City of Dublin Board of Education, Laurens County, Georgia, annual financial report for the fiscal year ended June 30, 2010 (including independent auditor's reports)

CITY OF DUBLIN BOARD OF EDUCATION
LAURENS COUNTY, GEORGIA
ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED
JUNE 30,2010
(Including lndependent Auditor's Reports)

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 EXPENDITURESOF FEDERALAWARDS

EXHIBITS

BASIC FINANCIAL STATEMENTS

DISTRICT-WIDE FINANCIAL STATEMENTS

A

STATEMENT OF NET ASSETS

B

STATEMENT OF ACTIVITIES

FUND FINANCIAL STATEMENTS

C

BALANCE SHEET

GOVERNMENTAL FUNDS

D

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET ASSETS

E

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES

GOVERNMENTAL FUNDS

F

RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT

OF REVENUES, EXPENDITURES AND CHANGES IN FUND

BALANCES TO THE STATEMENT OF ACTIVITIES

G

STATEMENT OF FIDUCIARY NET ASSETS

FIDUCIARY FUNDS

H

NOTES TO THE BASIC FINANCIAL STATEMENTS

SCHEDULES

REQUIRED SUPPLEMENTARY INFORMATION

1 SCHEDULE OF REVENUES, EXPENDITURESAND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
GENERAL FUND

SUPPLEMENTARY INFORMATION

2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 3 SCHEDULE OF STATE REVENUE

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY -TABLE OF CONTENTS -
SECTION I FINANClAL SCHEDULES SUPPLEMENTARY INFORMATION 4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 5 ALLOTMENTS AND EXPENDITURES GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) BY PROGRAM
SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER M A l l E R S BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WlTH GOVERNMENT AUDITING STANDARDS INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WlTH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WlTH OMB CIRCULAR A-133
SECTION Ill 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 -
SECTION V MANAGEMENT'S RESPONSES SCHEDULE OF MANAGEMENT'S RESPONSES

SECTION I FINANCIAL

Russell W. Hinton
STATE AUDITOR
(404) 066-2174

DEPARTMENOTF AUDITSAND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
October 24,2011

Honorable Nathan Deal, 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
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 of the 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, 2010, 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 of Education's management. Our responsibility is to express opinions on these financial statements based on our audit.
Except as discussed in the following paragraph, 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 GovernmentAuditngStandards, issued by the Comptroller General of the 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 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 the 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.
Management did not provide an adequate accounting of the amounts reported as capital assets, current year depreciation expense or accumulated depreciation in the governmental activities. The School District's records did not provide sufficient information for the application of other auditing procedures to reasonably determine whether capital assets, depreciation expense or accumulated depreciation were fairly stated.
In our opinion, except for the inability to examine documentation supporting capital assets, as well as the related accumulated depreciation, and depreciation expense in the governmental activities as described in the preceding paragraph, the financial statements referred to previously present fairly, in all material respects, the financial position of the governmental activities of the City of Dublin Board of Education, as of June 30, 2010, and the changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.

In addition, in our opinion, the financial statements referred to previously present fairly, in all material respects, the respective financial position of each major fund, and the aggregate remaining fund information of the City of Dublin Board of Education, as of June 30, 2010, and the 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 October 24, 2011, on our consideration of the City of Dublin Board of Education'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 of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessingthe 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 to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
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 financial statements as a whole. The accompanying supplementary information consists 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, Audib of States, Local Governmen&, and Non-Profit Organizations, are presented for purposes of additional analysis and are nat a required part of the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements, and in our opinion, is fairly stated, in all material respects, in relation to the financial statements as a whole.
A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated section 50-6-24.
Respectfully submitted,
~ u k s e lWl . Hinton, CPA, CGFM State Auditor

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY STATEMENT OF NET ASSETS JUNE 3 0 , 2 0 1 0
ASSETS
Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Other Inventories Capitalized Bond and Other Debt Issuance Costs Capital Assets, Non-Depreciable Capital Assets, Depreciable (Net of Accumulated Depreciation)
Total Assets
LIABILITIES
Accounts Payable Salaries and Benefits Payable Payroll Withholding Payable Interest 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 Unrestricted
Total Net Assets
Total Liabilities and Net Assets

EXHIBIT "A"
GOVERNMENTAL ACTIVITIES

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 ENDEDJUNE 30,2010

EXHIBIT "B"

GOVERNMENTAL ACTIVITIES
Instruction Support Sewices
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 Servlces Enterprise Operations Community Services Food Services Interest on Short-Term and Long-TermDebt
Total Governmental Activities
General Revenues Taxes Property Taxes For Maintenance and Operations Sales Taxes Special Purpose Local Option Sales Tax For Capital Projects Other Sales Tax Grants and Contributions not Restricted to Speciflc Programs Investment Earnings Miscellaneous
Total General Revenues
Change in Net Assets
Net Assets - Beginningof Year

EXPENSES

PROGRAM REVENUES

OPERATING

CHARGES FOR

GRANTS AND

SERVICES

CONTRIBUTIONS

NET (EXPENSES) REVENUES
AND CHANGES IN NET ASSETS

Net Assets - End of Year

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

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY
BALANCE SHEET GOVERNMENTAL FUNDS
JUNE 30,2010

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

Total Assets

LIABILITIESAND FUND BALANCES
LIABILITIES
Accounts Payable Salaries and Benefits Payable Payroll Withholdings Payable Contracts Payable Retainages Payable Depositsand Deferred Revenue
Total Liabilities
FUND BALANCES
Reserved for: Continuanon of Federal Programs Debt Service Capital Projects
Unreserved Designatedfor Student Activities UndesignatedReported in: General Fund
Total Fund Balances

Total Liabilltles and Fund Balances

The notes to the basic financial statements are an integral part of this statement.
- 3 -

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEEl
TO THE STATEMENT OF NET ASSETS JUNE 30,2010
Total Fund Balances - Governmental Funds (Exhibit "C") Amounts reported for Governmental Activ~tiesin 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 Taxes that are not available to pay for current period expenditures are deferred In the funds. Long-Term Liab~lities,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 a t year-end consist of: Bonds Payable Accrued Interest Intergovernmental Contract Capital Leases Payable Capitalized Bond and Other Debt IssuanceCosts Unamortized Bond Premiums Total Long-Term Liabilities
Net Assets of Governmental Activities (Exhibit "A")
The notes to the basic financial statements are an integral part of this statement. -4-

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY
STATEMENTOF REVENUES, EXPENDITURESAND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30,2010

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Chargesfor Services Investment Earnings Miscellaneous
Total Revenues

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

Current Instruction Support Services Pup11Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Adm~nistration Maintenance and Operatlonof Plant Student Transportation Services Central Support Services Other Support Services EnterpriseOperations Community Services Food Services Operatlon
Capital Outlay Debt Services
Prlnc~pal Interest
Total Expenditures
Excessof Revenuesover (under) Expenditures
QTHER FINANCING SOURCES (USES)
Proceedsof Bonds Premiums on Bonds Sold Transfers In Transfers Out
Total Other FinancingSources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning
Fund Balances - Ending

TOTAL

The notesto the baslc financial Statementsare an integral part of thls statement.
- 5 -

