Audit report, City of Gainesville Board of Education, Hall County, Georgia, year ended June 30, 1999

AUDIT REPORT CITY OF GAINESVILLE BOARD OF EDUCAnON
HALL COUNTY, GEORGIA YEAR ENDED JUNE 30,1999

CITY OF GAINESVILLE BOARD OF EDUCATION - HALL COUNTY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATlONSCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

EXHIBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUPS

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDTIURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

6

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

7

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

20

F

COMBINING STATEMENT OF REVENUES, EXPENDTIURES

AND CHANGES IN FUND BALANCES

22

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

24

H

COMBINING STATEMENT OF REVENUES, EXPENDTIURES

AND CHANGES IN FUND BALANCES

26

DEBT SERVICE FUND

COMBINING BALANCE SHEET

28

COMBINING STATEMENT OF REVENUES, EXPENDTIURES

AND CHANGES IN FUND BALANCES

29

K

FIDUCIARY FUND TYPE

COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

AGENCY FUNDS

30

SCHEDULES

I SCHEDULE OF EXPENDTIURES OF FEDERAL AWARDS

31

2 SCHEDULE OF STATE REVENUE

33

CITY OF GAINESVILLE BOARD OF EDUCATION - HALL COUNTY - TABLE OF CONTENTS _

SECTION I

FINANCIAL

SCHEDULES

ADDITIONAL FINANCIAL INFORMATION

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

34

4 SCHEDULE OF EXPENDITURES

LOTTERY PROGRAMS

35

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

5

OVERALL

37

6

BY PROGRAM

38

SECTIONll
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133

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

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

SECTION I FINANCIAL

RUSSELL \\'. "INTO)'\; STATE AUDITOR (4041 E562174

DEPARTMENT OF AUDITS AND ACCOUNTS
25cl Washington Street. S.\V., Suite 214 Atlanta. Georgia ~()334-X4(J(j
June 2, 2000

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Gainesville Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATIONSCHEDULE OF EXPENDmJRES OF FEDERAL AWARPS
Ladies and Gentlemen:
We have audited the accompanying general purpose financial statements of the City of Gainesville Board of Education, as of and for the year ended June 30, 1999, as listed in the table of contents. These general purpose financial statements are the responsibility of the City of Gainesville Board of Education's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards 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 examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall fmancial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in the notes to the general purpose financial statements, the Board's financial statements have been prepared using a certain accounting practice and policy which, in our opinion, varies in some respects from generally accepted accounting principles. This variance is described as follows:
* School activity accounts are included in the general purpose financial statements as agency funds.
To conform to generally accepted accounting principles, the activity of these accounts should be included in the general purpose financial statements in the appropriate fund and fund type.
99ARL-13

The aggregate effects on the general purpose financial statements of this variance or omission have not been determined, but are believed to be material.
In our opinion, except for the effects on the general purpose financial statements of the matter referred to in the preceding paragraph, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the City of Gainesville Board of Education as of June 30,1999, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated June 2, 2000, on our consideration of the City of Gainesville Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants.
Our audit was performed for the purpose of forming an opinion on the general purpose financial statements ofthe City of Gainesville Board of Education taken as a whole. The accompanying combining statements (Exhibits E through K) and the financial schedules (Schedules I through 6), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-l33, Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the general purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and in our opinion, except for the effects of the matter referred to in the third paragraph, such information is fairly presented in all material respects in relation to the general purpose financial statements taken 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 ofthe State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,
RWH:jb 99ARL-l3

CITY OF GAINESVILLE BOARD OF EDUCATION - HALL CillJNfY

CITY OF GAINESVILLE BOARD OF EDUCATION _HALL COUNTY COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUPS JUNE 30 1999

Cash and Cash Equivalents
Investments
Accounts Receivable
Inventories Food DOnated Commodities Purchased Food
General Fixed Assets Land Buildings Equipment
Amount Available in Debt Service Fund
Amount to be Provided in Future Years For Payment of: Bond Debt Long.Term Debt Agreement Capital Lease Agreements
Total Assets
LIABILITIES AND FUND EQUITY
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retainages Payable Deferred Revenue Funds Held for Others Capital Lease Agreements Long-Tenn Debt Account Group General Obligation Bonds Payable
Total Liabilities
Investment in General Fixed Assets Fund Balances
Reserved For Debt Service For Inventories Food Donated Commodities Purchased Food For Theater Fund For United Way Homeless Grant For Purpose of Bond Issue For State Capital Outlay Projects
Unreserved Designated For Self Insurance Deficit Undesignated
Total Fund Equity
Total Liabilities and Fund Equity
The notes to the general purpose financial statements are an integral part of this statement.
-2 -

GENERAL FUND
1,167,154.24
3,652,537.36

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

247,091.22

519,367.58

10,196,188.17

435,607.17

22,103.14 10,962.05

s 4819691.60

s 715763.58

10715555.75

724,354.30 2,339,394.61
323.62
3,796.23

148,193.87 215,396.19
14,237.87

260,057.11

3067868.76 S

377 827.93 $

260057.11

4,564.33 8,690.93
19,063.81 1719503.77 1751822.84

22,103.14 10,962.05

10,299,866.24 36,249.00

304870.46 337935.65

119383.40 10 455 498.64

4819691.60 S

715763.58 $ 10715555.75

EXHIBIT A~

DEBT SERVICE
FUND
1,490,180.45

FIDUCIARY FUND TYPES AGENCY FUNDS
178.005.96

ACCOUNT GROUPS

GENERAL

GENERAL

FIXED

LONG-TERM

ASSETS

DEBT

603,960.25

TOTALS

(Memorandum Only)

JUNE 30. 1999

JUNE 30 1998

3,601,799.45

1,747,002.11

10,196,168,17

16,234,393.89

4,692,104.78

3,363.010,55

194,840,76 27,181,464.06
7,034,368.87

2,094,140.70

22,103.14 10,962.05
194,840.76 27,181,464.06
7,034,368.87
2,094,140.70

16,925.22 8,829,72
194,840.76 24,303,076.08
6,639,578.68
1,029,685.39

10.265,859.30 11,640,181.00
638016.23

10,265,659.30 11,840,181.00
838016.23

13,160,314.61 12,823,757.00
991 793.55

s 2094140.70

s s s 178005.96

34410 673.69

25038197.23

77 972 028.51 $ 80513207.56

178,005.96 178005.96

838,016.23 11.640,181.00 12360000.00
25038197.23

872,546.17 2,554,790.80
14,561.49
260,057.11 3,796.23
178,005.96 838,016.23 11,840,181.00 12360000.00
28921 956.99

2,597.60 709,927.92 2.258,460.70
3,423.00 177,471.70
31,010.60 3,796.23
158,806.80 991,793.55 12,823,757.00 14 190 000.00
31351 045.10

2,094,140.10

34,410,673,69

0,00 2094140.70

0.00 34 410 673.69

34,410,673.69
2,094,140.70
22,103.14 10,962.05
4,564.33 6,690.93 10,299,666.24 36,249.00
19,063.61 2143757.63 49050071.52

31,137,495.52
1,425,484,10
16,925.22 6,629.72 4,564.33
14,032,763.69
-395,798,71 2931698.59 49162162.46

