G,I\ A 'BOD .RI
33
J3
lci94-C!6'
STATE OF GEORGIA DEPARTMENT OF AUDITS
254 WASHINGTON STREET ATLANTA. GEORGIA 30334

AUDIT REPORT CITY OF JEFFERSON BOARD OF EDUCATION
A COMPONENT UNIT OF TI-IE CITY OF JEFFERSON, GEORGIA
YEAR ENDED JUNE 30, 1995

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

EXHIBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

3

C

STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

BUDGET AND ACTUAL - (NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

5

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

6

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

18

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

20

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

22

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

23

SCHEDULES

1 SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

24

2 CASH AND CASH EQUIVALENTS

25

3 ACCOUNTS RECEIVABLE

26

SCHEDULE OF REVENUE

4

STATE FUNDS

27

5

LOCAL AND OTHER FUNDS

28

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDITIONAL FINANCIAL INFORMATION

SCHEDULES

SCHEDULE OF EXPENDITURES BY OBJECT

6

GOVERNMENTAL FUND TYPES

29

7

LOTTERY PROGRAMS

30

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

8

OVERALL

31

9

BY PROGRAM

32

10 SCHEDULE OF COMPENSATION AND IRAVEL OF BOARD MEMBERS

34

SECTION II
COMPLIANCE
COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS
SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS

SECTION III
INTERNAL CONTROL
REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY - TABLE OF CONTENTS -
SECTION IV FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
SECTIONV PERTINENT VIEWS OF RESPONSIBLE OFFICIALS PERTINENT VIEWS OF RESPONSIBLE OFFICIALS

SECTION I FINANCIAL

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 6, 1996

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members of the City ofJefferson Board of Education

INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

Ladies and Gentlemen:

We have audited the general purpose financial statements (Exhibits A through D) of the City of Jefferson Board ofEducation, component unit of the City of Jefferson, as of and for the year ended June 30, 1995, as listed in the table of contents. These financial statements are the responsibility of the Board's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards, Government Auditing Standards, issued by the Comptroller General of the United States, and the provisions of the Office of Management and Budget Circular A-128, "Audits of State and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose 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 financial 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 certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:

* The general purpose financial statements of the Board did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles.

95ARL-13*

* School activity accounts maintained at the individual schools are not included in the general purpose
financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general purpose financial statements.
* The Board did not recognize as expenditures, in the year ended June 30, 1995, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 1995. Also funds received, subsequent to June 30, 1995, from the Georgia Department ofEducation for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1994, were improperly recorded in the year ended June 30, 1995. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements present fairly, in all material respects, the financial position of the City of Jefferson Board of Education as of June 30, 1995, 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 a report dated February 6, 1996, on our consideration ofthe Board's internal control structure and a report dated February 6, I996, on its compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the general purpose financial statements of the City of Jefferson Board of Education taken as a whole. The combining fund statements (Exhibits E through H) and the financial schedules (Schedules I through IO which includes the Schedule of Federal Financial Assistance) are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of the City of Jefferson Board of Education. 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 matters 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 ofthis 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,
t%-
Claude L. Vickers State Auditor
CLV:jy 95ARL-13*

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY -I-

!:;ITV QE JE;EEE;B~ E!QARQ QE ;:DUCATIQtj - JA!:,!SQf:l s:;;QJ.!NTY !:.QM!:!IN;;Q ~~NQ;; Hf;i;I
&.I. E!.!NQ T)'.EE ANQ ACCOUNT GRQ!.!P J!.!NE 39 1995

EXHIBIT"A"

~
Cash and Cash Equivalents
Accounts Receivable
llll/enlories Food Donated Commodities Purchased Food
Prepaid Items
Amount to be Provided in Future Years For Payment of Capital Lease Agreements

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS {Memorandum Onl}'.l JUNE 30, 1995 JUNE 30, 1994

