CITY OF DUBLIN BOARD OF EDUCATION
LAURENS COUNTY, GEORGIA
ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2011
(Including Independent 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 EXPENDITURES OF FEDERAL AWARDS

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, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND

SUPPLEMENTARY INFORMATION

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

Page
1 2 4 5 6 7 8 9
27 28 30

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

SECTION I
FINANCIAL
SCHEDULES
SUPPLEMENTARY INFORMATION
4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 5 ALLOTMENTS AND EXPENDITURES
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) BY PROGRAM

Page
31 33

SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
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
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133

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

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

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

SECTION I FINANCIAL

Greg S. Griffin
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
October 3, 2012

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, 2011, 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.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Board's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to previously present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Dublin Board of Education, as of June 30, 2011, 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.

2011ARL-11

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 3, 2012, 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 assessing the results of our audit.
The Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on page 27, is not a required part of the basic financial statements but is supplementary information required by accounting principles generally accepted in the United States of America. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures, 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.
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, Audits of States, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, the information 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,

GSG:as 2011ARL-11

Greg S. Griffin State Auditor

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY STATEMENT OF NET ASSETS JUNE 30, 2011
ASSETS
Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Other Inventories Deferred Charges Capital Assets, Non-Depreciable Capital Assets, Depreciable (Net of Accumulated Depreciation)
Total Assets
LIABILITIES
Accounts Payable Salaries and Benefits Payable Short-Term Debt Interest Payable Contracts Payable Retainages Payable Deposits and Deferred Revenues 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 (Deficit)
Total Net Assets
Total Liabilities and Net Assets

EXHIBIT "A"

GOVERNMENTAL ACTIVITIES

$

5,235,554

899,735

929,019 1,735,731
179,779 126,063
43,147 168,661 41,857,717 19,654,116

$

70,829,522

$

383,494

3,438,185

2,535,874

167,640

858,529

65,995

367,403

2,584,328 17,296,567

$

27,698,015

$

43,047,192

661,523 167,641 -744,849

$

43,131,507

$

70,829,522

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

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2011

GOVERNMENTAL ACTIVITIES
Instruction Support Services
Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Operations of Non-Instructional Services Enterprise Operations Community Services Food Services Interest on Short-Term and Long-Term Debt
Total Governmental Activities
General Revenues Taxes Property Taxes For Maintenance and Operations Sales Taxes Special Purpose Local Option Sales Tax For Debt Services Other Sales Tax Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous
Total General Revenues
Change in Net Assets
Net Assets - Beginning of Year
Net Assets - End of Year

EXPENSES

CHARGES FOR SERVICES

$

17,291,153 $

1,423,115 1,575,894
445,186 707,695 1,577,536 426,504 2,423,557 1,239,530 334,600 139,235

17,994 1,492
1,181,242 680,950

$

29,465,683 $

241,369
4,586 68,930 314,885

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

EXHIBIT "B"

PROGRAM REVENUES OPERATING GRANTS AND
CONTRIBUTIONS

CAPITAL GRANTS AND CONTRIBUTIONS

NET (EXPENSES) REVENUES
AND CHANGES IN NET ASSETS

$

12,757,288 $

354,887 1,296,049
349,838 749,528 1,014,565
1,599 780,654
13,970 1,826
107,962

5,238

1,611,622

$

19,045,026 $

429,360 $
6,264 5,152 76,292
17,970 535,038 $

-3,863,136
-1,068,228 -279,845 -95,348 48,097 -562,971 -424,905
-1,637,751 -1,149,268
-332,774 -31,273
-12,756 3,094
517,280 -680,950
-9,570,734

$

7,636,796

2,496,208 60,834
285,344 21,504
734,988

$

11,235,674

$

1,664,940

41,466,567

$

43,131,507

- 3 -

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30, 2011

EXHIBIT "C"

ASSETS
Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Other Inventories Due from Other Funds
Total Assets

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTAL

$ 3,824,889 $ 7,698
692,501 1,735,731
179,779 126,063
43,147 629,401

781,346 $ 891,955 236,518
458,746

629,319 $ 82

5,235,554 899,735
929,019 1,735,731
179,779 126,063
43,147 1,088,147

$ 7,239,209 $ 2,368,565 $

629,401 $ 10,237,175

LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts Payable Salaries and Benefits Payable Short-Term Debt Due to Other Funds Contracts Payable Retainages Payable Deposits and Deferred Revenue
Total Liabilities
FUND BALANCES
Nonspendable Restricted Unassigned
Total Fund Balances
Total Liabilities and Fund Balances

$

327,497 $

3,438,185

2,535,874

458,746

880,312 $ 7,640,614 $

55,997
$ 858,529
65,995
980,521 $

$ 629,401
629,401 $

383,494 3,438,185 2,535,874 1,088,147
858,529 65,995
880,312
9,250,536

$

43,147

618,376 $

-1,062,928

$ -401,405 $

$ 1,388,044
1,388,044 $

0 $

43,147

2,006,420

-1,062,928

0 $

986,639

$ 7,239,209 $ 2,368,565 $

629,401 $

10,237,175

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

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS JUNE 30, 2011

EXHIBIT "D"

Total Fund Balances - Governmental Funds (Exhibit "C")
Amounts reported for Governmental Activities in the Statement of Net Assets are different because:
Capital Assets used in Governmental Activities are not financial resources and therefore are not reported in the funds. These assets consist of:
Land Construction in Progress Land Improvements Buildings Equipment Accumulated Depreciation
Total Capital Assets
Property Taxes that are not available to pay for current period expenditures are deferred in the funds.
Other Long-Term Assets are not available to pay for current period expenditures and therefore, are deferred on the Statement of Net Assets
Deferred Charges - Capitalized Bond Issuance Costs
Long-Term Liabilities, including Bonds Payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. Long-Term Liabilities at year-end consist of:
Bonds Payable Accrued Interest Capital Leases Payable Intergovernmental Contract Unamortized Bond Premiums
Total Long-Term Liabilities
Net Assets of Governmental Activities (Exhibit "A")

$

986,639

$ 1,600,732 40,256,985 1,080,634 27,428,051 2,394,895 -11,249,464

61,511,833 512,909

168,661

$ -15,055,000 -167,640 -59,762
-4,500,000 -266,133

-20,048,535

$

43,131,507

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

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2011

EXHIBIT "E"

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Enterprise Operations Community Services Food Services Operation
Capital Outlay Debt Services
Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Transfers In Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning
Fund Balances - Ending