209414070 $

178005.96 $ 34 410 673.69 $ 25038 197.23 $

77 972 028.51 $ 80 513207.56

-3-

CITY OF GAINESVILLE BOARD OF EDUCATION _ HALL COUNTY COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30 1999

State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction SupportServices Pupil Services Improvement of Instructional Services Educational Media Services GeneralAdministration School Administration Business Administration Maintenanceand Operationof Plant StudentTransportation Services CentralSupportServices Other Support Services Food Services Operation
Capital Outlay Debt Service
Principal Interest Paying Agent Fees
Total Expenditures
Excessof Revenuesover (under)Expenditures
OTHER FINANCING SOURCES (USES)
Accrued Intereston Bonds Sold Premiums on BondsSold Proceedsfrom General Obligation Bonds
Par Value OperatingTransfers In Operating TransfersOut
Total Other Financing Sources(Uses)
Excessof Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
Food Inventory- Net Change in Period Donated Commodities PurchasedFood

GENERAL FUND

SPECIAL REVENUE
FUND

11,172,202.58
12,893,638.83 745,866.38
24,811,707.79

294,462.69 2,717,140.36
420,272.08
3,431,875.13

s 16,947,047.92
1,146,675.96 1,112,305.10
487,861.12 542,091.51 1,432,513.96 353,102.58 1,861,407.39 1,169,387.48 66,710.63
57,563.10 282,540.49
82,270.30 83,366.25
$ 25,624,943.79
-813,236.00

1,243,547.42 397,584.06 206,863.44 3,793.01
30,809.16 25,755_94 199,418.53 1,157,674.66 41,627,60
3,307,073.82 124,801.31

-210.447.82 -210,447.82
-1,023,683.82 2,775,506.66

24,132.29
24,132.29
148,933,60 181,691,80
5,177,92 2,132.33

FUND BALANCE JUNE 30

$ 1,751,822.84

The notesto the general purposefinancial statementsare an integral partof thisstatement. -4-

337,935.65

EXHIBIT "B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 1999

JUNE 30, 1998

643769.82 643,769.82

3,701,947.08 36,031.58
3,737978.66

11,466,665.27 2,717,140.36 16,595,585.91 1,845,939.86
32,625331.40

11,155,660.55 2,019,992.53 14,339,671.02 1,388,098.26
28,903 422.36

318.32
3,638,367.45 71,507.02 444.51
$ 3,710,637.30 -3,066.867.48

2,813,576.00 555,735.00 5,944.85
3,375,255.85
362,722.81

18,190,595.34
1,544,260.02 1,319,168.54
487,861.12 545,884.52 1,432,513.96 353,420.90 1,861,407.39 1,200,196.64
92,466.57 199,418.53 1,215,237.76 3,962,635.54
2,967,353,32 639,545.76 5,944.85
36,017,910.76
-3,392,579.36

16,327,516.95
1,136,340.36 1,195,879.16
491,851.05 509,117.66 1,287,384.23 321,099.46 1,581,546.47 1,007,287.24 83,888.21 254,911.76 1,119,111.39 1,020,041.83
1,132,740,03 456,174.05 2,031.89
27,926,921.74
976,500,62

-515,416.97 -515,416.97
-3,582,284.45 14,037,783.09

701,732,50 701,732.50 1,064,455,31 1,029,685.39

725,884.79 -725,864.79
0.00
-3,392,579,36 18,024,666.94
5,177.92 2,132.33

13,366.33 1,091.00
14,190,000.00 183,086,89 -183,086.89
14,204,457.33
15,180,957,95 2,851,486,31
-5,525.21 -2,252.11

10,455,498.64 $ 2,094,140.70

14,639,397.83

18,024,666.94

-5-

CITY OF GAINESVILLE BOARD OF EDUCATION - HALL COUNTY COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30 1999

EXHIBIT "C

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction SupportServices Pupil Services Improvementof Instructional Services Educational MediaServices General Administration SchoolAdministration Business Administration Maintenanceand Operationof Plant StudentTransportation Services Central SupportServices Other SupportServices Food Services Operation
Capital Outlay Debt Service
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Other Sources Other Uses
TotalOtherFinancing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expendituresand Other Financing Uses
FUND BALANCE JULY 1 1998
Adjustments Food Inventory- Net Change in Period
Donated Commodities Purchased Food

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

10,640,893.00
11,888,480.00 344,500.00
22,873,873.00

11,172,202,58
12,893,638.83 745,866.38
24,811,707.79

16,794,186.00
1,182,092.00 1,089,363.00
498,745,00 552,478.00 1,317,447.00 283.845.00 1,847,469.00 1.058,908.00
62,150.00
72,861.00 259.252.00
25.018,796.00
-2,144,923.00

16,947,047,92
1,146,675.96 1,112.305.10
487,861.12 542,091.51 1,432,513.96 353,102,58 1,861,407,39 1,169,387.48
66,710.63
57,563.10 282,640.49 165,636.56
25,624.943,79
-813.236.00

-222,563.00 -222,563.00

-210,447.82 210,447.82

-2,367,486.00 3.021,316,72

-1,023,683,82 2,775,506.66

FUND BALANCE JUNE 30 1999

653,830.72 $ 1,751,822.84

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

261,924.00 2,273,018.28
205,000.00
2,739,942.28

294,462,69 2,717,140.36
420,272.08
3,431,875.13

1,126,084.00
375.724.00 164,756.28
10,399.00

1,243.547.42
397,584.06 206,863.44
3,793,01

34,255.00 45,528.00 77.229.00 937.782.00

30,809.16 25.755.94 199,418,53 1,157,674,66 41,627.60

2,771,757.28 $ 3.307,073.82

$

-31.815.00

124,801.31

31,815,00 $

24,132.29

31.815.00

24,132,29

$

0,00 $

148.933.60

159,080.02

181,691.80

7,412.40

5,177.92 2.132.33

166,492,42 $

337,935.65

The notesto the general purposefinancialstatementsare an integralpartof this statement. -6-

CITY OF GAINESVILLE BOARD OF EDUCATION - HALL COUNTY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30 1999
Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The City of GainesviUe Board of Education (Board) 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 Board is a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The Board uses funds and account groups 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. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
School activity accounts used to record the operations of the individual schools are included in the general purpose financial statements as agency funds. To conform to generally accepted accounting principles, the financial activity of these accounts, should be recorded in the general purpose financial statements by appropriate fund and fund type.
The general purpose financial statements account for all State, Federal, Taxes and Other funds under control of the Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account groups presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most of a Board's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
-7-

CITY OF GAINESVILLE BOARD OF EOUCATION - HALL COUNTY EXHIBIT "0" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30 1999
Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DEBT SERVICE FUND - the fund used to account for the accumulation of resources for, and the payment of, general long-term principal, interest and paying agent fees.
FIDUCIARY FUND TYPES - the funds used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds. These funds include:
AGENCY FUNDS - the funds used to account for assets held in a fiduciary capacity for other funds, governments, or individuals.
ACCOUNT GROUPS
GENERAL FIXED ASSETS ACCOUNT GROUP - A financial reporting device used to account for all general fixed assets acquired or constructed for use by the Board.
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding and capital lease obligations.
BASIS OF ACCOUNTING
The accounting and fmancial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current fmancial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
Agency funds are purely custodial in nature and do not involve measurement of results of operations.
Governmental funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Those revenues considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income.
Expenditures are generally recognized when the related fund liability is incurred.
-8-