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY RECONCILIATIONOF THE GOVERNMENTAL FUNDSSTATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30.2010
Total Net Change in Fund Balances - Governmental Funds (Exhibit "E") Amounts reported for Governmental Activit~esIn the Statement of Activit~esare 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
Taxes reported in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds.
Bond proceeds provide current financial resourcesto Governmental Funds; however, issuing debt increases Long-Term Liabilities in the Statement of Net Assets. In the current per~odp, roceeds were receivedfrom: General Obligation Bonds Issued, Includinga Premium of $294,793.25
Bond issuance costs, deferred gains on refundings and similar items when debt is first issued are reported as an expenditure in Governmental Funds, but are reported as deferred charges on the Statement of Net Assets and amortized over the term of the debt, using the straight-line method. The details of this difference in the current period are as follows: Deferral of Bond lssuance Costs Amortization of Bond lssuance Costs Amortization of Premium of Bondssold Total Bond lssuance Costs
Repaymentof Lon&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
Interest expense reported in the Statement of Activities is recorded as incurred, whereas interest expense in the governmental fund statements is reported when paid.
Change in Net Assets of GovernmentalActivit~es(Exhibit "B")
The notes to the basic financial statements are an integral part of this statement. -6-

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30.2010
ASSETS Cash and Cash Equivalents Accounts Receivable, Net
Other
Total Assets
LIABILITIES Funds Held for Others

EXHIBIT "Go
AGENCY FUNDS

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

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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

Note 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY
REPORTING ENTITY
The City of Dublin Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is 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 of the City of Dublin Board of Education.
District-w i d Statements: The Statement of Net Assets and the Statement of Activities display information about the financial activities of the 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 of the 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 of goods 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 of internal 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.
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 of the School District, except those resources required to be accounted for in another fund.

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30.2010

EXHIBIT "H"

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 of general longterm principal, interest and payingagent'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 of accounting 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 of when 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, and grants. 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 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 of accounting. 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 as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities and acquisitions under capital leases are reported as other financing sources.
The School District funds certain programs by a combination of specific 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.
The State of Georgia reimburses the School District for teachers' salaries and operating costs through the Quality Basic Education Formula Earnings program (QBE). Generally teachers are contracted for the school year (July 1- June 30) and paid over a twelve month contract period, generally September 1through August 31. In accordance with the respective rules and regulations

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

of the QBEprogram, the State of Georgia reimburses the School District over the same twelve month period in which teachers are paid. At June 30, the amount of teachers' salaries incurred but not paid until July and August of the subsequent year are accrued. Since the State of Georgia recognizes its QBE liability for the July and August salaries at June 30, the School District recognizes the same QBE as a receivable and revenue, consistent with symmetrical recognition.
NEW ACCOUNTING PRONOUNCEMENTS
In fiscal year 2010, the School District adopted the Governmental Accounting and Standards Board (GASB) Statement No. 51, Accounting and Reporting for Intangible Assee. The provisions of this Statement generally require retroactive reportingfor intangible assets acquired after June 30, 1980, with the exception of those intangible assets that have indefinite useful lives and those that are considered internally generated.
In addition, the School District adopted GASB Statement No. 53, Accounting and Financial Repofling for Derivative Instruments. The provisions of this Statement impacts disclosure regarding derivative instruments entered into by the state and local governments. Derivative disclosures, if any, will be identified in Note 3.
CASH AND CASH EQUIVALENTS
Composition of Deposits Cash and cash equivalents consist of cash 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 authorizes the School District to deposit its funds in one or more solvent banks, insured Federal savings and loan associations or insured chartered building and loan associations.
l NVESTM ENTS
Composition of Investments lnvestments made by the School District in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interestearning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1)Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(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,

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

(6) The Georgia Fund 1administered 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 of credit 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 of Dublin Board of Commissioners fixed the property tax levy for the 2009 tax digest year (calendar year) on June 3, 2010 (levy date). Laurens County was performing a revaluation, which was eventually discontinued, and the digest had to be corrected for 2009 calendar year, resulting in a lien date after fiscal year end. Taxes were due on August 31, 2010 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2009 tax digest are reported as revenue in the governmental funds for fiscal year 2010. The Dublin City Clerk bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2010, for maintenance and operations amounted to $7,926,517.98.

The tax millage rate levied for the 2009 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

16.77 mills

SALES TAXES

Special Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $2,663,426.62 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 On the basic financial statements, inventories of donated food commodities used in the preparation of meals 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

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30.2010

EXHIBIT "H"

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 of art. 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 if the 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:

Capitalization

Estimated

Policy

Useful Life

Land Land Improvements Buildings and Improvements Equipment Construction in Progress

All
$ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00

N/A
20 years 50 years 5 to 25 years
N/A

Depreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives, with the exception of intangible assets which are amortized.
GENERAL OBLIGATION BONDS
The School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. In the District-wide financial statements, bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line method. Bond issuance costs are reported as deferred charges and amortized over the term of the debt.
In the fund financial statements, the School District recognizes bond premiums and discounts, as well as bond issuance costs during the fiscal year bonds are issued. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 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.
N ET ASSETS
The School District's net assets in the District-wideStatements are classified as follows:
Invested in capital assets, net of related debt - This represents the School District's total investment in capital assets, net of outstanding 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, and debt service 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.
USE OF ESTIMATES
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates.
Note 3: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS
Official Code of Georgia Annotated (O.C.G.A.) 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 of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent of the public funds being secured after the deduction of the amount of deposit insurance. If a depository elects the pooled method (O.C.G.A. Section 45-8-13.1)the aggregate of the market value of the securities pledged to secure a pool of public funds shall be not less than 1 1 0 percent of the 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) lnsurance on accounts provided by the Federal Deposit lnsurance Corporation,

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

(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 or securities guaranteed 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
Custodial credit risk is the risk that in the event of a bank failure, the School District's deposits may not be returned to it. The School District does not have a deposit policy for custodial credit risk. At June 30, 2010, the bank balances were $9,777,230.36. The bank balances were entirely covered by Federal depository insurance.
CATEGORIZATION OF INVESTMENTS
At June 30, 2010, the carrying value of the School District's total investments was $426,024.20, which is materially the same as fair value. This investment consisted entirely of funds invested in the Georgia Fund 1, formerly referred to as LGIP, 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 of the State of Georgia, Office of Treasury and Fiscal Services for the Georgia Fund 1(Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. Additional information on the Georgia Fund 1is disclosed in the State of Georgia Comprehensive Annual Financial Report. This audit can be obtained from the Georgia Department of Audits and Accounts at htt~://www.audits.aa.aov/SGD/cafr.html.
The Primary Liquidity Portfolio consists of Georgia Fund 1which 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 1may not exceed 6 0 days. The weighted average maturity for Georgia Fund 1on June 30,2010, was 46 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 a t their Federally assigned value. See Note 2 - Inventories

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 3 0 , 2 0 1 0

EXHIBIT "H"

Note 5: CAPITAL ASSETS The following is a summary of changes in the Capital Assets during the fiscal year:

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

Balances July 1, 2009

Increases

Decreases

Balances June 30, 2010

$ 1,600,732.00

$

24,364,224.48 $ 9,398,483.07

0.00 $ 1,600,732.00 33,762,707.55

Total Capital Assets, Not Being Depreciated $ 25,964,956.48 $ 9,398,483.07 $

0.00 $ 35,363,439.55

Capital Assets, Being Depreciated: Buildings and Improvements Equipment Land Improvements

$ 27,425,189.10 $ 1,379,480.00 1,080,634.00

2,861.96 $ 120,425.00

0.00 $

27,428,051.06 1,499,905.00 1,080,634.00

Less: Accumulated Depreciation: Buildings and Improvements Ecluipment Land Improvements

8,170,376.00 861,616.00 896,468.00

517,603.00 91,061.00 17,899.00

8,687,979.00 952,677.00 914,367.00

Total Capital Assets, Being Depreciated, Net $ 19,956,843.10 $ -503,276.04 $

0.00 $ 19,453,567.06

Governmental Activity Capital Assets - Net $ 45,921,799.58 $ 8,895,207.03 $

0.00 $ 54,817,006.61

Current year depreciation expense by function is as follows:
Instruction Support Services
General Administration Maintenance and Operation of Plant Student Transportation Services Food Services

Note 6: INTERFUND TRANSFERS

Interfund transfers for the year ended June 30, 2010, consisted of the following:

Transfers From

Transfer to Debt Service Fund

Capital Projects

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

Transfers are used to move Special Purpose Local Option Sales Tax revenues collected by the District-wide Capital Projects Fund and capitalized interest from the sale of bonds to the Debt Service Fund to pay principal and interest on bonds.