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTAL

$ 7,944,380 60,834 $
12,554,508 6,852,154 314,885 10,790 734,988

2,496,208
9,325 $ 458,746

$ 28,472,539 $ 2,964,279

$ 1,389

7,944,380 2,557,042 12,554,508 6,852,154
314,885 21,504
1,193,734

1,389 $ 31,438,207

$ 17,690,808 $

246,477

$ 17,937,285

1,423,115 1,575,894
418,214 698,213 1,575,150 425,979 2,430,838 1,239,458 334,353 139,235
17,994 1,492
1,165,407

26,972 2,386 $
493,679 247
5,573,124

1,423,115

1,575,894

445,186

698,213

1,577,536

525

426,504

2,430,838

1,733,137

334,600

139,235

17,994

1,492

1,165,407

5,573,124

5,432 26

56,911 5,845

2,300,000 709,201

2,362,343 715,072

$ 29,141,608 $ 6,405,641 $ 3,009,726 $ 38,556,975

$ -669,069 $ -3,441,362 $ -3,008,337 $ -7,118,768

$

27,670

$ 2,135,492 $ 2,163,162

$ -2,163,162

-2,163,162

$

27,670 $ -2,163,162 $ 2,135,492 $

0

$ -641,399 $ -5,604,524 $ -872,845 $ -7,118,768

239,994

6,992,568

872,845

8,105,407

$ -401,405 $ 1,388,044 $

0 $

986,639

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

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2011

EXHIBIT "F"

Total Net Change in Fund Balances - Governmental Funds (Exhibit "E")
Amounts reported for Governmental Activities in the Statement of Activities are different because:
Capital Outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activities, the cost of Capital Assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are:
Capital Outlay Depreciation Expense
Excess of Capital Outlay over Depreciation Expense
Taxes reported in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds.
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:
Amortization of Bond Issuance Costs Amortization of Bond Premium
Total Bond Issuance Costs
Repayment of Long-Term Debt is reported as an expenditure in Governmental Funds, but the repayment reduces Long-Term Liabilities in the Statement of Net Assets. In the current year, these amounts consist of:
Bond Principal Retirements Capital Lease Payments
Total Long-Term Debt Repayments
Interest expense reported in the Statement of Activities is recorded as incurred, whereas interest expense in the governmental fund statements is reported when paid.

$

-7,118,768

$

7,389,267

-694,441

6,694,826 -307,584

$

-42,137

24,566

-17,571

$

2,300,000

62,343

2,362,343 51,694

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

$

1,664,940

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

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30, 2011
ASSETS Cash and Cash Equivalents
LIABILITIES Funds Held for Others

EXHIBIT "G"

AGENCY FUNDS

$

25,100

$

25,100

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

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2011

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-wide 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. 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.
The School District reports the following major governmental funds:
General Fund is the School District's primary operating fund. It accounts for and reports all financial resources not accounted for and reported in another fund.
District-wide Capital Projects Fund accounts for and reports financial resources including Special Purpose Local Option Sales Tax (SPLOST) and Bond Proceeds that are restricted, committed or assigned to the expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets.
Debt Service Fund accounts for and reports financial resources that are restricted, committed, or assigned including taxes (sales) legally restricted for the payment of general long-term principal and interest.
- 9 -

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2011

EXHIBIT "H"

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 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, grants and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year in which the underlying transaction (sale) takes place. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
The School District uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts.
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis 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 System 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 1 through August 31. In accordance with the respective rules and regulations of the QBE program, the State of Georgia reimburses the School System 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 System recognizes the same QBE as a receivable and revenue, consistent with symmetrical recognition.
NEW ACCOUNTING PRONOUNCEMENTS
In fiscal year 2011, the School District adopted the Governmental Accounting Standards Board (GASB) Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. The provisions of this Statement establish accounting and financial reporting standards for all governments that report governmental funds. It establishes criteria for classifying fund balances into specifically defined classifications and clarifies definitions for governmental funds.

- 10 -

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2011

EXHIBIT "H"

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.
INVESTMENTS Composition of Investments
Investments 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,
6. The Georgia Fund 1 administered by the State of Georgia, Office of the State Treasurer,
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, 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 fixed the property tax levy for the 2010 tax digest year (calendar year) on November 18, 2010 (levy date). Taxes were due on January 31, 2011 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2010 tax digest are reported as revenue in the governmental funds for fiscal year 2011. 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
- 11 -

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2011

EXHIBIT "H"

reporting level, during the fiscal year ended June 30, 2011, for maintenance and operations amounted to $7,944,380.
The tax millage rate levied for the 2010 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

19.705 m ills

SALES TAXES
Special Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $2,496,208 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 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.

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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2011

EXHIBIT "H"

Capitalization thresholds and estimated useful lives of capital assets reported in the District-wide statements are as follows:

C a pita liz a tio n Policy

Estim ate d Useful Life

Land Construction in Progress Land Im provem ents Buildings and Im provem ents Equipm e nt

Any Amount

$

5 ,0 0 0

$

5 ,0 0 0

$

5 ,0 0 0

$

5 ,0 0 0

N/A N/A 20 to 80 years 10 to 80 years 5 to 50 years

Depreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives.
GENERAL OBLIGATION BONDS
The School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. 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 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.
NET ASSETS
The School District's net assets in the District-wide Statements are classified as follows:
Invested in capital assets, net of related debt - This represents the School District's total investment in capital assets, net 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, debt service and capital projects in accordance with restrictions imposed by external third parties.
Unrestricted net assets - Unrestricted net assets represent resources derived from property taxes, sales taxes, grants and contributions not restricted to specific programs, charges for services, and miscellaneous revenues. These resources are used for transactions relating to the educational and general operations of the School District, and may be used at the discretion of the Board to meet current expenses for those purposes.
FUND BALANCES
The School District's fund balances are classified as follows:
Nonspendable Amounts that cannot be spent either because they are in a nonspendable form or because they are legally or contractually required to be maintained intact.

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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2011

EXHIBIT "H"

Restricted Constraints are placed on the use of resources are either (1) externally imposed conditions by creditors, grantors, contributors, or laws and regulations of other governments or (2) imposed by law through constitutional provisions or enabling legislation.