CITY OF GAINESVILLE BOARD OF EDUCATION - HALL COUNTY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30 1999
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A substantial number of personnel of the Board were employed for a one hundred and ninety day period beginning in late August of 1998 and ending in early June 1999. Employment contracts for these employment periods typically specify that compensation be paid in twelve equal monthly payments beginning in September 1998 and ending in August 1999. State grants to fund the State's share of these contracts are disbursed to the Board in the same twelve month period. In accordance with generally accepted accounting principles, salary and fringe benefit expenditures and the related revenue from the State to fund these contracts are recorded in the fiscal period covered by these financial statements.
Agency funds are accounted for using the modified accrual basis of accounting in recognizing assets and liabilities.
BUDGET
The City of Gainesville Board of Education's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized fmancial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Board in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. Both participating
- 9-

CITY OF GAINESVILLE BOARD OF EDUCATION HALL COUNTY EXHIDIT "D" NOTES TO THE GENERAL PI JRPOSE FINANCIAL STATEMENTS
JUNE 30 1999
Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 Board 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:
(I) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions ofthe State of Georgia.
RECEIVABLES
Receivables consist of 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 general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
PROPERTY TAXES
The City of Gainesville Board of Commissioners fixed the property tax levy for the 1998 tax year (calendar year) on June 18, 1998 (levy date). Taxes were due on January II, 1999. The lien date for property taxes was January 1, 1998. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1999. The Gainesville City Clerk bills and collects the property taxes for the Board of Education, withholds I % of taxes collected as a fee for tax collection and remits the balance of taxes collected to the Board.
-10 -

CITY OF GAINESVILLE BOARD OF EDUCATION - HALL COUNTY EXHIDIT "D" NOTES TO THE GENERAL Pl JRPOSE FINANCIAL STATEMENTS
JUNE 30 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Tax millage rates levied for the 1998 tax year (calendar year) for the City of Gainesville Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations School Bonds
SALES TAXES

6.27 mills
~mills
6.62 mills

Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $2,911,603.42 and was recorded in the Debt Service Fund. The State will terminate collection ofthis tax once an additional $15,516,133.63 has been collected or on September 30, 2002, whichever occurs first.

INVENTORIES

FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time of purchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.

GENERAL FIXED ASSETS

General fixed assets purchased, including capital outlay costs, are recorded as expenditures in the various funds at the time of purchase. All purchased general fixed assets are valued at cost where historical records are available and at estimated historical cost where no historical records exist. Donated general fixed assets are recorded at fair market value on the date donated. Disposals are deleted at recorded cost. No depreciation has been provided on General Fixed Assets. 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. Infrastructure assets are not capitalized by the Board.

LONG-TERM DEBT AGREEMENT

Prior to January 1, 1994, the City of Gainesville Board of Education was a component unit of the City of Gainesville, Georgia and was thereby not authorized to issue debt. Accordingly, the City of Gainesville, Georgia issued General Obligation Bonds to provide funds for the acquisition and construction of major school facilities. The general obligation bonds issued during this time are direct obligations and pledge the

- 11 -

CITY OF GAINESVILLE BOARD OF EDUCATION - HALL COUNTY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30 1999
Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
full faith and credit of the City of Gainesville. However, the City of Gainesville Board of Education is required by House Bill 841 of the 1993 Session of the General Assembly to levy taxes for remittance to the City of Gainesville, Georgia in the amounts necessary to retire this outstanding debt.
GENERAL OBLIGATION BONDS
The Board issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group.
INTERFUND TRANSACTIONS
The Board has the following types of interfund transactions:
Reimbursements of expenditures initially made from a fund that are properly applicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
Operating transfers are recorded for all interfund transactions other than reimbursements.
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results of operations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. Certain reclassifications have been made to the comparative data to conform to the current year classifications.
DEFICIT FUND BALANCES
The Debt Service Fund reported a deficit fund position at June 30, 1999 in the amount of$189,866.50. In the subsequent period, the deficit will be eliminated by receipt of School Bond Tax funds.
Note 2: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum 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
- 12 -

CITY OF GAINESVILLE BOARD OF EDUCATION - HALL COUNTY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30 1999
Note 2: DEPOSITS AND INVESTMENTS
and the market value of securities pledged shall be equal to not less than II 0 percent ofthe public funds being secured after the deduction of the amount of deposit insurance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of anyone of or any combination of the following:
(l) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute
that created the authority authorized the use of the bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS At June 30, 1999, the bank balances were $5,064,195.56. The amounts of the total bank balances are classified into three categories of credit risk:
Category I - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the Board or by the Board's agent in the Board's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Board's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Board's name.)
- 13 -

CITY OF GAINESVILLE BOARD OF EDUCATION - HALL COUNTY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30 1999

Note 2: DEPOSITS AND IJ\TVESTMENTS

The Board's deposits are classified by risk category at June 30, 1999, as follows:
Risk Category
I 2 3
Total
CATEGORIZATION OF INVESTMENTS Investments are classified as to risk by the three categories described below:

Bank Balance
s 738,681.00
4,325,514.56 0.00
$ 5,064 195.56

Category 1 - Insured or registered, or securities held by the Board or the Board's agent in the Board's name.
Category 2 - Uninsured or unregistered, with securities held by the counterparty's trust department or agent in the Board's name.
Category 3 - Uninsured or unregistered, with securities held by the counterparty, or by its trust department or agent but not in the Board's name.

Funds invested in an investment pool managed by another governrnent are not required to be categorized unless the investing entity owns specific, identifiable investment securities in the pool.

At June 30,1999, the carrying value of the Board's total investments was $10,196,188.17. The investments are classified as to risk categories as follows:

Typeof Investment
Federated Treasury Obligations Federal LoanHomeBank-Notes Federal LoanHomeBank-Bonds UnitedStatesTreasury Notes
Total
Investments not subject to categorization:
MutualFunds Money Market Account
Total Investments

Risk Categories 2

Carrying Amount

Fair Valye

0.00 0.00 $

31,173.52

700,313.00 4,002,513.90 5439416.00

31,173.52 700,313.00 4,002,513.90 5439416.00

31,173.52 700,313.00 4,002,513.90 5439416.00

s s s 31 173.52 10 142242.90 10,173,416.42 10,173,416.42

22771.75

22771.75

s 10 196 188.17 $10 196 188.17

- 14-

CITY OF GAINESVILLE BOARD OF EDUCATION - HALL COUNTY EXHIBIT "0" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30.1999

Note 3: NON-MONETARY TRANSACTIONS

The Board receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories

Note 4: GENERAL FIXED ASSETS

The following is a summary of changes in the General Fixed Assets Account Group during the fiscal year:

Balance July I, 1998 Additions Deletions Balance June 30, 1999
Note 5: RISK MANAGEMENT

Land

Buildings

Equipment

Total

194,840.76 $ 24,303,076.08 6,639,578.68 $ 31,137,495.52

2,878,387.98 1,184,352.05 4,062,740.03

789561.86

789561.86

194840.76 $ 27181464.06 $ 7034368.87 $ 34 410 673.69

The Board 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; natural disaster and unemployment compensation.