Note 7: 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 of loss associated with automobiles. The School District has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the School District's insurance coverage in any of the 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, motor vehicle liability, or property damage, including safety engineering and other loss prevention and control techniques, and to administer one or more groups of self-insurance funds, including the processing and defense of claims brought against members of the system. The 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), errors and omissions, crime 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. A premium is charged when needed by the General Fund to each user program on the basis of the percentage of that fund's payroll to total payroll in order to cover estimated claims budgeted by management based on known claims and prior experience. The School District accounts for claims with expenses/expenditures 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:

Claims and

Beginningof Year

Changes in

Claims

End of Year

Liability

Estimates

Paid

Liability

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 $700,000.00 loss per occurrence, up to the statutory limit. Employers' Liability insurance coverage is also provided by Midwest Employers Casualty Company to provide coverage for potential losses sustained by the Fund in excess of $700,000.00 loss per occurrence, up t o $1,000,000.00, with an aggregate limit of $2,000,000.00.

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

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

Position Covered

Amount

Superintendent All Employees
Note 8: SHORT-TERM DEBT
The School District issues tax anticipation notes in advance of property tax collections, depositing the proceeds in its General Fund. This short-term debt was to provide cash for operations until property tax collections were received by the School District. Article IX, Section V, Paragraph V of the Constitution of the State of Georgia limits the aggregate amount of short-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 3 1of the calendar year in which the debt was incurred.
Short-term debt activity for the fiscal year is as follows:

Begjnning Balance

Issued

Redeemed

Ending Balance

Tax Anticipation Notes

$

0.00 $ 4,325,000.00 $ 4,325,000.00 $

0.00

Note 9: LONG-TERM DEBT

CAPITAL LEASES

The City of Dublin Board of Education 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 of the future minimum lease payments as of the date of their inception.

l NTERGOVERNMENTAL CONTRACT

The City of Dublin Board of Education entered into a contract with the Laurens County Public Facilities Authority, dated April 1,2008, for the issuance of revenue bonds to provide funds to acquire, construct, and equip capital outlay projects of the School District. Under the terms of the contract, the Authority issued $4,500,000.00 (less issuance costs of $83,500.00) in revenue bonds on behalf of the School District. The obligation of the School District is absolute and unconditional so long as any of the bonds remain outstanding. Under the contract, the School District will recommend to the Mayor and the Council of the City of Dublin, Georgia, to exercise its power of taxation on behalf of the School District, to the extent necessary to pay the amounts required to be paid by the contract.

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

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

Purpose

lnterest Rates

General Government - Series 2007 General Government - Series 2008 General Government - Series 2010

lNTERGOVERNMENTAL CONTRACT The debt at June 30, 2010, associated with this agreement is as follows:
Interest Rate Lauarens County Public FacilityAuthority

Amount $ 17,355,000.00
Amount

Voters have authorized $7,995,000.00 in general obligation debt for various construction projects which was not issued as of June 30,2010.
The changes in Long-Term Debt duringthe fiscal year ended June 30,2010, were as follows:

Balance
July 1,2009

Additions

Governmental Funds

Balance

Deductions

June 30,2010

Due Within One Year

G. 0.Bonds
Capital Leases Intergovernmental Contract Bond Premiums Amortized

$ 9,100,000.00$ 9,755,000.00$ l.500.000.00 $ 17,355,000.00$ 2,300,000.00

198,596.00

76,491.00

122,105.00

62,343.00

4,500,000.00

4,500,000.00

0.00

294,793.25

4,094.35

290,698.90

24,566.10

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

At June 30, 2010, payments due by fiscal year which includes principal and interest for these items

are as follows:

Capital Leases

Intergovernmental Contract

Principal

Interest

Principal

Interest

Fiscal Year Ended June 30:

Total Principal and Interest Fiscal Year Ended June 30:

$ 122,105.00 $

8,866.00 $ 4,500,000.00 $ 1,134.720.00

General Obligation Debt

~ - ~-- -

Principal

Interest

Unamort~zed Bond Premium

Total Principal and lnterest
Note 10: ON-BEHALF PAYMENTS
The School District has recognized revenues and costs in the amount of $57,689.13 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 $35,214.52
Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $14,757.28
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 $7,717.33

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

Note 11: SIGNIFICANT COMMITMENTS
The following is an analysis of significant outstanding construction or renovation contracts executed by the School District as of June 30, 2010, together with funding available:

Project

Unearned Executed Contracts

Funding Available From State

Dublin High School

The amounts described in this note are not reflected in the basic financial statements.
Note 12: 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 of routine School District operations. The ultimate disposition of these proceedings is not presently determinable, but is not believed to be material to the basic financial statements.
Note 13: RELATED PARTY TRANSACTIONS
The School District employs the services of the Law Office of Mitchell Warnock, LLC, as legal counsel for the City of Dublin Board of Education. Mitchell Warnock is the son of Charles Warnock, who served as Assistant Superintendent during the year under audit. Current year expenditures to Mitchell Warnock, LLC, totaled $3,975.00.
Note 14: SUBSEOUENT EVENTS
On July 1,2010, the School District issued a tax anticipation note for cash flow purposes for an amount not to exceed $6,000,000.00. Draws, totaling $5,000,000.00 were required to meet the cash flow needs of the School District. The note was repaid on December 3, 2010.
Note 15: POST-EMPLOYMENT BENEFITS
GEORGIA SCHOOL PERSONNEL EMPLOYEES POST-EMPLOYMENT HEALTH BENEFIT FUND
Plan Description. The Georgia School Personnel Post-Employment Health Benefit Fund (School
OPEB Fund) is a cost-sharing multiple-employer defined benefit post-employment healthcare plan that covers eligible former employees of public school systems, libraries and regional educational service agencies. The School OPEB Fund provides health insurance benefits to eligible former employees and their qualified beneficiaries through the State Employees Health Insurance Plan administered by the Department of Community Health. The Official Code of Georgia Annotated (OCGA) assigns the authority to establish and amend the benefit provisions of the group health plans, including benefits for retirees, to the Board of Community Health (Board).