Committed Amounts that can be used only for specific purposes pursuant to constraints imposed by formal action of the Board of Education. The Board of Education is the School District's highest level of decision-making authority, and the formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution approved by the Board. Committed fund balance also should incorporate contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements.
Assigned Amounts that are constrained by the School District's intent to be used for specific purposes, but are neither restricted nor committed. The intent should be expressed by (1) the Board of Education or (2) the budget or finance committee, or the Superintendent, or designee, to assign amounts to be used for specific purposes.

Unassigned The residual classification for the General Fund. This classification represents fund balances that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the General Fund.

Fund Balances of the Governmental Funds at June 30, 2011, are as follows:

N o nspe nda ble In v e n to rie s
Restricted Continuation of Federal Program s Capital Projects Debt Service
Unassigned

$

$

6 1 8 ,3 7 6

1 ,0 5 2 ,7 6 3

3 3 5 ,2 8 1

4 3 ,1 4 7
2 ,0 0 6 ,4 2 0 -1 ,0 6 2 ,9 2 8

Fund Balance, June 30, 2011

$

9 8 6 ,6 3 9

It is the goal of the School District to achieve and maintain unassigned, assigned and committed fund balances in the general fund at fiscal year end of not less than 8.3% of expenditures, not to exceed 15% of the total budget of the subsequent fiscal year, net of any committed reserve balance for capital expenditures and assigned fund balances "to cover unanticipated deficiencies in revenue or unanticipated expenditures", in compliance with Official Code of Georgia Annotated Section 20-2167(a)5. As a result, the fund balance amount will:
provide adequate funding to cover approximately one (1) month or 8.3% of operating expenses,
provide the liquidity necessary to accommodate the District's uneven cash flow, which is inherent in its periodic property tax collections,
provide the liquidity to respond to contingent liabilities, and provide additional resources for other funds.
If the total of the unassigned, assigned and committed fund balances (net of previous allowances) at fiscal year end falls below the goal, the School District shall develop a restoration plan to achieve and maintain the minimum fund balance. Unbudgeted School Activity Funds shall be excluded from the calculation.

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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2011

EXHIBIT "H"

When both restricted and unrestricted amounts of fund balance are available for use for expenditures incurred, it is the School District's policy to use restricted amounts of fund balance first and then unrestricted amounts as they are needed. For unrestricted amounts of fund balance, it is the School District's policy to use fund balance in the following order:
(i) Committed

(ii) Assigned

(iii) Unassigned DEFICIT FUND BALANCES

The fund reporting a deficit fund balance at June 30, 2011, is as follows:

Fund Type/Fund Nam e

Deficit Balance

General Fund

$

1 ,0 6 2 ,9 2 8

The School District plans to eliminate the deficit by implementing furloughs, staff reductions and reducing future expenditures.
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 110 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. Insurance on accounts provided by the Federal Deposit Insurance Corporation,
3. Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
4. Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,
5. Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,

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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2011

EXHIBIT "H"

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, 2011, the bank balances were $9,651,727. The bank balances were entirely covered by Federal depository insurance or collateralized with securities held by the pledging financial institution's trust department or agent in the School District's name.
CATEGORIZATION OF INVESTMENTS
At June 30, 2011, the carrying value of the School District's total investments was $899,735, 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 the State Treasurer 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 the State Treasurer for the Georgia Fund 1 (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. Additional information on the Georgia Fund 1 is disclosed in the State of Georgia Comprehensive Annual Financial Report. This audit can be obtained from the Georgia Department of Audits and Accounts at http://www.audits.ga.gov/SGD/cafr.html.
The Primary Liquidity Portfolio consists of Georgia Fund 1 which is not registered with the SEC as an investment company but does operate in a manner consistent with the SEC's Rule 2a-7 of the Investment Company Act of 1940. The investment is valued at the pool's share price, $1.00 per share. The pool is an AAAm rated investment pool by Standard and Poor's. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2011, was 59 days.
NOTE 4: NON-MONETARY TRANSACTIONS
The School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 2 Inventories

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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2011

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, 2010

Increases

Decreases

Balances June 30, 2011

$

1,600,732

33,762,708 $

6,494,277 $

$ 0

1,600,732 40,256,985

Total Capital Assets, Not Being Depreciated $

35,363,440 $

6,494,277 $

0$

41,857,717

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

$

27,428,051

1,499,905 $

1,080,634

$ 894,990

0$

27,428,051 2,394,895 1,080,634

Less: Accumulated Depreciation: Buildings and Improvements Equipment Land Improvements

8,687,979 952,677 914,367

533,637 142,905
17,899

9,221,616 1,095,582
932,266

Total Capital Assets, Being Depreciated, Net $

19,453,567 $

200,549 $

0$

19,654,116

Governmental Activity Capital Assets - Net $

54,817,007 $

6,694,826 $

0$

61,511,833

Current year depreciation expense by function is as follows:

Instruction

Support Services

General Administration

$

Maintenance and Operation of Plant

Student Transportation Services

Food Services

$
9,482 7,799 59,619
$

590,338
76,900 27,203 694,441

NOTE 6: INTERFUND ASSETS AND LIABILITIES

Due to and due from other funds are recorded for interfund receivables and payables which arise from interfund transactions. Interfund balances at June 30, 2011, consisted of the following:

Due From Other Funds

Due To Other Funds

General Fund District-wide Capital Projects Debt Service Fund

$

629,401 $

4 5 8 ,7 4 6

4 5 8 ,7 4 6 6 2 9 ,4 0 1

$

1,088,147 $

1 ,0 8 8 ,1 4 7

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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2011

EXHIBIT "H"

Amounts due from the Debt Service Fund to the General Fund represent interest paid on outstanding bonds. Amounts due from the General Fund to the District-wide Capital Projects Fund represent monies deposited into the General Fund which more accurately represent revenues of the Districtwide Capital Projects Fund.
NOTE 7: INTERFUND TRANSFERS

Interfund transfers for the year ended June 30, 2011, consisted of the following:

Transfer to

Transfers From District-w id e C a pita l Projects

General Fund Debt Service Fund

$

2 7 ,6 7 0

2 ,1 3 5 ,4 9 2

Total

$

2 ,1 6 3 ,1 6 2

Transfers are used to (1) reimburse the General Fund for construction expenditures incurred, and (2) to move Special Purpose Local Option Sales Tax revenues collected by the District-wide Capital Projects Fund to the Debt Service Fund to pay principal and interest on bonds.
NOTE 8: RISK MANAGEMENT
The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; acts of God and unemployment compensation.
The School District has obtained commercial insurance for risk of loss associated with automobiles. The School District has neither significantly reduced coverage for this risk nor incurred losses (settlements) which exceeded the School District's insurance coverage in any 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.