The Board has obtained commercial insurance for risk of loss associated with torts, assets, errors or omissions, job related illness or injuries to employees and natural disaster. The Board has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any of the past three years.

The Board is self-insured with regard to unemployment compensation claims. The Board accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated.

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

1998 1999

Beginning of Year Liabilitv

Claims and Changes in Estimates

$

1710 00 $

3320.00 $

$

2618.75 $

181225 $

Claims Paid

End of Year Liability

2411 25 $ 4431.00 $

2618.75 0.00

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

- IS -

CITY OF GAINESVILLE BOARD OF Em lCA TION - HALL COUNTY EXHIDIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30 1999

Note 5: RISK MANAGEMENT Position Covered

Superintendent Treasurer

$ 50,000.00 $ 50,000.00

Note 6: GENERAL LONG- TERM DEBT

CAPITAL LEASES
The City of Gainesville Board of Education has entered into various lease agreements as lessee for buses and facilities. 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. The following is an analysis of the carrying value of general fixed assets acquired under outstanding capital leases as of June 30, 1999:

Buildings Equipment

General Fixed Assets
$ 900,000.00 412172.00

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

$ 1312172.00

Pumose

Interest Rates

Amount

General Government - Series 1997

4.00% - 5.00% $12 360000.00

The changes in General Long-Term Debt during the fiscal year ended June 30,1999, were as follows:

- 16-

CITY OF GAINESVILLE BOARD OF EDUCATION - HALL COUNT''!' EXHIBIT "D" NOTES TO THE GENERAL PI JRPOSE FINANCIAL STATEMENTS
JUNE 30 1999

Note 6: GENERAL LONG-TERM DEBT

Balance July], 1998
Retroactive Restatement of Prior Year Balances
Balance July I, 1998 Restated
Deductions Debt Retired Payments
Balance June 30, 1999

Capital Leases

Long-Term Debt
Agreements

General Obligation
Bonds

Total

984,904,60 s 12,823,757,00 s ]4,190,000.00 $ 27,998,661.60

6888.95

6888.95

s 991,793.55 $ 12,823,757.00 14,190,000.00 $ 28,005,550.55

]53 777.32

983 576,00

],830,000,00

1,830,000.00 1]37353)2

838016.23 s t 1840 ]81.00 $12360000,00 s 25 038 197.23

At June 30, 1999, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30
2000 2001 2002 2003 2004 2005 - 2009 2010 - 2014
TotalPrincipaland Interest
Deduct: ImputedInterest
Net Present Value of Future Minimum Lease Payments

Capital Leases

Long-Term Debt
Agreements

General Obligation
Bonds

Total Debt

204,756,66 122,154.24 122,154,24 122,154.24 122,154,24 356,283.20

984,511.00 983,681.00 980,681.00 980,788.00 983,778.00 4,937,055.00 1 989687,00

2,792,447.50 3,144,010,00 3,546,710,00 3,990,155,00

3,981,715.16 4,249,845.24 4,649,545.24 5,093,097,24 1,105,932.24 5,293,338.20 I 989687.00

s 1,049,656.82 $11840181.00 13 473 322.50 s 26 363 160.32

211640.59

838016.23

Note 7' ON-BEHALF PAYMENTS

The Board has recognized revenues and expenditures in the amount of $365,530.93 for health insurance and retirement contributions paid on the Board's behalfby the following State Agencies.

Georgia Department of Education Paid to the State Merit System of Personnel Administration For Health Insurance of Non-Certified Personnel In the amount of$285,337.07

- 17 -

CITY OF GAINESVILLE BOARD OF Em TCATION - HALL COUNTY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30 1999

Note 7: ON-BEHALF PAYMENTS

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of$41,129.86

Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of$39,064.00

Nrrre 8: SIGNIFICANT COMMITMENTS

The following is an analysis of significant outstanding construction or renovation contracts executed by the Board as of June 30,1999, together with funding available:

Project
Enota Elementary Gainesville High School 99/98S-776-024

Unearned Executed Contracts

Funding Available From State

$ 289,822.40 6,601,578.67 34999.90 $ 73 181.00

$ 6 926 400.97 $ 73 181.00

The amounts described in this note are not reflected in the general purpose financial statements. Note 9: CONTINGENT LIABILITIES

Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The Board believes that such disallowances, if any, will be immaterial to its overall financial position.

Note 10' RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its

- 18 -

CITY OF GAINESVILLE BOARD OF EDUCAnON - HALL COUNTY EXHIBIT "0" NOTES TO THE GENERAL PI JRPOSE FINANCIAL STATEMENTS
JUNE 30 1999

Note 10: RETIREMENT PLANS

members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate
stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Board who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.95% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year
1999 1998 1997

Percentage Contributed
100% 100% 100%

Required Contribution
$ 1,979,548.08 $ 1,758,013.22 $ 1,611,788.39

- 19 -

CITY OF GAINESVILLE BOARD OF EDUCATION - HALL COUNTY COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30 1999

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

358,051.79 $

24,216.71

695.37

22,103.14 10,962.05

$ 391,116.98 $_--:;;:.:.2::4.:,=9,1;;2;:.0,:8;:..

$

16,982.37 $

5,397.74

64,891.41

19,514.34

$

81,873.78 $ _ _2~4,~ 912=.0- 8

$

22,103.14

10,962.05

276,178.01 $

0.00

$ 309,243.20 $

0.00

$ 391,116.98 $

24,912.08

See notes to the general purpose financial statements.

- 20-

EXHIBIT "E"

FEDERAL PROGRAMS

ATHLETIC FUND

TOTALS JUNE 30, 1999 JUNE 30, 1998

s

28,692.45 $ 410,960.95 $ 164,985.62

$ 434,911.80

435,607.17

317,931.35

22,103.14 10,962.05

16,925.22 8,829.72

$ 434,911.80 $

28,692.45 $ 879,633.31 $ 508,671.91

$ 163,869.73 125,813.76 130,990.44 14,237.87
$ 434,911.80

$ 163,869.73 $ 103,245.71

148,193.87

70,359.05

215,396.19

149,952.35

14,237.87

3,423.00

$ 541,697.66 $ 326,980.11

22,103.14 $ 10,962.05

16,925.22 8,829.72

$

0.00 $

28,692.45

304,870.46

155,936.86

$

0.00 $

28,692.45

337,935.65 $ 181,691.80

$ 434,911.80 $

28,692.45 $ 879,633.31 $ 508,671.91

-21

CITY OF GAINESVILLE BOARD OF EDUCATION HALL COUNTY COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30 1999

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
Capital Outlay
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Operating Transfers In
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food
FUND BALANCE JUNE 30

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

72,156,00

980,820.47

250,160.14

$ 1,303,136.61 $

222,306.69 222,306.69

$ 208,290.21
18,523.89 58.75

3.25 $ 1,157,674.66

$ 1,157,674.66 $

$

145,461.95 $

226,876.10 -4,569.41

$

145,461.95 $

156,471.00

5,177.92 2,132.33

4,569.41
0.00 0.00

$ 309,243.20 $

0.00

See notes to the general purpose financial statements.