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30.2010

EXHIBIT "H"

Funding Policy. The contribution requirements of plan members and participating employers are established by the Board in accordance with the current Appropriations Act and may be amended by the Board. Contributions of plan members or beneficiaries receiving benefits vary based on plan election, dependent coverage, and Medicare eligibility and election. On average, plan members pay approximately 25 percent of the cost of the health insurance coverage.
Participating employers are statutorily required to contribute in accordance with the employer contribution rates established by the Board. The contribution rates are established to fund all benefits due under the health insurance plans for both active and retired employees based on projected "pay-as-you-go" financing requirements. Contributions are not based on the actuarially calculated annual required contribution (ARC) which represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years.
The combined active and retiree contribution rates established by the Board for employers participating in the School OPEB Fund were as follows for the fiscal year ended June 30, 2010:

For certificated teachers, librarians and regional educational service agencies:

July 2009 August 2009 - October 2009 November 2009 -June 2010

18.534% of covered payroll for August Coverage 14.492% of covered payroll for September - November Coverage 18.534% of covered payroll for December - July Coverage

For non-certificated school personnel:

July 2 0 0 9 -June 2 0 1 0

$162.72 per member per month plus Department of Education contribution of $22,838,311.00

No additional contribution was required by the Board for fiscal year 2010 nor contributed to the State OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the State plan for other post-employment benefits and are subject to appropriation.

The School District's combined active and retiree contributions to the health insurance plans, which equaled the required contribution, for the current fiscal year and the preceding two fiscal years were

as follows:

Percentage

Required

Fiscal Year

Contributed

Contribution

Note 16: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)
Plan Description. The TRS is a cost-sharing multiple-employer defined benefit plan created in 1943 by an act of the Georgia General Assembly to provide retirement benefits for qualifying employees in educational service. A Board of Trustees comprised of active and retired members and ex-officio State employees is ultimately responsible for the administration of TRS. 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.

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

On October 25, 1996, the Board created the Supplemental Retirement Benefits Plan of the Georgia Teachers Retirement System (SRBP-TRS). SRBP-TRS was established as a qualified excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of TRS. The purpose of SRBP-TRS is to provide retirement benefits to employees covered by TRS whose benefits are otherwise limited by IRC Section 415. Beginning July 1,1997, all members and retired former members in TRS are eligible to participate in the SRBP-TRS whenever their benefits under TRS exceed the IRC Section 415 imposed limitation on benefits.
TRS provides service retirement, disability retirement, and survivor's benefits. The benefit structure of TRS is defined and may be amended by State statute. A member is eligible for normal service retirement after 3 0 years of creditable service, regardless of age, or after 1 0 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service.
Normal retirement (pension) benefits paid to members are equal to 2% of the average of the member's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 4 0 years. Early retirement benefits are reduced by the lesser of one-twelfth of 7% for each month the member is below age 6 0 or by 7% for each year or fraction thereof by which the member has less than 30 years of service. It is also assumed that certain cost-of-living adjustments, based on the Consumer Price Index, will be made in future years. Retirement benefits are payable monthly for life. A member may elect to receive a partial lump-sum distribution in addition to a reduced monthly retirement benefit. Death, disability and spousal benefits are also available.
Funding Policy. TRS is funded by member and employer contributions as adopted and amended by the Board of Trustees. Members become fully vested after 1 0 years of service. If a member terminates with less than 1 0 years of service, no vesting of employer contributions occurs, but the member's contributions may be refunded with interest. Member contributions are limited by State law to not less than 5% or more than 6% of a member's earnable compensation. Member contributions as adopted by the Board of Trustees for the fiscal year ended June 30, 2010, were 5.25% of annual salary. The member contribution rate will increase to 5.53% effective July 1,2010. Employer contributions required for fiscal year 2010 were 9.74% of annual salary as required by the June 30, 2007, actuarial valuation. The employer contribution rate will increase to 10.28% effective July 1,2010.
Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNW GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL
YEAR ENDEDJUNE 30.2010

SCHEDULE "1"

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Chargesfor 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 Operat~onof Plant Student Transportation Services Central Support Services Other Support Services Enterprise Operations Community Services Food Services Operation
Debt Service
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCINGSOURCES (USES)
Other Sources Other Uses
Total Other FinancingSources (Uses)
Net Change in Fund Balances
- Fund Balances Beginning

NONAPPROPRIATED BUDGETS

ORIGINAL (1)

FINAL (1)

ACTUAL AMOUNTS

Fund Balances - Ending

Notesto the Schedule of Revenues. ExDendituresand 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 accompanyingschedule 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 basicfinancial statements.

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNlY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30,2010

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 Fresh Fru~atnd Vegetable Program Food Sewlces ARRA- Child Nutrition D~scretionaryGrants Limited Availability
Total Other Programs
Total U. S. Department of Agriculture
Education, U.S. Department of Education of HomelessChildren and Youth Cluster Pass-Through From Georg~aDepartment of Education Educationfor Homeless Ch~ldrenand Youth
Education Technology State Grants Cluster Pass-Through From Georgia Department of Educatlon Education Technology State Grants
Special Education Cluster Pass-Through From Georgia Department of Education Special Education
ARRA - Grants to States
ARRA- Preschool Grants Grants to States Preschool Grants
Total Special Education Cluster
State FiscalStab~lizationFund Cluster Pass-ThroughFrom Georgia Department of Education ARRA - Education State Grants
ntle I, PartA Cluster Pass-ThroughFrom Georgia Department of Education ARRA - Title I Grants to Local Educational Agencies Title I Grants to Local EducationalAgenc~es
Total Title I. Part A Cluster
Other Programs Pass-ThroughFrom Georgia Department of Education Career and Technical Education- Basic Grants to States Irnprov~ngTeacher QualityState Grants Rural Educatlon
Total Other Programs
Total U. S. Deoartment of Education

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

EXPENDITURES IN PERIOD

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNW
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDEDJUNE 30.2010

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT
Health and Human Services, U. S. Department of Child Care and Development Fund Cluster Pass-ThroughFrom Bright Fromthe Start: Georgia Department of Early Care and Learning
- ARRA Child Care and Development Block Grant
Defense. U. S. Department of Direct Department of the Marines R.O.T.C. Program

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

EXPENDITURES IN PERIOD

Total Federal Financial Assistance
N/A = ~ oAvt ailable
Notesto the Schedule of Exwendituresof FederalAwards
(1) Includesthe Federallyassigned value of donated commodities for the Food Donation Program in the amount of $91,657.09.
(2) Expendituresfor the funds earned on the School Breakfast Program ($420,788.68) were not maintained separately and are included in the 2010 National School Lunch Program.
Major Programs are identified by an asterisk (*) in front of the CFDA number.
The School District dld not provide Federal Assistance to any Subrecipient.
The accompanyingschedule 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 financ~asl tatements.

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY
SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30,2010
GRANTS Bright From the Stan: 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 Grades (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities
Category 1 Gifted Student - CategoryVI Remedial 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 Sparsity Nursing Services Vocational Supervisors Mid-term Adjustment Hold-Harmless Education Equalization Funding Grant Food Services Vocational Education Amended Formula Adjustment Other State Programs Alternative Program Apprenticeship Program Duel Enrollment Health Insurance National Teacher Certification Preschool Handicapped State Grant Residential Treatment Centers Grant Teachers' Retirement
Officeof Treasury and FiscalServices Public School Empioyees Retirement

SCHEDULE" 3
GOVERNMENTAL FUND TYPE GENERAL FUND

See notes to the basic financial statements

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30.2010

SCHEDULE "4"

PROJECT
Acquiring, constructing, and equipping renovations and ~mprovementsto 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 technolow upgrades, the acquisition of certaln 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 improvementsto Central ElementarySchool, Susie Dasher ElementarySchool, Saxon Heights Elementaty School, Hillcrest Elementary School. Moore Street Elementary School. and Dublln Middle School.
Acquire, construct, and equip a New Dublin High School, including land acquisition, renovations to the existing gymnasium, construction of tennis courts and a track, and demolition of existing buildings, make renovations and improvements to the Shamrock Bowl, make renovations and improvements at Susie Dasher Elementary School. Moore Street ElementarySchool, and Saxon Heights ElementarySchool. Purchasefood selvice equipment, and acquire schooi buses and maintenance vehicles.
Acquisition of real property and construction, equipping and furnishing of new schooi buildings and facilities, including, but not limited to, a new elementary school including physical education and athletic facilities, and the completion of the new Dublin High School and auditorium; additions, renovations, repairs and improvements to existingschool buildings and facilities. including, but not limited to Moore Street Elementary, Susie Dasher Elementaty, Saxon Heights Elementary, Dublin Middle School, and Hilicrest Center; new physical education and athletic facilities for Dublin High School and Dublin Middle School, including, but not limited to. a tennis court complex at Dublin High School; technology equipment, school nutrition program equipment, and improvements throughout the Dublin School District; the acquisition of school vehicles, including, but not limited to, schooi buses and equipment: additions renovations. repairs and improvements to the central office building including, but not limited to. HVAC; and to retire previously incurred general obligation debt.

