education's internal control.
Our consideration of the internal control over financial reporting was for the limited purpose described in the first paragraph ofthis section and would not necessarily disclose all deficiencies in internal control that might be significant deficiencies and, accordingly, would not necessarily disclose all significant deficiencies that are also considered to be material weaknesses. However, of the significant deficiencies described above, we consider all items to be material weaknesses.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether City of Dublin Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and which are described in the accompanying Schedule of Findings and Questioned Costs as item FS-7741-07-03.
We also noted certain matters that we have reported to management of City of Dublin Board of Education in a separate letter dated September 16, 2008.
City of Dublin Board of Education's response to the findings identified in our audit is described in the accompanying Schedule ofManagement's Responses. We did not audit City ofDublin Board of Education's response and, accordingly, we express no opinion on it.
2007YB-60

This report is intended solely for the information and use ofthe management, members ofthe City of Dublin 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.~~ Russell W. Hinton, CPA, CGFM State Auditor
RWH:gp 2007YB-60

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
September 16, 2008

Honorable Sonny Perdue, Governor Members ofthe General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Dublin Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance ofCity ofDublin 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, 2007. City of Dublin Board of Education's major Federal programs are identified in the Summary of Auditor's Results Section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of City of Dublin Board of Education's management. Our responsibility is to express an opinion on City of Dublin Board of Education's compliance based on our audit.
We conducted our audit of compliance 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 of the 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 Dublin Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the

2007SA-15

circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on City of Dublin Board of Education's compliance with those requirements.
In our opinion, the City of Dublin Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 2007. However, the results of our auditing procedures disclosed an instance of noncompliance with those requirements, which is described in the accompanying Schedule of Findings and Questioned Costs as item FA-7741-07-01.
Internal Control Over Compliance
The management of City of Dublin 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 ofDublin 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 ofexpressing our opinion on compliance, but not for the purpose of expressing an opinion on the effectiveness ofinternal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City of Dublin Board of Education's internal control over compliance.
A control deficiency in an entity's internal control over compliance exists when the design or operation ofa control does not allow management or employees, in the normal course ofperforming their assigned functions, to prevent or detect noncompliance with a type of compliance requirement of a Federal program on a timely basis. A significant deficiency is a control deficiency, or combination ofcontrol deficiencies, that adversely affects the entity's ability to administer a Federal program such that there is more than a remote likelihood that noncompliance with a type of compliance requirement of a Federal program that is more than inconsequential will not be prevented or detected by the entity's internal control.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that material noncompliance with a type of compliance requirement of a Federal program will not be prevented or detected by the entity's internal control.
Our consideration of the internal control over compliance was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above.
City of Dublin Board of Education's response to the findings identified in our audit is described in the accompanying Schedule ofManagement's Responses. We did not audit City ofDublin Board of Education's response and, accordingly, we express no opinion on it.
2007SA-15

This report is intended solely for the information and use ofthe management, members ofthe City of Dublin 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.

RWH:gp 2007SA-15

Respectfully submitted,
~n,*~!!~ State Auditor

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

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2007

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER

AUDITEE'S RESPONSE/STATUS

SEE AUDITOR'S COMMENTS

FS-7741-05-01 Further Action Not Warranted

FS-7741-05-02 Previously Reported Corrective Action Implemented

FS-7741-06-01 Previously Reported Corrective Action Implemented

FS-7741-06-02 Further Action Not Warranted

(1)

FS-7741-06-03 Partially Resolved - See Corrective Action/Responses

FS-7741-06-04 Previously Reported Corrective Action Implemented

FS-7741-06-05 Unresolved - See Corrective Action Responses

FS-7741-06-06 Previously Reported Corrective Action Implemented

CORRECTIVE ACTION/RESPONSES

CASH AND CASH EQUIVALENTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Internal Controls at the Central Office Finding Control Number: FS-7741-06-03

We have continued to work with CSI+ to resolve the issue of the bank statements not reconciling to the interfund cash account. Well into the fiscal year 2007 year this issue was identified and corrected. There are still some issues with the software regarding this issue.