-22

EXHIBIT "F"

FEDERAL PROGRAMS

ATHLETIC FUND

TOTALS YEAR ENDED JUNE 30, 1999 JUNE 30, 1998

$ 1,736,319.89 6,129.90 $
$ 1,742,449.79 $

163,982.04 163,982.04

294,462.69 2,717,140.36
420,272.08

306,309.78 2,019,992.53
356,300.53

3,431,875.13 $ 2,682,602.84

$ 1,035,257.21 379,060.17 206,804.69 3,793.01
30,809.16 25,755.94 80,532.49 $
$ 1,762,012.67 $ $ -19,562.88 $

1,243,547.42 $ 861,211.69

118,882.79 41,627.60

397,584.06 206,863.44
3,793.01
30,809.16 25,755.94 199,418.53 1,157,674.66 41,627.60

212,414.96 181,501.17
7,606.58 2,946.44 21,565.04 38,746.26 254,911.76 1,068,104.43

160,510.39 $ 3,307,073.82 $ 2,649,008.33

3,471.65 $ 124,801.31 $

33,594.51

19,562.88

24,132.29

17,277.33

$

0.00 $

3,471.65 $ 148,933.60 $

50,871.84

0.00

25,220.80

181,691.80

138,597.28

5,177.92 2,132.33

-5,525.21 -2,252.11

$

0.00 $

28,692.45 $ 337,935.65 $ 181,691.80

-23-

CITY OF GAINESVILLE BOARD OF EDUCATION - HALL COUNTY COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30 1999

ASSETS Cash and Cash Equivalents Investments Accounts Receivable
Talai Assets
LIABILITIES AND FUND EQUITY LIABILITIES
Cash Overdraft Contracts Payable Retainages Payable
Total Liabilities FUND EQUITY
Fund Balances Reserved For Purposes of Bond Issue For Slate Capital Outlay Projects Unreserved Undesignated Total Fund Equity
Total Liabilities and Fund Equity

REGULAR

BOND PROCEEDS

$

119,383.40 $

279,198.48

10,196,188.17

$

119,383.40 $ 10,475,386.65

$

175,520.41

$

175,520.41

$ 10,299,866.24

$

119,383,40

0.00

$

119,383.40 $ 10,299,866,24

$

119,383.40 $ 10,475,386.65

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

EXHIBIT"G"

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$

84,536.70 $

LOTTERY PROJECT

TOTALS

JUNE 30, 1999

JUNE 30,1998

36,249.00 $

519,367.58 $

67,604.60

10,196,188.17

14,234,393.89

14,469.10

$

84,536.70 $

36,249.00 $ 10,715,555.75 $ 14,316,467.59

$ - - - " , , -8, 4=,5, 3"6, ".7,0, -

$ 260,057.11

70,202.20 177,471.70
31,010.60

260,057.11 $ _ _,2,7-8,-,6,,8=4=.5,0,-

$ 10,299,866.24 $ 14,032,763.69

$

36,249.00

36,249.00

$

0.00

0.00

119,383.40

5,019.40

$

0.00 $

36,249.00 $ 10,455,498.64 $ 14,037,783.09

$

84,536.70 $

36,249.00 $ 10,715,555.75 $ 14,316,467.59

25

CITY OF GAINESVILLE BOARD OF EDUCATION - HALL COUNTY COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30 1999

REVENUES
State Funds Other Funds
Total Revenues
EXPENDITURES
Current Support Services Business Administration
Capital Outlay Building and Building Improvements Equipment
Debt Service Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Premiums on Bonds Sold Proceeds from General Obligation Bonds
Par Value Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
FUND BALANCE JUNE 30

REGULAR

BOND PROCEEDS

$

0.00 $

643,769.82

$

0.00 $

643,769.82

$

318.32

2,893,685.91

$

71,507.02

444.51

$

71,951.53 $ 2,894,004.23

$

-71,951.53 $ -2,250,234.41

$

186,315.53

$ -1,482,663.04

$

186,315.53 $ -1,482,663.04

$

114,364.00 $ -3,732,897.45

5,019.40

14,032,763.69

$

119,383.40 $ 10,299,866.24

See notes to the general purpose financial statements. -26 -

EXHIBIT "H"

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

LOTTERY PROJECT

TOTALS

YEAR ENDED

JUNE 30, 1999

JUNE 30, 1998

$

0.00 $

0.00

$

144,691.00

$

643,769.82

462,724.78

$

0.00 $

0.00 $

643,769.82 $

607,415.78

$

744,681.54 $

$

744,681.54 $

$

-744,681.54 $

$ 0.00

318.32 $ 3,638,367.45

0.00 $ 0.00 $

71,507.02 444.51
3,710,637.30 $
-3,066,867.48 $

131,969.49 813,469.53
14,290.00
959,729.02 -352,313.24

$

744,681.54 $

$

744,681.54 $

$

0.00 $

0.00

36,249.00 $ 36,249.00 $

$
967,246.07 -1,482,663.04
-515,416.97 $

1,091.00
14,190,000.00 311,167.82 -145,358.26
14,356,900.56

36,249.00 $ 0.00

-3,582,284.45 $ 14,037,783.09

14,004,587.32 33,195.77

$

0.00 $

36,249.00 $ 10,455,498.64 $ 14,037,783.09

- 27-

CITY OF GAINESVILLE BOARD OF EDUCATION - HALL COUNTY COMBINING BALANCE SHEET DEBT SERVICE FUND JUNE 30 1999

EXHIBIT "I"

ASSETS Cash and Cash Equivalents AccountsReceivable

PROPERTY TAXES FOR BOND DEBT
98,743.26

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

JUNE 30.1999

JUNE 30 1998

1,778,790.21 $ 1,778,790.21

980,345.68

505,216.99

603.960.25

491,085.00

Total Assets

98,743.26 $ 2,284,007.20 $ 2,382,750.46 $ 1.471,430.68

LIABILITIES AND FUND EQUITY
LIABILITIES
Cas h Overd raft
FUND EQUITY
Fund Balances Reserved For Debt Service Unreserved Deficit Undesignated
Total Fund Equity

288,609.76

288,609.76 $

441,745.29

-189,866,50 0.00
-189,866.50 $

2,284,007,20 $
0.00 2,284,007.20 $

2,284,007.20 $
-189,866,50 0.00
2,094,140.70 $

1,425,484.10
-395,798.71 0.00
1,029,685.39

Total Liabilities and Fund Equity $

98,743.26 $ 2,284,007.20 $ 2,382,750.46 $ 1,471,430.68

See notesto the general purposefinancialstatements.