ORIGINAL ESTIMATED
COST (1)

CURRENT EST1MATED COSTS (2)

AMOUNT EXPENDED IN CURRENT YEAR (3) (4)

AMOUNT EXPENDED IN PRIOR YEARS (3) (4)

PROJECT STATUS

5 14,850.000.00 $ 14,850,000.00 5

62.756.33 5 7,283.722.20 Ongoing

13,562,200.00

32,972,343.64

7,315,967.52

25,656.376.12 Ongoing

17.750.000.00

17.750,OOO.OO

2,723,632.68

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 projects. Includes all cost from project inception to completion.

(3) The voters of LaurensCounty approved the imposition of a 1%sales tax to fund the above projects and retire associated debt. Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the projects.

(4) In addition to the expenditures shown above, the School District has incurred interest to provide advance funding for the above projects as follows:

Prior Years

$

480,654.01

Current Year

413.823.00

Total

See notes to the basic financial statements

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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY
GENERAL FUND - QUALIN BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES- BY PROGRAM
YEAR ENDED JUNE 30,2010

SCHEDULE" 5

DESCRIPTION
Direct Instructional Programs Kindergarten Program Kindergarten Program-EarlyIntervention Program Primary Grades (1-3) Program Primaty Grades-EarlyIntervention (1-3) Program Upper Elementaty Grades (4-5) Program Upper ElementaryGrades-EarlyIntervention (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 Categoty I1 Category Ill Categoty IV Category V
Gifted Student - Category VI
Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL)
TOTAL DIRECT INSTRUCTIONALPROGRAMS
Media Center Program Staff and Professional Development
TOTAL QBE FORMULA FUNDS

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION(1) (2)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

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

See notes to the basic financial statements.

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

Russell W. Hinton
STATE AUDITOR
(404) 666-2174

DEPARTMENOTF AUDITSAND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
October 24, 2 0 1 1

Honorable Nathan Deal, 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
INDEPENDENT AUDITOR'S 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, 2010, which collectively comprise City of Dublin Board of Education's basic financial statements and have issued our report thereon dated October 24, 2011. The report on governmental activities was qualified for a scope limitation. 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 GovernmentAuditing Standards, issued by the Comptroller General of the United States.
Internal Control Over Financial Re~orting
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 of expressing 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 of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies, or material weaknesses and therefore, there can be no assurances that all deficiencies, significant deficiencies or material weaknesses have been identified. However, as described in the accompanying Schedule of Findings and Questioned Costs, we identified certain deficiencies in internal control over financial reporting that we consider to be material weaknesses.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material w~knessis a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. We consider items FS-7741-10-01, FS-7741-10-02, FS-7741-10-03 and FS-7741-10-04 t o 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 of laws, 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 no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
We noted certain matters that we have reported to management of City of Dublin Board of Education in a separate letter dated October 24, 2011.
City of Dublin Board of Education's response to the findings identified in our audit is described in the accompanying Schedule of Management's Responses. We did not audit City of Dublin Board of Education's response and, accordingly, we express no opinion on it.
This report is intended solely for the information and use of management, members of the City of Dublin Board of Education, others within the entity, 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, a
~ u s & l lW. Hinton, CPA, CGFM State Auditor

Russell W. Hinton
STATE AUDITOR
(404) 666-2174

DEPARTMENOTF AUDITSAND ACCOUNTS
270 Washington Street, S.W., Suite 1 - 1 56 Atlanta, Georgia 30334-8400
October 24,2011

Honorable Nathan Deal, 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
INDEPENDENTAUDITOR'S REPORT ON COMPLIANCE WlTH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WlTH OMB CIRCULAR A-133
Ladies and Gentlemen:

We have audited City of Dublin Board of Education's compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of its major Federal programs for the year ended June 30, 2010. 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 OMB Circular A-133,
Audits o f States, Local Governments, and Nun-Profit Organiations. 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 of compliance 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 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.
As described in item FA-7741-10-01 in the accompanying Schedule of Findings and Questioned Costs, City of Dublin Board of Education did not comply with requirements regarding Allowable Costs/Cost Principles and Period of Availability that are applicable to its Improving Teacher Quality State Grants program (CFDA 84.367). Compliance with such requirements is necessary, in our opinion, for City of Dublin Board of Education to comply with requirements applicable to that program.

In our opinion, except for the noncompliance described in the preceding paragraph, the City of Dublin Board of Education complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major Federal programs for the year ended June 30, 2010. The results of our auditing procedures also disclosed other instances of noncompliance with those requirements, which are described in the accompanying Schedule of Findings and Questioned Costs as items FA-7741-10-02, and FA-7741-10-03.
Internal Control Over Com~liance
Management of City of Dublin Board of Education is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to Federal programs. In planning and performing our audit, we considered City of Dublin Board of Education's internal control over compliance with the requirements that could have a direct and material effect on a major Federal program to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OM6 Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal 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.
Our consideration of internal control over compliance was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control over compliance that might be significant deficiencies or material weaknesses and therefore, there can be no assurance that all deficiencies, significant deficiencies, or material weaknesses have been identified. However, as discussed below, we identified a certain deficiency in internal control over compliance that we consider to be a material weakness.
A deficiency in internal control over cornpfiance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a Federal program on a timely basis. A material weakness in internal mntrol over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a Federal program will not be prevented, or detected and corrected, on a timely basis. We consider the deficiency in internal control over compliance described in the accompanying Schedule of Findings and Questioned Costs as item FA-7741-10-01to be a material weakness.
City of Dublin Board of Education's responses to the findings identified in our audit are described in the accompanying Schedule of Management's Responses. We did not audit City of Dublin Board of Education's responses and, accordingly, we express no opinion on the responses.
This report is intended solely for the information and use of management, members of the City of Dublin Board of Education, others within the entity, 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,

*- .

d*& Ru ell W. Hinton, CPA, CGFM
state Auditor

SECTION Ill 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 QUESTIONEDCOSTS YEAR ENDEDJUNE 30,2010
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
FINDING CONTROL NUMBER AND STATUS
Further Action Not Warranted Further Action Not Warranted Further Action Not Warranted Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Previously Reported Corrective Action Implemented
CORRECTIVE ACTION/RESPONSES
FINANCIAL REPORTING lnadequate Controls over Financial Reporting Finding Control Number: FS-7741-09-01
The Board has begun the process of ensuring proper presentation of financial statements and its reporting process including note disclosures. Procedures will be reviewed and implemented to ensure that all activity is properly recorded in the general ledger. A monitoring process will also be implemented to evaluate the accuracy of the financial statements presented for audit.
CASH AND CASH EQUIVALENTS EXPENDITURES/LlABILlTlES/DISBURSEMENTS GENERAL LEDGER lnadequate Internal Controls at the Central Office Finding Control Number: FS-7741-09-02
The Board will establish, revise and/or monitor procedures to ensure that bank accounts properly reconciled to the general ledger and that the Interfund Cash account is accurate. In addition, management will review current policies regarding expenditures and implement controls to ensure that expenditures are properly documented, approved and recorded correctly. Also, the Board will establish sufficient internal control procedures to require that all journal entries are documented and approved prior to posting.
CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS lnadequate Internal Controls over School Activity Accounts Finding Control Number: FS-7741-09-03
The Board will revise and monitor controls to provide reasonable assurance that transactions are processed according to established procedures. The Board will implement additional procedures to ensure that key accounting functions of custody, record keeping and authorization are separated and that proper controls are established at the various schools.