$

97,611.70 $ 165,544.93 $

8,591.30

$ 271,747.93 $ 279,824.71

78,725.49

4,000.26

82,725.75

157,941.58

8,312.71 953.96

8,312.71 953.96

7,632.24 642.72
2,510.00

$

263,940.37

263,940.37

303,033.26

Total Asseh;

$ 176 337.19 $ 178 811.86 $

8 591.30 $

263 940.37 $ 627,680.72 $ 751 584.51

1.IAl;!l!.ITI;; ANQ FUND l;QUITY

LIABILITIES

Accounts Payable

$

Salaries Payable

Expired Grant Balances Payable

Deferred Revenue

Capital Lease Agreements

Total Liabilities

$

FUNQEOUITY

Fund Balances

Rese!Yed

For Continuation of Federal Programs

For Expired Grant Balances/Questioned

Costs

$

Forllll/enlories

Food

Donated Commodities

Purchased Food

For State Capital Outlay Projects

$ Unresenied
Undesignated

Total Fund Equity

$

42,259.59 $ 2,711.42
44 971.01 $
17,144.57 $
17,144.57 $ 114 221.61 131,366.18 $

11,539.86 26,986.18 6,776.89
45,302.93
82.10
8,312.71 953.96 $
9,348.77 $ 124,160.16 133,508.93 $

$ $
8 591.30 8,591.30
0.00 $ 8 591.30 $

$
263 940.37 263940.37 $

53,799.45 $ 26,986.18
9,488.31
263,940.37
354 214.31 $

184,941.86 25,688.10
1,574.50 70,242.20 303,033.26
585,479.92

$

164.70

$

17,226.67

17,144.57

$ 0.00 0.00 $

8,312.71 953.96
8 591.30
35,084.64 $
238 381.77
273 466.41 $

7,632.24 642.72
8 591.30
34,175.53
131,929.06
166104.59

Total Liabilities and Fund Equity

$ 176 337.19 $ 178811.86 $

8,591.30 $

263 940.37 $ 627,680.72 $ 751 584.51

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

CJIY Of JEFFERSON BOARD Of EDUCATION JACKSON COUNTY COMBINED STATEMENT Of REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 3Q 1995

EXHIBIT"B"

REVENUES
State Funds Federal Funds Local and Other Funds
Total R8Y811ues
EXPEND[TURES
Current ln&truction 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 Community Service Operations Food Services Operation Other Operations of Non-Instructional Services
Debt Service Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES {USES}
Capital Leases Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
Food Inventory Net Change in Period Donated Commodities Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

CAPITAL PROJECTS
FUND

TOTALS (Memorandum Only)
YEAR ENDED JUNE 301 1995 JUNE 301 1994

$ 3,233,354.80 $ 3,525.25
987,256.20
$ ,22,136.25 $

110,725.00 $ 291,801.46 138,219.53

0.00 $

s_ _ _ s S0,745.99

....ao=.oo"'""

3,34,079.80 $ 295,326.71
1,125, 75.73
s 4,7641882.24

3,011,225.44 278,142.92
1,037,895.14
4,327,263.50

$ 2,753,890.64 $

164,942.84
35,91 .95
112,839.01 136,677.51
34,078.06
46,498.42 306,347.07
55,934.36 29,690.88

20,549.60

60,201.03

39,092.89 22,841.02

$ 4,129,498.28 $

$

94,637.97 $

196,176.84 $

0.00 $ 2,950,067.48 $ 2,755,907.29

4,706.36 3,697.82
6,50.30
12,328.25 227.21
305,337.07

169,649.20 39,612.77 112,839.01 143,217.81
34,078.06
46,498.42 306,347.07
55,934.36 42,019.13
20,776.81 305,337.07
60,201.03

127,166.73 38,786.39 142,008.44 134,221.50 295,694.28 48,563.83 462,460.01 102,115.17 93,018.25
558.26 15,721.81 279,351.10 57,169.68