EXPENDITURES/LIABILITIES/DISBURSEMENTS Improper Use of SPLOST Proceeds Finding Control Number: FS-7741-06-05

The Board feels that it was complying with the wishes of the citizens of Dublin, who specifically approved the stadium additions and renovations in the SPLOST starting January 1, 2008. In having to postpone the project for the new High School because of inflated costs, it was decided to proceed with the stadium project. Before proceeding with future projects the Board ofEducation will secure the legal opinion ofits attorney before proceeding with each project.

- 1-

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2007

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

AUDITOR'S COMMENTS

(1) Findings/internal control deficiencies ofthis nature, that are not deemed significant deficiencies or material weaknesses and do not require reporting in the audit report in accordance with Statements on Auditing Standards (SAS) 112 or Governmental Auditing Standards (Yellow Book), will be communicated in a management letter in subsequent periods.

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER

AUDITEE'S RESPONSE/STATUS

SEE AUDITOR'S COMMENTS

FA-7741-06-01 Previously Reported Corrective Action Implemented

FA-7741-06-02 Further Action Not Warranted

(1)

FA-7741-06-03 Unresolved- See Corrective Action Responses

CORRECTIVE ACTION/RESPONSES

SPECIAL TESTS AND PROVISIONS Federal Reimbursement Transfer Not Timely Finding Control Number: FA-7741-06-03

There continue to be times when cash flow problems make it unfeasible to transfer the funds in a timely manner.

AUDITOR'S COMMENTS

(1) Findings/internal control deficiencies of this nature, that are not deemed significant deficiencies or material weaknesses and do not require reporting in the audit report in accordance with Office of Management and Budget (0MB) Circular A-133, will be communicated in a management letter in subsequent periods.

-2-

SECTION IV FINDINGS AND QUESTIONED COSTS

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2007

I SUMMARY OF AUDITOR'S RESULTS

1. Type of Report Issued on the Financial Statements The auditor's opinion on the City of Dublin Board of Education's financial statements was unqualified.

2. Significant Deficiencies in Internal Control Disclosed by the Audit ofthe Financial Statements The audit report for the City of Dublin Board of Education disclosed financial statement significant deficiencies related to the following control categories.

Cash and Cash Equivalents Revenues/Recei vab les/Recei pts Financial Reporting

Expenditures/Liabilities/Disbursements General Ledger

All ofthe significant deficiencies described above are considered to be material weaknesses.

3. Noncompliance Material to the Financial Statements The audit ofthe City ofDublin Board ofEducation disclosed one instance ofnoncompliance deemed material to the financial statements. This noncompliance involved the Board's improper use of SPLOST Proceeds.

4. Significant Deficiencies in Internal Control Over Major Programs The audit report for the City ofDublin Board of Education did not disclose any significant deficiencies in internal control over major programs.

5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the City ofDublin Board ofEducation's report on compliance with requirements applicable to major programs was unqualified.

6. Audit Findings Required to be Reported by Section .5 lO(a) of 0MB Circular A-133 The City of Dublin Board of Education's audit did not disclose an audit finding required to be reported by section .5 lO(a) ofOMB Circular A-133, however, we noted a certain instance of noncompliance which is included in section IV of this report.

7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food Services - School Breakfast Program 10.555 Food Services - National School Lunch Program 84.010 Title I Grants to Local Educational Agencies

8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.

- 1-

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2007

I SUMMARY OF AUDITOR'S RESULTS

9. Low Risk Auditee The City of Dublin Board of Education did not qualify as a low risk auditee as defined by Section .530 of 0MB Circular A-133.

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINANCIAL REPORTING Inadequate Controls over Financial Reporting Material Weakness Finding Control Number: FS-7741-07-01

Condition:

The School District did not have adequate controls in place over the financial statement reporting process.

Criteria:

Management is responsible for having adequate controls over the financial reporting process, which not only includes proper recording oftransactions to the general ledger, but extends to accurate preparation and presentation ofthe financial statements, including note disclosures.

Questioned Cost: NIA

Information:

The Governmental Accounting Standards Board (GASB) Statement 34 reporting model requires the presentation ofboth fund level and entity-wide level statements in the School District's financial statements. During the audit, numerous correcting entries were proposed by the auditor and accepted by the client to properly present the entity's fund level and entity-wide level financial statements.

Cause:

The School District did not implement an adequate system ofinternal control over the financial statement reporting process.

Effect:

The School District did not have adequate controls in place to ensure that the financial statements were properly prepared in accordance with generally accepted accounting principles.