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONEDCOSTS YEAR ENDED JUNE 30,2010

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS

CORRECTIVE ACTION/RESPONSES

CAPITAL ASSETS Failure to Adequately Maintain Capital Assets Finding Control Number: FS-7741-09-04

The Board will review its capital assets activity and make appropriate adjustments to ensure that the capital assets activity conforms to the Board's approved capital assets policy and generally accepted accounting principles.

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FA-7741-08-01 FA-7741-08-02 FA-7741-09-01 FA-7741-09-02 FA-7741-09-03

Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Partially Resolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

ALLOWABLE COSTS/COST PRINCIPLES Inadequate Internal Control Procedures U. S. Department of Agriculture Through Georgia Department of Education Child Nutrition Cluster (CFDA 10.553, 10.555) Finding Control Number: FA-7741-08-01

The Board will review control procedures in place and implement procedures to ensure that costs are allowable under OMB Circular A-87 and properly approved by management.

SPECIAL TESTS AND PROVISIONS Failure to Transfer Funds Timely U. S. Department of Agriculture Through Georgia Department of Education Child Nutrition Cluster (CFDA 10.553, 10.555) Finding Control Number: FA-7741-08-02

There continue to be times when cash flow problems make it unfeasible to transfer the funds in a timely manner. The School District is in the process of contacting Georgia Department of Education to determine if a refund is appropriate.

CITY OF DUBLIN BOARD OF EDUCATION - WURENS COUNTY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30,2010
PRIOR YEAR FEDERAL AWARD FINDINGS AND OUESTIONED COSTS
FINDING CONTROL NUMBER AND STATUS
ALLOWABLE COSTS/COST PRINCIPLES PERIOD OF AVAILABILITY OF FEDERAL FUNDS Inadequate Internal Control Procedures U. S. Department of Agriculture Through Georgia Department of Education Child Nutrition Cluster (CFDA 10.553, 10.555) U. S. Department of Education Through Georgia Department of Education Special Education Cluster (CFDA 84.027,84.173) Finding Control Number: FA-7741-09-01
The Board will review control procedures in place and implement procedures to ensure that costs are allowable under OMB Circular A-87 and properly approved by management.
ALLOWABLE COSTS/COST PRINCIPLES Time and Attendance Records Not Utilized U. S. Department of Education Through Georgia Department of Education Title I, Part A Cluster (84.010) Special Education Cluster (CFDA 84.027,84.173) Finding Control Number: FA-7741-09-02
The School District is in the process of contacting Georgia Department of Education to determine if a refund is appropriate.
SPECIAL TESTS AND PROVISIONS Failure to Transfer Funds Timely U. S. Department of Agriculture Through Georgia Department of Education Child Nutrition Cluster (CFDA 10.553, 10.555) Finding Control Number: FA-7741-09-03
There continue to be times when cash flow problems make it unfeasible to transfer the funds in a timely manner. The School District is in the process of contacting Georgia Department of Education to determine if a refund is appropriate.

SECTION IV FINDINGS AND QUESTIONED COSTS

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30,2010

I SUMMARY OF AUDITOR'S RESULTS

Financial Statements

Type of auditor's report issue: General Fund; Capital Projects Fund; Debt Service Fund; Aggregate Remaining Fund Information Governmental Activities

Internal control over financial reporting: Material weaknesses identified? Significant deficiencies identified?

Noncompliance material to financial statements noted:

Federal Awards

Internal Control over major programs: Material weakness identified? Significant deficiencies identified?

Type of auditor's report issued on compliance for major programs: Unqualified for all major programs except for lmprovingTeacher Quality State Grants, which was qualified.

Any audit findings disclosed that are required to be reported in accordance with OMB Circular A-133, Section 510(a)?

Identification of major programs:

CFDA Number(s)

Name of Federal Program or Cluster

84.367

Child Nutrition Cluster Title I, Part A Cluster Special Education Cluster State Fiscal Stabilization Fund Cluster Improving Teacher Quality State Grants

Dollar threshold used to distinguish between Type A and Type B programs:

Auditee qualified as low-risk auditee?

Unqualified Qualified Yes
None Reported
Yes None Reported
Yes

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30,2010
II FINANCIAL STATEMENT FINDINGSAND QUESTIONEDCOSTS
FINANCIAL REPORTING Inadequate Controls over Financial Reporting Material Weakness Finding Control Number: FS-7741-10-01
Condition: This is a repeat finding (FS-7741-09-01, FS-7741-08-01and FS-7741-07-01) from the years ended June 30, 2009, June 30, 2008, and June 30, 2007, respectively. 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 of transactions to the general ledger, but extends to accurate preparation and presentation of the financial statements, including note disclosures and SPLOST reporting requirement set for in Official Code of Georgia Annotated (O.C.G.A.) 548-8-122.
Questioned Cost: N/A
Information: Duringthe audit, numerous errors and misclassifications (both material and nonmaterial) were noted with the financial statements presented for audit. These errors are summarized as follows:
Several entries were proposed and accepted by the client to properly record Cash, Contracts and Retainages Payable, Funds Held for Others, Capital Outlay expense, Taxes Receivable, Property Tax Revenues, and SPLOST revenues.
Numerous reclassification entries were made to improve financial statement presentation of Cash, Investments, Receivables and Fund Balance Reserves.
Supplemental Schedules and Notes to the Basic Financial Statements were prepared by the auditor.
The School District did not submit their SPLOST project collections and expenditures as required in O.C.G.A. 548-8-122.
Cause: The School District did not implement an adequate system of internal 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.

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30,2010
II FINANCIAL STATEMENT FINDINGSAND QUESTIONEDCOSTS
FINANCIAL REPORTING Inadequate Controls over Financial Reporting Material Weakness Finding Control Number: FS-7741-10-01
Recommendation: The School District should develop and implement internal controls over 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. In addition, the School District should ensure the SPLOST projects collections and expenditures are reported based on the requirements set forth in O.C.G.A. 548-8-122.
CASH AND CASH EQUIVALENTS EXPENDITURES/LIABILlTlES/DISBURSEMENTS EMPLOYEE COMPENSATION REVENUES/RECEIVABLES/RECEIPTS GENERAL LEDGER Inadequate Internal Controls at the Central Office Material Weakness Finding Control Number: FS-7741-10-02
Condition: This is a repeat finding (FS-7741-09-02, FS-7741-08-02, and FS-7741-07-02) from the years ended June 30, 2009, June 30, 2008, and June 30, 2007, respectively. The accounting procedures of the School District were insufficient to providefor 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: N/A
Information: Cash and Cash Equivalents
The Payroll bank account was not reconciled to the General Ledger. The School District's general ledger reflected an overall balance in the Interfund Cash account of $50,762.01. This amount should always carry an overall balance of zero.
Expenditures/Liabilities/Disbursements A review of voucher packages revealed the following deficiencies: Numerous voucher packages could not be located. Several voucher packages were missing adequate documentation or proper approval. Several voucher packages were charged to the wrong object codes or improper period. No subsidiary listing of Accounts Payable was provided.