39,092.89 22,841.02

40,085.76 21,848.15

529,013.85 $ _ _ _ _0_._00_$ 4,658,512.13 $ 4,614,676.65

11,732.14 $

0.00 $ 106,370.11 $ -287,413.15

$ $ _ _-1;.::0;.i.,4:=2..:.:1."-'72=-

10,421.72

$ -10,421.72 $_.......;.1=0..;,;;42:.;.1:..:...72=-

$

84,216.25 $

22,153.86 $

47,149.93

110,363.36

680.47 311.24

$

$

10,421.72

-10,421.72

$ _ _ _ _0._00_$

121,549.00 121,549.00

0.00 $ 8,591.30

106,370.11 $ 166,104.59

-165,864.15 334,206.02

680.47 311.24

-1,766.95 -470.33

FUND BALANCE JUNE 30

$ 131,366.18 $ 133,508.93 $

8,591.30 $ 273,466.41 $ 166,104.59

The notes to the general purpose financial statements are an integral part of this statement.
.3.

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - (NON-GAAP BASIS} GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 1995

EXHIBIT"C"

REVENUES
State Funds Federal Funds Local and Other Funds
Total Revenues
EXeENDITURES
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 Community Service Operations Food Services Operation Other Operations of Non-Instructional Services
Debt Service
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES}
Other Sources Other Uses
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1, 1994
ADJUSTMENTS
Prior Year (Net)

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS}

$ 3,158,588.00 $ 3,233,354.80

3,525.25

929,834.00

987,256.20

$ 4,088,422.00 $ 4,224,136.25

$ 2,749,684.00 $ 2,753,890.64

171,085.00 73,793.00 127,896.00 129,466.00 338,842.00 42,858.00 317,843.00 75,710.00
9,528.00

164,942.84 35,914.95 112,839.01 136,Sn.51 344,078.06 46,498.42 306,347.07 55,934.36 29,690.88

16,000.00

20,549.60

56,192.00

60,201.03 61,933.91

$ 4,108,897.00 $ 4,129,498.28

$ -20.475.00 $ 94,637.97

$

0.00

$ -10,421.72

$

0.00 $ -10,421.72

$ -20,475.00 $ 36,419.62

84,216.25 47,149.93

-434.17

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS}

$ 23,528.00 $ 110,725.00

236,370.00

291,801.46

122,636.00

138,219.53

$ 382,534.00 $ 540,745.99

$ 91,963.55 $ 196,176.84

3,200.00 8,141.00

4,706.36 3,697.82

6,230.00

6,540.30

9,400.00 2,900.00
500.00 261,164.00

12,328.25
227.21 305,337.07

$ 383,498.55 $ 529,013.85

$

-964.55 $ 11,732.14

$

0.00 $ 10,421.72

$

0.00 $ 10,421.72

$

-964.55 $ 22,153.86

110,909.12

102,088.40

-7,239.64

FUND BALANCE JUNE 30, 1995

$ 15,510.45 $ 131,366.18

$ 102,704.93 $ 124,242.26

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

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1995

EXHIBIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City ofJefferson Board ofEducation (Board) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. With the exception ofthe departures from generally accepted accounting principles disclosed in these notes, the financial statements of the Board have been prepared in conformity with generally accepted accounting principles as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting standards.
The more significant of the Board's accounting policies are described below.
REPORTING ENTITY
In evaluating how to define the government unit for financial reporting purposes, management has considered the criteria set forth in GASB Codification of Governmental Accounting and Financial Reporting Standards, Section 2100, "Defining the Financial Reporting Entity". The primary government consists of all the organizations that compose the legal entity of the City of Jefferson Board of Education. Based upon the application ofthe above criteria, the City of Jefferson Board is determined to be a component unit of the City ofJefferson, Georgia.
Board members were elected by the public and have decision making authority, the power to designate management, the ability to significantly influence operations, but do not have the authority to levy taxes or incur bonded indebtedness. The City ofJefferson provides a substantial majority of funding for the operations ofthe Board, consequently, the Board is deemed to have a financial benefit/burden relationship with the City of Jefferson as defined by GASB.
FUND ACCOUNTING
The Board uses funds and an account group 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.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.