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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2011

EXHIBIT "H"

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

Beginning of Year Liability

Claims and Changes in Estim ate s

C laim s Paid

End of Year Liability

2010

$

2011

$

0$ 0$

777 $ 41,101 $

777 $ 1,056 $

0 4 0 ,0 4 5

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 Safety National Casualty Company to provide coverage for potential losses sustained by the Trust in excess of $1,000,000 loss per occurrence, up to the statutory limit. Employers' Liability insurance coverage is also provided by Safety National Casualty Company with a loss fund percentage of 100%, based on the Fund's annual normal premium, up to a maximum limit of indemnity of aggregate limit of $2,000,000.

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

Position Covered

Amount

Superintendent Drivers Education All Em ployees

$

5 0 ,0 0 0

$

2 ,5 0 0

$

1 0 0 ,0 0 0

NOTE 9: 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 is to provide cash for operations until property tax collections are received by the School District. Article IX, Section V, Paragraph V of the Constitution 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 31 of the calendar year in which the debt was incurred.

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

B e gi n n i n g Balance

Issued

Redeemed

Ending Balance

Tax Anticipation Notes

$

0$

5,035,874 $

2,500,000 $

2,535,874

NOTE 10: 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.

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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2011

EXHIBIT "H"

INTERGOVERNMENTAL 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 Laurens County Public Facilities Authority issued $4,500,000 (less issuance costs of $83,500) 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.
GENERAL OBLIGATION DEBT OUTSTANDING

General Obligation Bonds currently outstanding are as follows:

Purpose

Interest Rates

Am ount

General Governm ent - Series 2007 General Governm ent - Series 2008 General Governm ent - Series 2010

2 .9 0 5 % 2 .4 0 8 % 3.0% - 4.0%

$

2 ,1 0 0 ,0 0 0

3 ,2 0 0 ,0 0 0

9 ,7 5 5 ,0 0 0

$

1 5 ,0 5 5 ,0 0 0

INTERGOVERNMENTAL CONTRACT

The debt at June 30, 2011, associated with this agreement was as follows:

Purpose

Interest Rate

Laurens County Public Facility Authority

3 .9 4 %

$

Am ount 4 ,5 0 0 ,0 0 0

Voters have authorized $7,995,000 in general obligation debt for various construction projects which was not issued as of June 30, 2011.

The changes in Long-Term Debt during the fiscal year ended June 30, 2011, were as follows:

Balance July 1, 2010

Additions

Governmental Funds

Balance

Deductions

June 30, 2011

Due Within One Year

G. O. Bonds

$

Capital Leases

Intergovernmental Contract

Bond Premiums Amortized

17,355,000 $ 122,105
4,500,000 290,699

0$

2,300,000 $ 62,343
24,566

15,055,000 $ 59,762
4,500,000 266,133

2,500,000 59,762
24,566

$ 22,267,804 $

0$

2,386,909 $ 19,880,895 $

2,584,328

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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2011

EXHIBIT "H"

At June 30, 2011, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30:

Capital Leases

Principal

Interest

Intergovernmental Contract

Principal

Interest

2012 2013 2014 2015 2016 2017 - 2021

$

59,762 $

2,994 $

$
500,000 700,000 1,000,000 2,300,000

177,300 177,300 177,300 157,600 130,020 137,900

Total Principal and Interest

$

59,762 $

2,994 $

4,500,000 $

957,420

Fiscal Year Ended June 30:

General Obligation Debt

Principal

Interest

Unamortized Bond Premium

2012 2013 2014 2015 2016 2017 - 2021

$

2,500,000 $

2,800,000

500,000

750,000

1,000,000

7,505,000

493,261 $ 428,091 355,200 340,200 317,700 904,500

24,566 24,566 24,566 24,566 24,566 143,303

Total Principal and Interest

$ 15,055,000 $

2,838,952 $

266,133

NOTE 11: ON-BEHALF PAYMENTS
The School District has recognized revenues and costs in the amount of $63,600 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-Certificated Personnel In the amount of $38,867

Paid to the Teachers' Retirement System of Georgia For Teachers' Retirement System (TRS) Employer's Cost In the amount of $14,252
Office of the State Treasurer Paid to the Public School Employees' Retirement System For Public School Employees' Retirement (PSERS) Employer's Cost In the amount of $10,481

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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2011

EXHIBIT "H"

NOTE 12: SIGNIFICANT COMMITMENTS

The following is an analysis of significant outstanding construction or renovation contracts executed by the School District as of June 30, 2011:

Project

Unearned Executed C o ntra cts

Dublin High School Track and Tennis

$

Saxon Elem entary School, Hillcrest Elem entary School

and Susie Dasher Elem entary School Renovations

6 3 8 ,1 4 0 1 ,2 4 8 ,2 1 0

$

1 ,8 8 6 ,3 5 0

The amounts described in this note are not reflected in the basic financial statements.
NOTE 13: SIGNIFICANT CONTINGENT LIABILITIES
Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any costs which are disallowed under grant terms. The School District believes that such disallowances, if any, will be immaterial to its overall financial position.
The School District is a defendant in various legal proceedings pertaining to matters incidental to the performance 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 14: SUBSEQUENT EVENTS
On December 8, 2011, the School District issued Series 2011 general obligation bonds in the amount of $4,085,000. The proceeds from these bonds will be used to partially refund the Series 2007 general obligation bonds. The bonds mature in years 2019 through 2023 and carry interest rates ranging from 2.5% to 4.0%.
On January 1, 2012, the School District issued a tax anticipation note for up to $6,000,000 in anticipation of property tax collections. This note carried an interest rate of 3.25% and matured on April 1, 2012. A total of $6,000,000 was drawn on this note, of which $3,000,000 was repaid on April 3, 2012. The note was converted to a commercial loan on April 16, 2012, for $3,050,917, which included unpaid interest. The new loan had a maturity date of December 31, 2012, and carried an interest rate of 6.5%. On August 13, 2012, the Board obtained a line of credit up to $6,000,000 which carries an interest rate of 6%. Proceeds were drawn to pay off the $3,050,917 commercial loan. The remaining balance is to be used for payroll in anticipation of November 2012 and December 2012 property tax receipts.
NOTE 15: POST-EMPLOYMENT BENEFITS
GEORGIA SCHOOL PERSONNEL 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 Benefit Plan administered by the Department of Community Health. The Official Code of Georgia Annotated (O.C.G.A.) assigns the

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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2011

EXHIBIT "H"

authority to establish and amend the benefit provisions of the group health plans, including benefits for retirees, to the Board of Community Health (Board). The Department of Community Health, which includes the School OPEB Fund, issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.
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, 2011:
For certificated teachers, librarians and regional educational service agencies:

July 2010 - April 2011 May 2011 - June 2011

21.955% of covered payroll for August - May Coverage 1.429% of covered payroll for June - July Coverage

For non-certificated school personnel:

July 2010 - December 2010 January 2011 - May 2011 June 2011

$162.72 per member per month $218.20 per member per month $246.20 per member per month

The Department of Education was appropriated an additional $25,081,633 for non-certificated personnel health insurance payments. The amount attributable to the School District is reflected in the On-behalf note disclosure.