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF FINDINGSAND QUESTIONEDCOSTS YEAR ENDED JUNE 30,2010
II FINANCIALSTATEMENT FINDINGSAND QUESTIONEDCOSTS
CASH AND CASH EQUIVALENTS EXPENDlTURES/LIABILlTlES/DISBURSEMENTS EMPLOYEE COMPENSATION REVENUES/RECEIVABLES/RECEIPTS GENERAL LEDGER Inadequate Internal Controls at the Central Office Material Weakness Finding Control Number: FS-7741-10-02
Employee Compensation No subsidiary listing of Salary and Benefits Payable or Payroll Withholdings Payable was provided.
Revenues/Receiva bles/Receipts No subsidiary listing of Accounts Receivable was provided.
General Ledger A review of journal entries revealed the following deficiencies: a Journal entries were not reviewed by someone independent of the General Ledger posting function. a Numerous journal entries did not have sufficient supporting documentation. Due to this lack of documentation, severaljournal entries could not be determined to be valid or appropriate.
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 implement controls to ensure that expenditures are properly documented, approved and recorded correctly. Subsidiary listings should be available for Accounts Receivable, Accounts Payable, Salary and Benefits Payable and Payroll Withholdings Payable. Also, the School District should establish sufficient internal control proceduresto require that all journal entries are documented and approved prior to posting.

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF FINDINGSAND QUESTIONEDCOSTS YEAR ENDED JUNE 30,2010
II FINANCIAL STATEMENT FINDINGSAND QUESTIONEDCOSTS
CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS Inadequate Internal Controls over School Activity Accounts Material Weakness Finding Control Number: FS-7741-10-03
Condition: This is a repeat finding (FS-7741-09-03 and FS-7741-08-03)from the years ended June 30, 2009, and June 30, 2008, respectively. The accounting procedures of the School District were insufficient to provide for adequate internal controls over the school activity accounts.
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: N/A
Information: Cash and Cash Equivalents
The following deficiencies were noted: Several bank accounts were not reconciled t o the General Ledger.
r Several bank reconciliations showed no evidence of review by someone other than the preparer. The bank reconciliation function was not separated from the record keeping and voucher payment functions.
Revenues/Receivables/Receipts Based on a review of receipts, the following deficiencies were noted: Several athletic gate receipt reconciliations were missing. Expenses were paid out of athletic gate receipts prior to being deposited and recorded. The deposit preparation function was not separated from the record keeping and cash custody functions.
Several accounts which were not custodial in nature were recorded as agency Funds Held for Others. Due to the materiality of the balances of these accounts, an adjustment was proposed and accepted by the client to properly report Funds Held for Others.
Cause: These deficiencies were a result of management's failure to ensure that internal controls were established, implemented and functioning at the school level.
Effect: Errors and/or irregularities may not be detected in a timely manner.
Recommendation: Management should revise and monitor controls to provide reasonable assurance that transactions are processed according to established procedures. Management should implement additional procedures to ensure that the key accounting functions of custody, recordkeeping and authorization are separated and that proper controls are established a t the various schools.

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30,2010
I1 FINANCIALSTATEMENT FINDINGSAND QUESTIONEDCOSTS
CAPITAL ASSETS Failureto Adequately Maintain Capital Assets Material Weakness Finding Control Number: FS-7741-10-04
Condition: This is a repeat finding (FS-7741-09-04) from the year ended June 30, 2009. The School District did not adequately maintain capital assets inventory records.
Criteria: Chapter 37 Implementing a Cap/al Asset;s Management System of the Financial Management for Georgia Local Units of Administration provides that School Districts must establish fixed asset policies, define system requirements, implement a fixed asset system, and maintain fixed asset inventory records.
Questioned Cost: N/A
Information: A review of the School District's capital assets policies and procedures and the related capital assets records noted the following deficiencies:
The School District has not updated their capitalization policy to include the adoption of Governmental Accounting Standards Board (GASB) Statement No. 51, Accounting and Reporting for IntangibleAssets. The subsidiary ledger did not agree to the Financial Statements. Construction in Progress additions were not calculated properly. An audit entry was proposedand accepted by the client for the governmental activities financial statements. Capital assets additions were not capitalized in the year under review. Depreciation expense and the related Accumulated Depreciation for the year under review were not recorded properly. A physical inventory of capital assets has not been performed in several years.
Cause: The School District failed to properly maintain its capital assets records in accordance with the School District's approved capital assets policy and requirements set-forth in Chapter 37 Implementing a &pita1 Assets Management System of the Financial Management for Geor~iaLocal Units of Administration.
Effect: The failure of the School District t o properly account for capital assets activity can lead to inaccurate internal and external reporting, as well as noncompliance with generally accepted accounting principles.
Recommendation: The School District should review its capital assets activity and make appropriate adjustments to ensure that the capital assets activity conforms to the School District's approved capital assets policy and generally accepted accounting principles.

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30,2010
Ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
ALLOWABLE COSTS/COST PRINCIPLES PERIOD OF AVAILABILITY OF FEDERAL FUNDS Inadequate Internal Control Procedures Material Weakness Material Noncompliance U. S. Department of Education Through Georgia Department of Education Special Education Cluster (CFDA 84.027, CFDA 84.173, CFDA 84.391, CFDA 84.392) Title I, Part A Cluster (CFDA 84.010, CFDA 84.389) lmproving Teacher Quality State Grants (CFDA 84.367) Finding Control Number: FA-7741-10-01
Condition: This is a repeat finding (FA-7741-09-01 and FA-7741-08-01) from the years ended June 30, 2009, and June 30, 2008, respectively. There were deficiencies in internal controls related to vendor payments for the Special Education Cluster (CFDA 84.391, CFDA 84.392, CFDA 84.027, and CFDA 84.173), Title I, Part A Cluster (CFDA 84.010 and CFDA 84.389) and the lmproving Teacher Quality State (CFDA 84.367) grants.
Criteria: Provisions of the OMB Circular A-87, Cost Principles for State, Local and Indian Tribal Governments require that "governmental units are responsible for efficient and effective administration of Federal awards through the application of sound management practices" and "to be allowable under Federal awards, costs must be adequately documented".
Questioned Cost: $3,051.97 (CFDA 84.367) $947.00 (CFDA 84.027)
Information: A review of voucher packages of the Title I, Part A Cluster revealed that two voucher packages did not have approved requisitions or purchase orders.
A review of voucher packages of the lmproving Teacher Quality State Grant program revealed that one voucher package was missing the original invoice, one expense reimbursement report lacked the Superintendent's approval, three voucher packages were charged to the improper object code and two were not in the proper period.
A review of voucher packages of the Special Education Cluster revealed that two voucher packages did not have original invoices, three were charged to the improper object code and one was not in the proper period.
Cause: Management failed to implement controls for monitoring compliance with Federal guidelines to ensure that items purchased for the Special Education Cluster, Title I, Part A Cluster and lmproving Teacher Quality State Grants program were properly reviewed and approved as allowable expenditures prior to being charged to the applicable program.