Recommendation:

The School District should develop and implement internal controls over the financial statement reporting process to ensure that activity is properly recorded in the general ledger; to verify that financial statements (including note disclosures) properly reflect activity reported in the general ledger; and to include a monitoring process to evaluate the accuracy of the financials presented for audit.

-2-

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2007

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS GENERAL LEDGER Inadequate Internal Controls at the Central Office Material Weakness Finding Control Number: FS-7741-07-02

Condition:

This is a repeat finding (FS-7741-06-03 and FS-7741-05-01) from the years ended June 30, 2006, and June 30, 2005. The accounting procedures ofthe School District were insufficient to provide for adequate internal controls at the Central Office.

Criteria:

The School District's management is responsible for designing and maintaining internal controls that provide reasonable assurance that transactions are processed according to established procedures.

Questioned Cost: NIA

Information:

Cash and Cash Equivalents The General Fund (Operating) bank account, Payroll bank account and School Food Services bank account were not reconciled to the cash amounts listed on the general ledger at June 30, 2007. The School District's general ledger reflected an overall balance in the Interfund Cash account of$65,203. This account should always carry an overall balance of zero.

Revenues/Receivables/Receipts When reconciling the revenue accounts the following items were noted: 2 property tax checks in the amount of $20,753 received in May 2007 (fiscal year 2007) were not deposited or recorded until July 2007 (fiscal year 2008). 1 property tax check in the amount of $26,638 that was received in July 2007 was shown as being deposited in June 2007.

Expenditures/Liabilities/Disbursements A review of 127 vouchers revealed the following: 12 voucher packages could not be located. 7 voucher packages were missing approved purchased orders. 1 voucher package included a purchase order that was approved after the invoice date.

-3-

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2007

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS GENERAL LEDGER Inadequate Internal Controls at the Central Office Material Weakness Finding Control Number: FS-7741-07-02

A grant payment from the Georgia Department ofEducation in the amount of $100,922, transmitted July 26, 2007 was shown as being deposited in June 2007.

General Ledger Journal entries were not reviewed by someone independent of the General Ledger posting function.

Cause:

These deficiencies were the result of management's failure to ensure that internal controls were established, implemented and functioning.

Effect:

Errors and/or irregularities may not be detected in a timely manner.

Recommendation:

The School District should establish, revise and/or monitor procedures to ensure that bank accounts are properly reconciled to the general ledger and that the Interfund Cash account is accurate. In addition, management should review current policies regarding expenditures and revenues and implement controls to ensure that expenditures and revenues are properly documented, approved and recorded correctly. Also, the School District should establish sufficient internal control procedures to require that all journal entries are approved prior to posting.

-4 -

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2007

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

EXPENDITURES/LIABILITIES/DISBURSEMENTS Improper Use of SPLOST Proceeds Material Noncompliance Finding Control Number: FS-7741-07-03

Condition:

This is a repeat finding (FS-7741-06-05) from fiscal year June 30, 2006. The School District spent Special Purpose Local Option Sales Tax (SPLOST) proceeds on stadium renovations which were not specifically identified in the SPLOST project referendum and do not appear to meet the definition of "capital outlay projects for educational purposes" in State laws regarding imposition and use of sales taxes for educational purposes.

Criteria:

According to Paragraph IV, Section VI, Article VIII of the Constitution of the State ofGeorgia, "the purpose or purposes for which the proceeds ofthe tax are to be used and may be expended include: (1) Capital outlay projects for educational purposes; (2) the retirement of previously incurred general obligation debt with respect only to capital outlay projects of the school system... " O.C.G.A. 48-8-121 states, "The proceeds received from the tax authorized by this part shall be used . . . exclusively for the purpose or purposes specified in the resolution or ordinance calling for imposition ofthe tax".

The Attorney General's Official Opinion 97-7 for O.C.G.A. 20-2-260 (b)(5) states, "The definition of educational facilities specifically excludes swimming pools, tracks, stadiums, and other facilities or portions offacilities used primarily for athletic competition".

Questioned Cost: NIA

Information:

During the year under review, the School District spent $1,485,516 for the equipping and renovating of the Dublin High School stadium.

Cause:

The School District believed this project was covered by references of "renovations and additions at Dublin High School" and "acquisition of certain property and equipment" in its referendum.