No additional contribution was required by the Board for fiscal year 2011 nor contributed to the School OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the School 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:

Fiscal Year

Percentage C o ntrib ute d

Required C o ntrib utio n

2011 2010 2009

100% 100% 100%

$ 2,285,969 $ 2,087,957 $ 1,660,486

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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2011

EXHIBIT "H"

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.

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 30 years of creditable service, regardless of age, or after 10 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 40 years. Early retirement benefits are reduced by the lesser of one-twelfth of 7% for each month the member is below age 60 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 10 years of service. If a member terminates with less than 10 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, 2011, were 5.53% of annual salary. The member contribution rate will increase to 6.00% effective July 1, 2012. Employer contributions required for fiscal year 2011 were 10.28% of annual salary as required by the June 30, 2008, actuarial valuation. The employer contribution rate will increase to 11.41% effective July 1, 2012.

Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage C o ntrib ute d

Required C o ntrib utio n

2011 2010 2009

100% 100% 100%

$ 1,609,593 $ 1,569,706 $ 1,461,107

- 24 -

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2011

EXHIBIT "H"

PUBLIC SCHOOL EMPLOYEES' RETIREMENT SYSTEM (PSERS)
Bus drivers, lunchroom personnel, and maintenance and custodial personnel are members of the Public School Employees' Retirement System of Georgia. The System is funded by contributions by the employees and by the State of Georgia. The School District makes no contribution to this plan.

- 25 -

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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL
YEAR ENDED JUNE 30, 2011

SCHEDULE "1"

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Enterprise Operations Community Services Operations Food Services Operation Debt Services
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Operating Transfers From Other Funds
Net Change in Fund Balances
Fund Balances - Beginning
Adjustments
Fund Balances - Ending

NONAPPROPRIATED BUDGETS

ORIGINAL (1)

FINAL (1)

ACTUAL AMOUNTS

$

8,131,566 $

8,131,566 $

7,944,380

60,834

12,575,852

12,575,852

12,554,508

7,520,220

6,929,221

6,852,154

96,790

96,790

314,885

10,500

10,500

10,790

166,900

166,900

734,988

$

28,501,828 $

27,910,829 $

28,472,539

$

17,324,052 $

17,436,647 $

17,690,808

849,897 1,621,098
422,471 529,358 1,467,557 267,115 1,990,493 993,202 243,387 115,104
1,658,417

852,797 1,571,613
422,471 660,263 1,465,161 267,115 1,990,493 996,202 245,887 135,486
1,658,417

1,423,115 1,575,894
418,214 698,213 1,575,150 425,979 2,430,838 1,239,458 334,353 139,235
17,994 1,492
1,165,407 5,458

$

27,482,151 $

27,702,552 $

29,141,608

$

1,019,677 $

208,277 $

-669,069

$

1,019,677 $

-211,830

-230,606

208,277 $ -211,830
-29,851

27,670 -641,399 239,994

$

577,241 $

-33,404 $

-401,405

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

See notes to the basic financial statements.

- 27 -

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2011

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program
Total Child Nutrition Cluster
Other Programs Pass-Through From Georgia Department of Education Food Services Fresh Fruit and Vegetable Program
Total U. S. Department of Agriculture
Education, U. S. Department of Education of Homeless Children and Youth Cluster Pass-Through From Georgia Department of Education Education for Homeless Children and Youth
Educational Technology State Grants Cluster Pass-Through From Georgia Department of Education 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
Title I, Part A Cluster Pass-Through From Georgia Department of Education ARRA - Title I Grants to Local Educational Agencies Title I Grants to Local Educational Agencies
Total Title I, Part A Cluster
Other Programs Pass-Through From Georgia Department of Education Career and Technical Education - Basic Grants to States Education Jobs Fund Improving Teacher Quality State Grants Rural Education Twenty-First Century Community Learning Centers
Total Other Programs
Total U. S. Department of Education

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

EXPENDITURES IN PERIOD

10.553 10.555

N/A

N/A

$

$

(2) 1,641,577 (1)
1,641,577

10.582

N/A $

67,245 1,708,822

84.196

N/A

$

84.318

N/A

$

14,174 38,038

* 84.391 * 84.392 * 84.027 * 84.173

N/A

$

N/A

N/A

N/A

$

224,610 12,295
512,928 18,309
768,142

* 84.389 * 84.010

N/A

$

N/A

$

848,269 2,500,402
3,348,671

84.048 * 84.410 * 84.367
84.358 * 84.287

N/A

$

N/A

N/A

N/A

N/A

$

$

52,240 544,655 246,260 102,139 336,161
1,281,455
5,450,480

- 28 -

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2011

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT
Defense, U. S. Department of Direct Department of the Air Force J.R.O.T.C. Program
Total Expenditures of Federal Awards
N/A = Not Available

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

EXPENDITURES IN PERIOD

$

58,203

$

7,217,505

Notes to the Schedule of Expenditures of Federal Awards
(1) Includes the Federally assigned value of donated commodities for the Food Donation Program in the amount of $71,539.
(2) Expenditures for the funds earned on the School Breakfast Program ($426,665) were not maintained separately and are included in the 2011 National School Lunch Program.
Major Programs are identified by an asterisk (*) in front of the CFDA number.
The School District did not provide Federal Assistance to any Subrecipient.
The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the City of Dublin Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements.

See notes to the basic financial statements.