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30,2010
Ill FEDERALAWARD FINDINGS AND QUESTIONEDCOSTS
ALLOWABLE COSTS/COST PRINCIPLES PERIOD OF AVAILABILITY OF FEDERAL FUNDS Inadequate Internal Control Procedures Material Weakness Material Noncompliance U. S. Department of Education Through Georgia Department of Education Special Education Cluster (CFDA84.027, CFDA 84.173, CFDA 84.391, CFDA 84.392) Title I, Part A Cluster (CFDA 84.010, CFDA 84.389) lmproving Teacher QualityState Grants (CFDA 84.367) Finding Control Number: FA-7741-10-01
Effect: Failure to adequately monitor disbursements for the Special Education Cluster, Title I, Part A Cluster and lmproving Teacher Quality State Grants program funds could result in noncompliance with the requirements of these Federal grants.
Recommendation: The School District should review control procedures in place and implement procedures to ensure that costs are allowable under OMB Circular A-87 and properly approved by management.
SPECIAL TESTS AND PROVISIONS Failure to Transfer Funds Timely 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-7741-10-02
Condition: This is a repeat finding (FA-7741-09-03, FA-7741-08-02, and FA-7741-07-01) from the years ended June 30, 2009, June 30, 2008, and June 30, 2007, respectively. 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: $667.00
Information: 2 4 of the 27 receipts reviewed were not transferred to the School Food Service account in a timely manner. Our calculations indicate that approximately $667.00 in interest was earned by the general operating bank account on school food service funds.

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30.2010
Ill FEDERALAWARD FINDINGS AND QUESTIONEDCOSTS
SPECIAL TESTS AND PROVISIONS Failure to Transfer Funds Timely 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-7741-10-02
Cause: The School District failed to implement appropriate procedures to ensure compliance in accordance with Federal guidelines.
Effect: Failure to ensure appropriate transfers can result 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 questioned cost from their general operating bank account into their school food bank account.
SPECIAL TESTS AND PROVISIONS-SCHOOLWIDE PROGRAMS Inadequate Schoolwide Program Plans U. S. Department of Education Through Georgia Department of Education Title I, Part A Cluster (CFDA 84.010 and CFDA 84.389) ImprovingTeacher QualityState Grants (CFDA 84.367) Finding Control Number: FA-7741-10-03
Condition: Schoolwide plans for the participating schools did not include all the required components and were not sufficient to meet the requirements of Title I, Part A Cluster (CFDA 84.010 and CFDA 84.389) or lmprovingTeacher QualityState Grants (CFDA 84.367).
Criteria: Title I, Section 1114(b) (1) states in part:
a) To operate a schoolwide program, a school must include the following three core elements: 1) Comprehensive needs assessment of the entire school. 2) Comprehensive plan based on data from the needs assessment. 3) Annual evaluation of, and results achieved by, the schoolwide program and revision of the schoolwide plan based on that evaluation.
b) A schoolwide plan must also include the following components: 1) Schoolwide reform strategies. 2) Instruction by highly qualified professional staff. 3) Strategies to increase parental involvement.

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNN SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30,2010
Ill FEDERAL AWARD FINDINGSAND QUESTIONEDCOSTS
SPECIAL TESTS AND PROVISIONS-SCHOOLWIDEPROGRAMS Inadequate Schoolwide Program Plans U. S. Department of Education Through Georgia Department of Education Title I, Part A Cluster (CFDA 84.010 and CFDA 84.389) ImprovingTeacher QualityState Grants (CFDA 84.367) Finding Control Number: FA-7741-10-03
4) Additional support to students experiencing difficulty. 5) Transition plans for assisting preschool children in the successful transition to the
schoolwide program.
Questioned Cost: N/A
Information: Our review of the participating facility schoolwide plans revealed that the required components of a schoolwide plan, as outlined on the Georgia Department of Education Schoolwide Plan Checklist, were not sufficiently addressed, or in some cases not included or easily identifiable.
Cause: These deficiencies were a result of management's failure to ensure that Federal award guidelines were followed.
Effect: Failure to implement adequate schoolwide plans may result in noncompliance with the Federal program.
Recommendation: Management should ensure that schoolwide plans are developed to address each component of a schoolwide program as outlined in Title I, Section 1114(b)(l).

SECTION V MANAGEMENT'S RESPONSES

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF MANAGEMENT'S RESPONSES YEAR ENDED JUNE 30,2010
Finding Control Number: FS-7741-10-01
With the recent change in the finance directorship, the district has begun the process of implementing the controls necessary to ensure that the financial statements are properly prepared in accordance with generally accepted accounting principles and standards. Since the change in leadership, the district has recognized significant strides in its financial reporting. We are confident that this progression will be reflected in upcoming audits. This repeat finding was anticipated given that the change in leadership did not occur until almost midyear of FY 2011, which was after the audit period.
Finding Control Number: FS-7741-10-02
Beginning with the change in administration in the finance department, the workflow of the department was restructured to address much of the concerns noted in the audit report. These changes include but are not limited to the performance of monthly reconciliations of the various bank accounts to the general ledger, segregation of the accounts payable and fund ledger duties, and implementation of other internal controls and procedures to ensure that all balance sheet and income statement accounts are properly documented, authorized, and recorded in accordance with recommended state, Federal, and local financial policies and procedures.
Finding Control Number: FS-7741-10-03
The district has revised the school activity accounts recordkeeping process to ensure that the athletic gate receipts and revenues are properly recorded and accounted for in the financial accounting system. In addition, every effort is made to ensure that the controls in place over school activity accounts provide reasonable assurance that all balance sheet and income statement accounts are properly accounted for and recorded.
Finding Control Number: FS-7741-10-04
To improve the accountability of capital assets, a physical inventory count was performed, which will serve as the base count for future adjustments. Annual reviews of the capital assets will be performed and appropriate adjustments made for the recording of additions, retirements, and depreciation expense in accordance with generally accepted accounting principles and procedures and district policy. This review will include appropriate adjustments to the district's asset capitalization policy.
Finding Control Number: FA-7741-10-01
The controls referenced above for Financial Statement: Finding Control Nos. FS-7741-10-01and FS7741-10-02 were implemented to address this finding as well. The district has made a concerted effort to improve the internal controls and procedures throughout the organization, regardless of funding source. The district will continue with this process to ensure that Federally funded expenditure purchases are expended in compliance with Federal guidelines. This includes ensuring that the purchases are properly documented, authorized, and expended in accordance with district initiatives and programmatic needs prior to being charged to the applicable Federal program.

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY
SCHEDULE OF MANAGEMENT'S RESPONSES YEAR ENDED JUNE 30,2010

Finding Control Number: FA-7741-10-02

Like most districts across the state, the Dublin City Schools continue to be challenged with cash flow concerns. As a result, we are unable to consistently perform the transfers from the general fund bank account to the school food service bank account in a timely fashion. The district is committed to improving this process and will make every effort to comply with this requirement. Additional interest due for failure to make the timely transfers will be remitted to school food service.

Finding Control Number: FA-7741-1@03

With the recent change in the administration of the Title I Federal programs, the new administrator has worked closely with the appropriate state level program managers to make the necessary adjustments to ensure that going forward all plans include the required components and meet the required deadlines.

Contact Person: Telephone: Fax: Email:

Theresa Thornton, Director of Finance (478) 277-4017 (478) 272-1249 theresa.thornton@dublincityschools.us