-28-

CITY OF GAINESVILLE BOARD OF EDUCATION - HALL COUNTY COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
DEBT SERVICE FUND YEAR ENDED JUNE 30 1999

EXHIBIT "J"

REVENUES

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION
SALES TAX

TOTALS

YEAR ENDED

JUNE 30 1999

JUNE 30,1998

Taxes Other Funds
Total Revenues
EXPENDITURES

s 790,343.66 s 790,343.66

2,911,603.42 36,031.58
2,947,635.00

3.701,947.08 36031.58
3737,978.66

2,472,628.73 15,873.77
2,488,502.50

Current SupportServices Business Administration
Debt Service Principal Interest PayingAgentFees
Total Expenditures
Excessof Revenuesover (under)Expenditures
OTHER FINANCING SOURCES

110,000,00 473,576.00
835.45

s

584,411.45

205,932.21

2,230,000.00 555,735.00 5,109.40
2,790,844.40
s 156,790.60

2,340,000.00 1,029,311.00
5,944.85
3,375,255.85
362,722,81

28.95
982,361.00 400,990.00
2,031.89
1,385,411.84
1,103,090.66

Accrued Intereston BondsSold Operating TransfersIn
Total Other Financing Sources
Excessof Revenuesand Other Financing Sources over(under) Expenditures
FUND BALANCE JULY 1

701 ,732.50

$

701,732.50

205,932,21 -395,798.71

858,523.10 1,425,484.1 0

s
701,732.50
s 701,732.50

13,366.33 13,366.33

1,084,455,31 1,029,685.39

1,116,456.99 -86,771.60

FUND BALANCE JUNE 30

-189,866.50

2,284,007.20 $ 2,094,140.70 $ 1,029,685.39

See notesto thegeneral purpose financial statements.

-29-

CITY OF GAINESVILLE BOARD OF EDUCATION - HALL COUNTY COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUNDS YEAR ENDED JUNE 30 1999

EXHIBIT "K"

SPECIAL ACCOUNT
ASSETS Cash and Cash Equivalents

BALANCE JULY 1,1998

ADDITIONS

DEDUCTIONS

BALANCE JUNE 30, 1999

s 4,958.43

226.42 $

619.77 $

4,565.08

LIABILITIES Funds Held for Others

$

4,958.43 $

226.42 $

619.77 $

4,565.08

STUDENT ACTIVITIES ACCOUNT

ASSETS

Cash and Cash EqUivalents

$

153,848,37 $

496,684,63 $

477,092,12 $

173,440.88

LIABILITIES Funds Held for Others

$

153,848.37 $

496,684.63 $

477,092.12 $

173.440,88

TOTALS - AGENCY FUNDS
ASSETS Cash and Cash Equivalents

$

158,806,80 $

496,911,05 $

477,711,89 $

178,005,96

LIABILITIES Funds Held for Others

$

158,806,80 $

496,911,05 $

477,711,89 $

178,005,96

See notes to the general purpose financial statements,

- 30-

CITY OF GAINESVILLE BOARD OF EDUCATION - HALL COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30 1999

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U. S. Departmentof Direct International Forestry Cooperation (P,L. 101513) MonarchButterfly Hibernation Field Study MonarchGrant 1999 Grant ChildNutrition Cluster Pass-Through From GeorgiaDepartmentof Education Food and Nutrition Program Food Services SchoolBreakfastProgram 1999 Grant NationalSchoolLunchProgram 1999 Grant
Total ChildNutrition Cluster
Other Programs Pass-Through From GeorgiaDepartmentof Education Food and Nutrition Program Food Distribution Program(1) Pass-Through From Officeof SchoolReadiness Food and Nutrition Program Childand AdultCare Food Program 1999 Contract SummerSchoolFood ServiceProgram for Children 1999 Grant
Total Other Programs
Total U. S. Departmentof Agriculture
Education, U. S. Departmentof SpecialEducation Cluster Pass-Through From GeorgiaDepartmentof Education Individuals with Disabilities Education Act Part B - SpecialEducation Flow Through 1999 Grant Preschool 1999 Grant
Total SpecialEducation Cluster
Other Programs Pass-Through From GeorgiaDepartmentof Education Elementaryand secondaryEducation Act Title I Grantsto LocalEducational Agencies 1999 Grant Summer Grant Tille II EisenhowerProfessional Development 1999 Grant Title VI Innovative Education ProgramStrategies 1999 Grant Tille VII ImmigrantEducation 1999 Grant Safe and Drug-Free Schools 1999 Granl

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

10.0FA

10.553

N/A

10.555

N/A

10.550

N/A

10.558

N/A

10.559

N/A

84,027

N/A

84.173

N/A

84.010

N/A

84,010

N/A

84.281

NIA

84.298

N/A

84.162

N/A

84.186

N/A

- 31 -

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

5,000.00 $

8,291.32 (3)

221,279.66 651,135.59 872.415.25

(2) 1,049,269.44 (3) 1,049,269.44

51,820.02 $

51,820.02

43,143.20 13,442.00 108,405.22 985,820.47

43,143.20 13,442.00 108,405.22 1,165,965.98

137,983.15 29,624.53
167,607.68

137,983.15 29,624,53
167,607.68

1,051,791.03 81,699,99
23,314.43
30,189.29
70,399,85 12,244.68

1,051,791.03 81,699.99
23,314,43
30,189.29
70,447.58 (3) 12,244.68

CITY OF GAINESVILLE BOARD OF EDUCATION _ HALL COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30 1999

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Education, U. S. Department of Other Programs Pass-Thrcuqh From Georgia Department of Education Stewart B. McKinney Homeless Assistance Act Education for Homeless Children and Youth 1999 Grant Vocational Education - Basic Grants to States High School Program Basic Grant 1999 Grant Pass-Through From Piedmont Migrant Education Agency Elementary and Secondary Education Act Title I Migrant Education 1999 Grant Summer Grant
Total U. S. Department of Education
Labor, U. S. Department of Pass-Through From Georgia Department of Labor Job Training Partnership Act 17-94-20-006

CFDA NUMBER

PASSTHROUGH
ENTITY ID
~

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

84.196

N/A

84.048

N/A

84.011

N/A

84.011

N/A

17.250

N/A

19,430.83 $

22,620.83 (3)

40,134.98

59,298.71 (3)

87,362,70 4,434.10
1,588,609.56

87,362.70 4,434.10
1,611,011.02

142,710.33 $

142,710,33

Total Federal Financial Assistance
N/A = Not Available

2,717,140.36 $

Notes to the Schedule of Expenditures of Federal Awards
(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the current fiscal year.
(2) Expenditures for the School Breakfast Program were not maintained separately and are included in the 1999 National School Lunch Program.
(3) Expenditures for this program include State. and/or Other Funds. Expenditures are not maintained by fund source.
Major Programs are identified by an asterisk (*) in front of the CFDA number.
The Board did not provide Federal Assistance to any Subreclpient.
The accompanying schedule of expenditures of Federal awards indudes the Federal grant activity of the City of Gainesville Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the general purpose financial statements.

2,919,687,33

See notes to the general purpose financial statements.