- 29 -

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2011

AGENCY/FUNDING
GRANTS Bright From the Start: Georgia Department of Early Care and Learning Pre-Kindergarten Program
Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades - Early Intervention (4-5) Program Middle Grades (6-8) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program 20 Days Additional Instruction Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Categorical Grants Pupil Transportation Regular Nursing Services Mid-term Adjustment Hold-Harmless Vocational Supervisors Education Equalization Funding Grant Food Services Vocational Education Amended Formula Adjustment Other State Programs Dual Enrollment Health Insurance Math and Science Supplements Preschool Handicapped Program Resident Treatment Centers State Bonds for Buses Teachers' Retirement Virtual Schools Grant
Office of State Treasurer Public School Employees' Retirement

See notes to the basic financial statements.

- 30 -

SCHEDULE "3"

GOVERNMENTAL FUND TYPE GENERAL FUND

$

738,585

959,952 135,002 2,266,559 137,173 1,165,123
-268 34,585 1,369,312 1,722,845 332,219 1,395,190 379,587 18,529 123,906 16,510 289,289 90,327 49,693
452,029 796,002 646,534
158,834 55,817
191,258 7,318
285,344 49,350
301,459 -1,892,469
6,481 38,867 16,054 35,171 81,266 76,292 14,252
50
10,481

$

12,554,508

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2011

SCHEDULE "4"

PROJECT
Acquiring, constructing, and equipping renovations and improvements to the Dublin Junior High School Auditorium, including partial demolition of Dublin Junior High School, renovations and additions at Dublin High School, the purchase of school buses, the installation of computer cabling on a system-wide basis and technology upgrades, the acquisition of certain property and equipment, including any heating and air conditioning equipment, which may be subject to lease by the Dublin School District, and additions, renovations, and improvements to Central Elementary School, Susie Dasher Elementary School, Saxon Heights Elementary School, Hillcrest Elementary School, Moore Street Elementary School, and Dublin Middle School.
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 Elementary School, and Saxon Heights Elementary School, purchase food service equipment, and acquire school buses and maintenance vehicles.
Acquisition of real property and construction, equipping and furnishing of new school 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 existing school buildings and facilities, including, but not limited to Moore Street Elementary, Susie Dasher Elementary, Saxon Heights Elementary, Dublin Middle School, and Hillcrest 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, school 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 ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT YEAR (3) (4)

AMOUNT EXPENDED IN PRIOR YEARS (3) (4)

PROJECT STATUS

$ 14,850,000 $ 12,973,018 $

62,756 $ 7,346,479 Ongoing

13,562,200 33,556,517

584,173

32,972,344 Completed

17,750,000 17,750,000

5,299,966

2,723,633 Ongoing

$ 46,162,200 $ 64,279,535 $ 5,946,895 $ 43,042,456

- 31 -

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2011

(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 Laurens County 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

$ 894,477

Current Year

709,201

Total

$ 1,603,678

SCHEDULE "4"

See notes to the basic financial statements.

- 32 -

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2011

SCHEDULE "5"

DESCRIPTION
Direct Instructional Programs Kindergarten Program Kindergarten Program-Early Intervention Program Primary Grades (1-3) Program Primary Grades-Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades-Early Intervention (4-5) Program Middle Grades (6-8) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Category II Category III Category IV Category V Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL)
TOTAL DIRECT INSTRUCTIONAL PROGRAMS
Media Center Program Staff and Professional Development
TOTAL QBE FORMULA FUNDS

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

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

$

1,147,232 $ 1,140,117 $

169,067

121,196

2,645,165

2,544,326

161,983

77,336

1,357,765

859,185

20,201 37,675 1,670,002 1,944,762 407,421 1,689,496
459,688 47,009
151,226 19,908

150,674
1,613,053 2,009,259
422,484
26,988 183,060 472,963 151,158 758,545 269,692
41,242 241,928
63

$

11,928,600 $ 11,083,269 $

349,358 59,758

402,962 219

1,697 $
38,798 900
12,205
298 25,237 38,122 174,829 27,395
-1,124
5,652
313 13,781
952
339,055 $
13,631 12,306

1,141,814 121,196
2,583,124 78,236
871,390
150,972 25,237
1,651,175 2,184,088
449,879
25,864 183,060 478,615 151,158 758,858 283,473
41,242 242,880
63
11,422,324
416,593 12,525

$

12,337,716 $ 11,486,450 $

364,992 $

11,851,442

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

See notes to the basic financial statements.

- 33 -

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

Greg S. Griffin
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
October 3, 2012

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, 2011, which collectively comprise City of Dublin Board of Education's basic financial statements and have issued our report thereon dated October 3, 2012. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
Management of City of Dublin Board of Education is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered City of Dublin Board of Education's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose 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.

2011YB-42

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 weakness is 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-7741-11-01, FS-7741-11-02, FS-7741-11-03, and FS-7741-11-04 to be material weaknesses.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether City of Dublin Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions 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 3, 2012.
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,

GSG:as 2011YB-42

Greg S. Griffin State Auditor

Greg S. Griffin
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
October 3, 2012

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 COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133
Ladies and Gentlemen:
Compliance
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, 2011. 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 of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types 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.
In our opinion, 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, 2011.

2011SA-10

Internal Control Over Compliance
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 OMB 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.
A deficiency in internal control over compliance 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 control 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.
Our consideration of internal control over compliance 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 compliance that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above.
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,

GSG:as 2011SA-10

Greg S. Griffin State Auditor

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

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2011

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER

AUDITEE'S RESPONSE/STATUS

SEE AUDITOR'S COMMENTS

FS-7741-09-01

Further Action Not Warranted

FS-7741-09-02

Further Action Not Warranted

FS-7741-09-03

Further Action Not Warranted

FS-7741-09-04

Further Action Not Warranted

FS-7741-10-01

Partially Resolved - See Corrective Action/Responses

FS-7741-10-02

Partially Resolved - See Corrective Action/Responses

FS-7741-10-03

Further Action Not Warranted

(1)

FS-7741-10-04

Unresolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

FINANCIAL REPORTING Inadequate Controls over Financial Reporting Finding Control Number: FS-7741-10-01

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/LIABILITIES/DISBURSEMENTS EMPLOYEE COMPENSATION REVENUES/RECEIVABLES/RECEIPTS GENERAL LEDGER Inadequate Internal Controls at the Central Office Finding Control Number: FS-7741-10-02

The Board will establish, revise and/or monitor procedures to ensure that bank accounts are properly reconciled to the general ledger and that the Inter-fund 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.

CAPITAL ASSETS Failure to Adequately Maintain Capital Assets Finding Control Number: FS-7741-10-04

The School District 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.