- 6-

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1995

EXHIBIT "D"

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements.
The general purpose financial statements account for all State, Federal, Local and Other Funds under control ofthe Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most of a Board's general activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the 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 primarily received from the Georgia Department of Education and from the Federal government to accomplish specific objectives and are required to be accounted for separately. Also included are proceeds received from State, Federal, Local and Other sources for operations of the school food services fund. This fund could be accounted for as an enterprise fund; however, the Board chooses not to provide for depreciation, but to maintain the fund on a modified accrual basis and to report the fund as a special revenue fund under governmental fund types, which is acceptable under generally accepted accounting principles for governmental entities.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - used to account for material capital lease obligations.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements 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.
- 7-

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1995

EXHIBIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
Governmental funds are accounted for using the modified accrual basis 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 ofthe current period. Those revenues
considered susceptible to accrual are property taxes, intergovernmental grants and investment income. Property taxes are considered available if they are collected and remitted by the collecting agent to the Board within 60 days after fiscal year-end.
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share ofthese contracts. During fiscal year 1995, a substantial number of personnel of the Board were employed for a one hundred and ninety day period beginning in late August 1994 and ending in early June 1995. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1994 and ending in August 1995. State grants to fund the State's share of these contracts were disbursed from the Georgia Department ofEducation to the Board in the same twelve months. As ofJune 30, 1995, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 1995, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1995. Also, the State's portion of the compensation paid in July and August 1995 was received and recorded as revenue in the fiscal year subsequent to June 30, 1995. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1994, were recorded in the year ended June 30, 1995. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
BUDGET
The City ofJefferson Board ofEducation'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.

- 8-

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1995

EXHIBIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year end.

The Statement ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual presents actual and budgeted data for the General Fund and Special Revenue Fund. To facilitate comparison with the budget, the following adjustments have been made to actual revenues, expenditures and fund balance as reflected on Exhibit "B" of this report:

Excess ofRevenues and Other Sources of Financial Resources over (under) Expenditures and Other Financing Uses
Fund Balance July 1, 1994 Adjustments:
Inventories July 1, 1994 Food Donated Commodities Purchased Foods
Fund Balance June 30, 1995 (Budget Basis)

Special Revenue
Fund
$ 22,153.86 110,363.36
-7,632.24 -642.72
$ 124,242.26

CASH AND CASH EQUIVALENTS

COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofdeposits (including N.O.W. accounts) in authorized financial 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.

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CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1995

EXHIBIT"D"

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

RECEIVABLES

Receivables consist ofgrant reimbursements due from Federal, State or other grantors 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 Jefferson fixed the property tax levy for the 1994 tax year (calendar year) on October 20, 1994 (levy date). Taxes were due on December 20, 1994. The lien date for property taxes was January 1, 1994. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1995 since their collection meets the criteria of GASB codification section P70.103. The City of Jefferson Clerk bills and collects the property taxes for the Board ofEducation, and remits the balance oftaxes collected to the Board.

Tax millage rate levied for the 1994 tax year (calendar year) for the City of Jefferson Board ofEducation was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

12 90 mills

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. 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.

INTERFUND TRANSACTIONS

The Board has the following types of interfund transactions:

- 10 -

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1995

EXHIBIT"D"

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reimbursements ofexpenditures initially made from a fund that are properly applicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
Operating transfers are recorded for all interfund transactions other than reimbursements.
MEMORANDUM ONLY -TOTAL COLUMNS
Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results 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 ofthis data.
Note 2: DEPOSITS
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 ofinsurance, or by collateral. The aggregate of the face value of such surety bond and the market value ofsecurities shall be equal to not less than 110 percent of the public funds being secured after the deduction of the amount of deposit insurance. OCGA Section 45-8-11 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 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,

- 11 -

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1995

EXHIBIT"D"

Note 2: DEPOSITS

(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 and 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, 1995, the bank balances were $539,642.55. The amounts of the total bank balances are classified into three categories of credit risk:

Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the 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 institutiQn, or by its trust department or agent but not in the Board's name.)