-5 -

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2007

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

EXPENDITURES/LIABILITIES/DISBURSEMENTS Improper Use of SPLOST Proceeds Material Noncompliance Finding Control Number: FS-7741-07-03

Effect:

Expenditures of SPLOST funds for stadium renovations appear to be in conflict with State laws regarding imposition and use ofSPLOST funds after considering that Paragraph IV, Section VI, Article VIII ofthe Constitution of the State ofGeorgia indicates SPLOST proceeds should be spent on "capital outlay projects for educational purposes" and the Attorney General has ruled that facilities used primarily for athletic competition do not meet the definition of educational facilities.

Recommendation:

The School District should research this issue, consult with legal counsel and verify if expenditures ofthis nature are an appropriate use ofSPLOST funds in accordance with State law and the SPLOST referendum as approved by the voters of Laurens County.

III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

SPECIAL TESTS AND PROVISIONS Failure to Transfer Funds Timely Nonmaterial Noncompliance U. S. Department of Agriculture Through Georgia Department of Education Food Services - School Breakfast Program (CFDA 10.553) Food Services - National School Lunch Program (CFDA 10.555) Finding Control Number: FA-7741-07-01

Condition:

This is a repeat finding (FA-7741-06-03) from fiscal year ended June 30, 2006. The School District failed to transfer School Breakfast Program (CFDA 10.553) and National School Lunch Program (CFDA 10.555) funds to the school food service account in a timely manner.

Criteria:

USDA Policy 210.14-06 states that USDA funds should be entered into the school food service account as soon as possible on receipt and that any interest on these funds must also be credited to the school food service account.

Questioned Cost: $5,334.68

-6-

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2007

III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

SPECIAL TESTS AND PROVISIONS Failure to Transfer Funds Timely Nonmaterial Noncompliance U. S. Department of Agriculture Through Georgia Department of Education Food Services - School Breakfast Program (CFDA 10.553) Food Services - National School Lunch Program (CFDA 10.555) Finding Control Number: FA-7741-07-01

Information:

Ten receipts were not transferred to the school food service account in a timely manner.

Cause:

The School District failed to implement appropriate procedures to ensure compliance in accordance with Federal guidelines.

Effect:

Failure to ensure appropriate transfers results in noncompliance with the requirements of the Federal grant.

Recommendation:

The School District should ensure that funds are transferred promptly in compliance with Federal guidelines. In addition, the School District should transfer the interest earned on these funds from the general operating bank account into the school food service account.

-7-

SECTIONV MANAGEMENT'S RESPONSES

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF MANAGEMENT'S RESPONSES YEAR ENDED JUNE 30, 2007
Finding Control Number: FS-7741-07-01
We concur with this finding. The School District will implement procedures to ensure that the financial statements are properly prepared in accordance with generally accepted accounting principals.
Finding Control Number: FS-7741-07-02
We concur with this finding. However, we do not feel that it is a matter of Inadequate Internal Controls at the Central Office. The matter of the bank statements not reconciling to the cash accounts again is a repeat ofprevious years ending June 2005, and June 2006, items hitting Interfund Cash. The Central Office staff working in conjunction with CSI hopes to soon have this rectified. Therefore, this problem will persist into the audit for the year ending June 30, 2008. Receivables and Receipts will be reviewed to ensure they are processed timely. The Disbursement process will be reviewed, and controls put into place to ensure all vouchers contain the appropriate documentation. Journal entries will also be reviewed carefully to ensure proper procedures.
Finding Control Number: FS-7741-07-03
We concur with this finding. This is a repeat finding beginning fiscal year 2006, due to this project spanning over a two year fiscal period it should be resolved in this audit year. The Board felt that it was complying with the wishes of the citizens of Dublin, who specifically approved the stadium additions and renovations in the SPLOST starting January 1, 2008. After postponing the project for the new High School because of inflated costs, it was decided to proceed with the stadium project. Before proceeding with future projects, the Board of Education will secure the legal opinion of its attorney before proceeding with each project.
Finding Control Number: FA-7741-07-01
We concur with this finding. The School District will implement procedures to ensure compliance with Federal requirements over the process for the transfer of Federal reimbursements.
Contact Person: Shirley W. Bowen, Finance Director Phone: (478) 277-4017 Fax: (478) 272-1249 E-mail: bowens@dublinirish.org