- 1 -

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2011

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
AUDITOR'S COMMENTS
(1) This deficiency was materially resolved in fiscal year 2011. The remaining unresolved discrepancies do not require reporting in the audit report in accordance with Statements on Auditing Standards (SAS) 112 or Governmental Auditing Standards (Yellow Book) will be communicated in a management letter.

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER

AUDITEE'S RESPONSE/STATUS

SEE AUDITOR'S COMMENTS

FA-7741-08-01

Further Action Not Warranted

FA-7741-08-02

Unresolved - See Corrective Action/Responses

FA-7741-09-01

Partially Resolved - See Corrective Action/Responses

(2)

FA-7741-09-02

Unresolved - See Corrective Action/Responses

(2)

FA-7741-09-03

Previously Reported Corrective Action Implemented

FA-7741-10-01

Unresolved - See Corrective Action/Responses

(2)

FA-7741-10-02

Unresolved - See Corrective Action/Responses

FA-7741-10-03

Previously Reported Corrective Action Implemented

CORRECTIVE ACTION/RESPONSES

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) Questioned Cost: $10,660.02 Finding Control Number: FA-7741-08-02

Management will review control procedures in place and implement procedures to ensure that Child Nutrition Cluster Funds are transferred in a timely manner. The School District will transfer $10,660.02 to the Child Nutrition Program from the General Fund.

- 2 -

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2011
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
CORRECTIVE ACTION/RESPONSES
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) Questioned Cost: $520.00 (CFDA 84.027 and 84.173) Finding Control Number: FA-7741-09-01
Management 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. The School District will contact the Georgia Department of Education to determine if a refund is appropriate.
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) Questioned Cost: $33,971.67 (CFDA 84.010), $33,971.67 (CFDA 84.027, 84.173) Finding Control Number: FA-7741-09-02
The School District will contact the Georgia Department of Education to determine if a refund is appropriate.
ALLOWABLE COSTS/COST PRINCIPLES PERIOD OF AVAILABILITY OF FEDERAL FUNDS Inadequate Internal Control Procedures U. S. Department of Education Through Georgia Department of Education Special Education Cluster (CFDA 84.027, 84.173, 84.391, 84.392) Title I, Part A Cluster (CFDA 84.010, 84.389) Improving Teacher Quality State Grants (CFDA 84.367) Questioned Cost: $3,051.97 (CFDA 84.367), $947.00 (CFDA 84.027) Finding Control Number: FA-7741-10-01
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. The School District will contact the Georgia Department of Education to determine if a refund is appropriate.
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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2011
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS CORRECTIVE ACTION/RESPONSES 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) Questioned Cost: $667.02 Finding Control Number: FA-7741-10-02 Management will review control procedures in place and implement procedures to ensure that Child Nutrition Cluster Funds are transferred in a timely manner. The School District will transfer $667.02 to the Child Nutrition Program from the General Fund. AUDITOR'S COMMENTS (2) This finding is pending review by the Georgia Department of Education to determine if a refund is appropriate.
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SECTION IV FINDINGS AND QUESTIONED COSTS

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2011

I SUMMARY OF AUDITOR'S RESULTS

Financial Statements

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

Unqualified

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

Yes None Reported

Noncompliance material to financial statements noted:

No

Federal Awards

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

No None Reported

Type of auditor's report issued on compliance for major programs: All major programs
Any audit findings disclosed that are required to be reported in accordance with OMB Circular A-133, Section 510(a)?

Unqualified No

Identification of major programs:

CFDA Numbers

Name of Federal Program or Cluster

84.010, 84.389 84.027, 84.173, 84.391, 84.392 84.410 84.287 84.367

Title I, Part A Cluster Special Education Cluster Education Jobs Fund Twenty-First Century Community Learning Centers Improving Teacher Quality State Grants

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

$300,000

Auditee qualified as low-risk auditee?

No

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINANCIAL REPORTING Inadequate Controls over Financial Reporting Material Weakness Finding Control Number: FS-7741-11-01

Condition: This is a repeat finding (FS-7741-10-01, FS-7741-09-01 and FS 7741-08-01) from the years ended June 30, 2010, June 30, 2009, and June 30, 2008, respectively. The School District did not have adequate controls in place over the financial statement reporting process.