- 32-

CITY OF GAINESVILLE BOARD OF EDUCATION - HALL COUNTY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 1999

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Education, Georgia Departmentof QualityBasic Education General and Career Education Programs Special EducationPrograms Remedial Education Program Media Center Programs Staff DevelopmentPrograms IndirectCost Pupil Transportation Regular Bus Replacement Limited English Speaking MiddleSchool IncentiveProgram Special Instructional Assistance In-School Suspension Counselors Grades 4 and 5 Technology Specialist Local Five Mill Share Deferred Summer Salaries(PriorYear) Deferred Summer Salaries(CurrentYear) Food Services Other Stale Programs Apprenticeship Program At-RiskSummer SchoolProgram Governor's EmergencyFunds (1) Health Insurance InnovativePrograms Mentoring Program Mentor Teacher Program Preschool HandicappedProgram Remedial SummerSchoolProgram Special EducationLowIncidenceGrant Special Populations StudentRecord Teachers' Retirement LotteryPrograms Computersin the Classroom
Officeof SchoolReadiness Pre-Kindergarten Program
Officeof Treasuryand FiscalServices Public SchoolEmployeesRetirement
CONTRACTS Education,Georgia Departmentof Implementation of and operation of one or more after schoolprograms for Grades4-8 Georgia'sReading ChallengeGrant

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 8,483,712.00 1,101,825.00 111,776.00 350,898.00 87,936.00 2,134,392.00
262,423.00 77,403.00
639,169.00 276,483.00 549,896.00
94,673.00 33,516.00 57,685.00 -3,792,234.00 -1,611,671.00 1,727,907.00
s
35,000.00 9,142.68 2,000.00
285,337.07 4,676.38 3,500.00 1,782.00
66,214.00 5,253.77
30,611.00 658.00
2,601.75 41,129.86

72,156.00 68,520.00

153,786.69

39,084.00

8,483,712.00 1,101,625.00
111,776.00 350,698.00
87,936.00 2,134,392.00
262,423.00 77,403.00
639,169.00 276,483.00 549,896.00
94,673.00 33,516.00 57,685.00 -3,792,234.00 -1,611,671.00 1,727,907.00 72,156.00
35,000.00 9,142.66 2,000.00
285,337.07 4,676.38 3,500.00 1,782.00
66,214.00 5,253.77
30,611.00 658.00
2,601.75 41,129.86
68,520.00
153,786.69
39,064.00

59,843.09

59,843.09

s s 11,172,202.58

294,462.69 $ 11,466,665.27

(1) The purpose of the funds are Gainesville High School 1999 Georgia School of Excellence.

See notes to the general purposefinancial statements.

- 33-

CITY OF GAINESVILLE BOARD OF EDUCATION - HALL COUNTY SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30 1999

SCHEDULE "3"

PROJECT
Payment of a portion of the previously incurred obligations debts of capital outlay projects of the City of Gainesville School District are specifically Series 1986, 1991, 1993 bonds becoming due January 1, 1998 through and including December 31, 2002
Construction of additional classrooms, instructional and support spaces, as well as, remodeling, and renovating existing classrooms, instructional and support spaces, and to provide furnishing, equipment and fixtures for such areas at existing elementary and middle schools
Acquisition, construction, and equipping of a new academic wing, renovation of existing instructional and support spaces, construction of a new gymnasium at the high school

ORIGINAL ESTIMATED
COST(1)
2,038,737.00

CURRENT ESTIMATED COSTS (2)
2,038,737.00

AMOUNT EXPENDED IN CURRENT YEAR (3) (4)
400,000.00

AMOUNT EXPENDED
IN PRIOR YEARS

4,105,931.00

4,105,931.00

1,861,101.96 $ 799,583.16

14.080,332.00

14,080,332.00

1,777,265.49

20,225.000,00 $

s 20,225,000,00

4,038,367.45 $ 799,583.16

(1) The Board's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax.

(2) The Board's current estimate of total cost for the projects. Indudes all cost from project inception to completion.

(3) The voters of Hall County approved the imposition of a 1% sales tax 10 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 Board has incurred interest and other expense to provide advance funding for the above projects as follows:

Prior Year Current Year Total

$

400,990.00

560,844.40

981,834.40

See notes to the general purpose financial statements.

-34-

CITY OF GAINESVILLE BOARD OF EDUCATION - HALL COUNTY SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS YEAR ENDED JUNE 30 1999

SCHEDULE "4"

EXPENDITURES

COMPUTERS IN THE
CLASSROOM

PRE-KINDERGARTEN PROGRAM

Current

Instruction

$

Support Services

Pupil Services

Improvement of Instructional Services

Other Support Services

68,520.00 $

139,770.21 $
18,523.89 58.75 3.25

TOTAL
208,290.21 18,523.89 58.75 3.25

Total Expenditures

$

68,520.00 $

158,356.10 $

226,876.10

RECAP: Salaries and Benefits Pre-Kindergarten Program Other Expenditures Computers in the Classroom Pre-Kindergarten Program

$

152,519.24

68,520.00 5,836.86

$

226,876.10

See notes to the general purpose financial statements. 35-

CITY OF GAINESVILLE BOARD OF EDUCATION - HALL COUNTY ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30 1999

SCHEDULE "5"

Minimum Expenditure Requirements (Total Allotment)
Expenditures on Combined Program Basis Salaries (1) (2) Operations
Less: Expenditures for Media Center Programs in Excess of Total Media Allotment
Expenditures per Audit

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$

10,047,811.00 $

285,656.00

$

13,992,306.57

994,581.78 $

$

14,986,888.35

901,673.63

-130,951.62

$

14,855,936.73

Amount of Underexpenditure for Total Allotment

$

0,00 $

0.00

Note: (1) Salary accruals (July and August 1999 Deferred Salaries) reported as expenditures in the General Purpose Financial Statements are not included on this analysis in order to comply with program guidelines.
(2) Salary accruals (July and August 1998 Deferred Salaries) reported as expenditures in the prior year General Purpose Financial Statements are included on this analysis as required by program guidelines.

See notes to the general purpose financial statements. - 37 -

CITY OF GAINESVILLE BOARD OF EDUCATION - HALL COUNTY ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS BY PROGRAM
GENERAL FUND QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30 1999

GENERAL AND CAREER EDUCATION PROGRAMS Kindergarten (0) Grades 1 - 3 (0) Sub-Total- K-3 Grades 4 - 5 (oJ Grades 6 - 8 (oJ Grades 9 - 12 (*) High School laboratories (0)
n Vocational Education laboratories
Total General and Career Education Programs SPECIAL EDUCATION PROGRAMS
Regular Programs Category I (") Category II CO)
n Category III
Category IV (0) Sub-Total - Regular
Categol)' VI (Gifted) (0) Total Special Education Programs
REMEDIAL EDUCATION PROGRAM (0) Total Fourteen Weighted Programs
MEDIA CENTER PROGRAMS Salaries Operations Total Media Center Programs
Total Fourteen Weighted and Media Center Programs
STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development
Total Staff Development Programs (.) ldennnes Fourteen Weighted Programs. (1) Salary accruals (July and August 1999 Deferred
Salaries) reported as expenditures in the General Purpose Financial Statements are not included on this analysis in order to comply with program guidelines See notes to the general purpose financial statements.

ALLOTMENTS FROM GEORGIA DEPARTMENT OF

REQUIRED

ORIGINAL

~

ORIGINAL

MID-TERM

1,173,346.00 2,597,021.00 3,770,367.00 90
997.894,00 90 1,667,824.00 90
922,997.00 90 641,786.00 90 482.844,00 90 8,483,712.00

1,056,011.40 2.337,318.90 3,393,330.30
898,104.60 1,501.041.60
830.697.30 577,607.40 434.559.60 7.635.340.80

855.968.00

s 770,371.20

0.00 0.00
0.00 0.00

655,968,00 90 245,657.00 90 1,101,625.00 111,776.00 90 9.697,113.00

770,371.20 221,091.30 991,462.50 100,598.40 8.727,401.70

284.179.00 90 66.519.00 100
350,698.00

255.761.10 66.519.00
322,280.10

10,047,811.00

9,049,681.80 $

0.00
0.00 0.00 0.00
0.00 0.00
0.00

27,767.00 60,169.00

27,767.00 60,169.00

87,936.00 100 $

87,938.00 $

(2) Salary accruals (July and August 1998 Deferred Salaries) reported as expenditures in the prior year General Purpose Financial Statements are included on this analysis as required by program guidelines.

- 38 -

0.00 0.00
~0:.0;0.

SCHEDULE -6"

EDUCATION TOTAL
REQUIRED

ACTUAL EXPENDITURES

SALARIES {1)(2)

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

1,056,011.40 S

1,278,032.66

57,392,78

1.335,425,44

2,337,318.90

3,542,501,19

165,323.07

3.707,824.26

3,393,330.30

4,820,533.85

222,715,85

5,043,249.70

0.00

898,104.60

1,671,868.86

101,123.06

1.712,991.92

0.00

1,501,041.60

2,227,446.20

138,355.95

2,365.802.15

0.00

830,697.30

1,508,285.87

90,751.57

1,599.037.44

0.00

577,607.40

844,319.37

64,507.49

908,826.86

0.00

434,559.60

544,185.33

161,452.54

705,637.87

0.00

7,635,340.80

11,616,639.48

778,906.46

12,395,545.94

710,371.20
770,371.20 221,091.30 991,462.50 100,598.40 8,727,401.70

345,802.48 905,872.35 164.436.08
1,416,110.91
456,639.31
1,872,750.22
114,175.40
13,603,565.10

3,671.95 5,342.87 97,325.55 2,186.99
108,527.36
10,593.39
119,120.75
3,646.42
901,873.63

3,671.95 351,145.35 1,003,197.90 166.623.07
1,524,638.27
467,232.70
1.991,870.97
117,821.82
14,505,238.73

0.00 0.00
0.00

255,761.10

388,741.47

388,741.47

0.00

66,519.00

92,908.15

92,908.15

0.00

322,280.10

388,741.47

92,908.15

481,649.62

s s 9.049,681.80

13,992,306.57

s s 994,581.78

14,986,888.35

0.00

27,787.00 60,169.00
87,936.00

77,494.87 26,805,19

77,494.87 26.805.19

s 104,300.06

s 104,300.06

0.00

39 -

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

w. RUSSELL

HINTON

STATE AUDITOR

(404\656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
25..+ Washington Street. S.\\'., Suite 214 Atlanta. Georgia 30334-X400
June 2, 2000

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Gainesville Board of Education
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANPARDS
Ladies and Gentlemen:
We have audited the financial staternents of City of Gainesville Board of Education as of and for the year ended June 30, 1999, and have issued our report thereon dated June 2, 2000. This report was qualified for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States.
Compliance
As part of obtaining reasonable assurance about whether City of Gainesville 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 grants, noncompliance with which could have a direct and material effect on the determination offmancial 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 that are required to be reported under Government Auditing Standards.
Internal Control Oyer Financial Reporting
In planning and performing our audit, we considered City of Gainesville Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose
99YB-IO

all matters in the internal control over financial reporting that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses.
This report is intended solely for the information and use of management, members of the City of Gainesville Board of Education, 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,
~"OO~~ State Auditor
RWH:jb 99YB-IO

"T. RUSSELL

HINTOr-..

STATE AUDITOR.

(4041656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
])4 V"/ashingtoll Street. S.W" Suite 214 Atlanta. Georgia 3()]34-H40<)
June 2, 2000

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Gainesville Board of Education
REPORT ON COMPLIANCE WITH REOUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of City of Gainesville Board of Education with the types of compliance
u.s. requirements described in the Office ofManagement and Budget (OMB) Circular A-I33 Compliance
Supplement that are applicable to each of its major Federal programs for the year ended June 30, 1999. City of Gainesville Board of Education's major Federal program is identified in the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements oflaws, regulations, contracts and grants applicable to its major Federal program is the responsibility of City of Gainesville Board of Education's management. Our responsibility is to express an opinion on City of Gainesville Board of Education's compliance based on our audit.
We conducted our audit of compliance in accordance with generally accepted auditing standards; 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 ofStates. 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 Gainesville 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 Gainesville Board of Education's compliance with those requirements.

99SA-1O

In our opinion, the City of Gainesville Board of Education complied, in all material respects, with the requirements referred to above that are applicable to its major Federal program for the year ended June 30, 1999.
Internal Control Over Compliance
The management of City of Gainesville Board of Education is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered City of Gainesville Board of Education's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-l33.
Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more ofthe internal control components does not reduce to a relatively low level ofrisk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended solely for the information and use of management, members of the City of Gainesville Board of Education, 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.
espectfully submitted,
LO.4,
RWH:jb 99SA-IO

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

CITY OF GAINESVILLE BOARD OF EDUCATION - HALL COUNTY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS
YEAR EI\'DED JUNE 30 1999
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS None Reported

SECIlONIV FINDINGS AND QUESTIONED COSTS

CITY OF GAINESVILLE BOARD OF EDUCATION - HALL COUNTY SCHEDULE OF FINDINGS AND OUESTIONED COSTS YEAR ENDED nINE 30 1999
SUMMARY OF AUDITOR'S RESULTS
1. Type of Report Issued on the Financial Statements The auditor's opinion on the City of Gainesville Board of Education's financial statements was qualified for a departure from generally accepted accounting principles.
2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the City of Gainesville Board of Education did not disclose any reportable conditions related to the financial statements.
3. Noncompliance Material to the Financial Statements The audit of the City of Gainesville Board of Education disclosed no instances of noncompliance that were deemed to be material to the financial statements.
4. Reportable Conditions jn Internal Control Over Major Programs The audit report for the City of Gainesville Board of Education did not disclose any reportable conditions in internal control over major programs.
5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the City of Gainesville Board of Education's report on compliance with requirements applicable to major programs was unqualified.
6. Audit Findings ReQJlired to be Reported by Section 5lOCal of OMB Cjrcular A-133
The City of Gainesville Board of Education's audit did not disclose audit findings required to be reported by section .5 IO(a)ofOMB Circular A-B3.
7. Major Programs Federal awards audited as major programs are as follows: 84.0 I0 Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
9. Low Risk Auditee The City of Gainesville Board of Education was audited as a low risk auditee based on a waiver granted by the U. S. Department of Education.
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED CQSTS
No matters were reported.
III FEDERAL AWARD FINDINGS AND QUESTIQNED CQSTS
No matters were reported.