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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2011
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
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 forth in Official Code of Georgia Annotated (O.C.G.A.) 48-8-122.
Questioned Cost: N/A
Information: During the 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, Accounts Receivable, Capital Assets, Accounts Payable, Deferred Revenue, Salary and Benefits Payable, State Revenues, Federal Revenues and Property Tax Revenues.
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.
Numerous reclassification entries were made to improve financial statement presentation of Accounts Receivable, Accounts Payable, Short-Term Debt Liability, Long-Term Liabilities, State Revenues, Federal Revenues, Charges for Services, Revenues, Miscellaneous Revenues and Fund Balance.
The School District's SPLOST schedule as submitted to the Georgia Department of Audits and Accounts was inaccurate.
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.
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. 48-8-122.
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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2011
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS EXPENDITURES/LIABILITIES/DISBURSEMENTS EMPLOYEE COMPENSATION REVENUES/RECEIVABLES/RECEIPTS GENERAL LEDGER Inadequate Internal Controls at the Central Office Material Weakness Finding Control Number: FS-7741-11-02
Condition: This is a repeat finding (FS-7741-10-02, FS-7741-09-02 and FS-7741-08-02) from the years ended June 30, 2010, June 30, 2009, and June 30, 2008, respectively. The accounting procedures of the School District were insufficient to provide for adequate internal controls at the Central Office.
Criteria: The School District's management is responsible for designing and maintaining internal controls that provide reasonable assurance that transactions are processed according to established procedures.
Questioned Cost: N/A
Information: Cash and Cash Equivalents
Several bank accounts were not properly reconciled to the general ledger. Reconciling items were not investigated and adjusted timely. The School District's general ledger reflected an overall balance in the Interfund Cash
account of $57,264. This amount should always carry an overall balance of zero. The School District failed to perform a monthly reconciliation for several bank accounts
throughout the year. Management failed to document their review and approval of the bank reconciliations.
Auditor was unable to determine if accounts were reconciled in a timely manner. Petty cash had a negative cash balance of $2,121.
Expenditures/Liabilities/Disbursements A review of voucher packages revealed the following deficiencies: Several voucher packages were missing adequate documentation or proper approval. Several voucher packages were charged to the wrong account codes and/or improper period.
A review of credit card transactions revealed the following deficiencies: Several credit card transactions were missing adequate documentation and proper approval. Certain credit card transactions were determined to be in violation of state travel regulations. The School District incurred late fees for failure to make timely payments on credit cards.
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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2011
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
Employee Compensation No subsidiary listing of Salary and Benefits Payable was provided. The portion of the Salaries and Benefits Payable account balance related to the School Nutrition Program contained invalid prior years' accruals that were never reversed when the salaries were paid.
Revenues/Receivables/Receipts No subsidiary listing of Accounts Receivable was provided.
General Ledger The Capital Projects Funds were not adequately maintained by funding source or project.
A review of journal entries revealed the following deficiencies: Journal entries were not reviewed by someone independent of the general ledger posting function. Numerous journal entries did not have sufficient supporting documentation. Due to this lack of documentation, several journal 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, including credit card transactions and implement controls to ensure that expenditures are properly documented, approved and recorded correctly. Subsidiary listings should be available for Accounts Receivable and Salaries and Benefits Payable. Also, the School District should establish sufficient internal control procedures to require that all journal entries are documented and approved prior to posting.
CAPITAL ASSETS Failure to Adequately Maintain Capital Assets Material Weakness Finding Control Number: FS-7741-11-03
Condition: This is a repeat finding (FS-7741-10-04 and FS-7741-09-04) from the years ended June 30, 2010, and June 30, 2009, respectively. The School District did not adequately maintain capital assets inventory records.
Criteria: Chapter 37 Implementing a Capital Assets 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.
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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2011
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
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 Intangible Assets.
The subsidiary ledger did not agree to the financial statements.
Construction in Progress additions were not calculated properly. An audit entry was proposed and accepted by the client for the governmental activities financial statements.
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 Capital Assets Management System of the Financial Management for Georgia Local Units of Administration.
Effect: The failure of the School District to 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.
BUDGET PREPARATION/EXECUTION Deficit Fund Balance Material Weakness Finding Control Number: FS-7741-11-04
Condition: At June 30, 2011, the General Fund of the City of Dublin Board of Education reported a deficit fund balance. In addition, the School District failed to adopt a balanced budget for the General Fund.
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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2011
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
Criteria: Chapter 25, Governmental Fund Deficits of the Financial Management for Georgia Local Units of Administration states in part: "The seriousness of fund balance deficits cannot be overstated. The Georgia Department of Education requires those LUAs with deficit governmental fund balances to meet certain reporting requirements." Chapter 32, Preparing Operating Budgets, of the Financial Management for Georgia Local Units of Administration states (FMGLUA) states in part: "The budget must be balanced for all budgeted funds. Total anticipated revenues should equal total estimated expenditures. In the event anticipated revenues are insufficient to fund anticipated essential expenditures, a portion of unreserved fund balance from the previous years must be used to fund the shortfall. In the event there is insufficient unreserved fund balance from previous years to fund anticipated expenditures, then such expenditures must be reduced to equal anticipated revenues plus available unreserved fund balance".
Questioned Cost: N/A
Information: The School District's General Fund reported a deficit fund balance of $1,062,928.
Cause: The School District's General Fund incurred expenditures in excess of revenues during the year under review. In addition, management failed to use effective budgeting techniques and continued charging expenditures to State and Federal programs after the award amounts had been depleted. Management also approved a final budget for the General Fund that budgeted a deficit fund balance in the amount of $33,904.
Effect: A financial statement irregularity in accordance with the Official Code of Georgia Annotated (O.C.G.A.) 20-2-67.
Recommendation: The School District should establish policies and procedures designed to ensure that expenditures do not exceed available resources, so that in future periods the School District does not incur a deficit fund balance. In addition, appropriate procedures should be implemented to ensure that the adopted budget for each budgeted fund is balanced as required.
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CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2011
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
SPECIAL TESTS AND PROVISIONS Failure to Transfer Funds Timely Nonmaterial Noncompliance U. S. Department of Agriculture Through Georgia Department of Education Food Services School Breakfast Program (CFDA 10.553) Food Services National School Lunch Program (CFDA 10.555) Finding Control Number: FA-7741-11-01
Condition: This is a repeat finding (FA-7741-10-02, FA-7741-09-03 and FA-7741-08-02) from the years ended June 30, 2010, June 30, 2009, and June 30, 2008, 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: N/A
Information: Two months of receipts reviewed were not transferred to the School Food Service account in a timely manner.
Cause: The School District failed to implement appropriate procedures to ensure compliance in accordance with Federal guidelines.
Effect: Failure to ensure appropriate transfers 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.
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SECTION V MANAGEMENT'S RESPONSES

CITY OF DUBLIN BOARD OF EDUCATION - LAURENS COUNTY SCHEDULE OF MANAGEMENT'S RESPONSES YEAR ENDED JUNE 30, 2011

Finding Control Number: FS-7741-11-01

We concur with this finding. The Board will develop and implement internal controls over financial statement reporting and ensure that activity is properly recorded in the general ledger. We will verify that financial statements (including note disclosures) properly reflect the activity reported in the general ledger and that the financial information presented for audit will be accurate. The Board hired a new Director of Finance in July 2012 and anticipates immediate implementation and improvement in FY13.

Finding Control Number: FS-7741-11-02

We concur with this finding. The Board has implemented procedures to reconcile all bank accounts on a monthly basis to the general ledger and to have documented management review and approval. The Interfund Cash account is also being reconciled on a monthly basis to maintain an overall zero balance. Additionally, all journal entries are properly documented, reviewed and approved by management. State travel regulations are being followed with credit card usage being controlled as well as being paid on a timely basis.

Finding Control Number: FS-7741-11-03

We concur with this finding. The Board will review its capital assets activity and ensure that activity conforms to the approved capital assets policy and generally accepted accounting principles. A physical inventory of capital assets will be performed in FY13.

Finding Control Number: FS-7741-11-04

We concur with this finding. The Board has implemented a three year plan to reduce our negative fund balance, which includes staff reductions and reduction in days for staff. Properly tax revenue is anticipated to increase during this three year period as property is re-assessed and taxes are levied accordingly.

Finding Control Number: FA-7741-11-01

We concur with this finding. The Board has implemented a procedure to transfer School Food Service USDA funds promptly in compliance with Federal guidelines.

Contact Person: Telephone: Fax: Email:

Christi Schien, Director of Finance (478) 277-4017 (478) 272-1249 Christi.schien@dublincityschools.us