The Board's deposits are classified by risk category at June 30, 1995, as follows:
Risk Category 1 2 3 Total
Note 3: NON-MONETARY-TRANSACTIONS

Bank Balance
$ 215,532.54 324,110.01 0.00
$ 539,642.55

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: RISK MANAGEMENT

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 illnesses or injuries to employees; natural disaster; and unemployment compensation.

- 12 -

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1995

EXHIBIT"D"

Note 4: RISK MANAGEMENT

The Board has obtained commercial insurance for risk of loss associated with torts, assets, errors and omissions, job related illnesses and injuries, 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 ofthe past three years.

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

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

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

1994 1995

$

0.00 $ 1,845.08 $ 1,845.08 $

0.00

$

0.00 $

313.55 $

313.55 $

0.00

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The City of Jefferson Board of Education has entered into various lease agreements as lessee for buses and 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.

The changes in General Long-Term Debt during the fiscal year ended June 30, 1995, were as follows:

Capital Leases

Balance July 1, 1994 Additions

$ 303,033.26
o. oo

Deletions

39,092.89

Balance June 30, 1995

$ 263 940.37

At June 30, 1995, payments due, by fiscal year which includes principal and interest for these items are as follows:

- 13 -

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1995

EXHIBIT"D"

Note 5: GENERAL LONG-TERM DEBT

Fiscal Year Ended June 30

Capital Leases

1996 1997 1998 1999 2000 2001 and thereafter

$ 51,459.30 51,459.30 51,459.30 41,116.92 41,116.92
112,394.35

Total Principal and Interest

$ 349,006.09

Deduct: Imputed Interest

85,065.72

Net Present Value ofFuture Minimum Lease Payments

$ 263,940.37

Note 6: 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.

The Board is a defendant in a legal proceeding pertaining to employment. The ultimate disposition of this proceeding is not presently determinable, but is not believed to be material to the general purpose financial statements.

Note 7: 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 public employee retirement system (PERS).

TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. A member is eligible for service retirement after 30 years of creditable service, regardless ofage, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service and attainment of age 55, at a reduced benefit. Retirement benefits paid to members are equal to 2% of the average of the member's two consecutive highest paid years of service

- 14 -

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1995

EXHIBIT"D"

Note 7: RETIREMENT PLANS
multiplied by the number of years of creditable service up to 40 years. The normal retirement pension is payable monthly for life. Options are available for distribution of the member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
Retirement benefits also include death and disability benefits. A disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The death benefit is the amount that would be payable to the member's beneficiary had the member retired on the date of death on either a service retirement allowance or a disability retirement allowance, whichever is larger. The benefit is based on the member's creditable service (minimum of 10 years of service) and compensation up to the time of disability or death.
Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting ofemployer contributions occurs, but the member's contributions are refunded with interest.
The Board's payroll for employees covered byTRS for the year ended June 30, 1995, was $2,803,321.54; total payroll was $3,109,230.63.
TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe 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 ofTrustees in accordance with State statute and as advised by their independent actuary. For fiscal year 1995 that rate for employer contributions was 11.81%. The interest rate assumption (rate of return on investments) was 7.50%.
Total contributions made during fiscal year 1995 amounted to $471,239.36 of which $331,072.62 was made by the Board and $140,166.74 was made by employees. These contributions represented 11.81 % (Board) and 5% (employees) of covered payroll.
TRS FUNDING STATUS AND PROGRESS The amount of the total pension benefit obligation is based on a standardized measurement established by Statement No. 5 ofthe Governmental Accounting Standards Board (GASB) that, with some exceptions, must be used by a PERS. The standardized measurement is the actuarial present value of credited projected benefits. This valuation method reflects the present value of estimated pension benefits that will be paid in future years as a result of employee services performed to date, and is adjusted for the effects of projected salary increases. A standardized measure ofthe pension benefit obligation was adopted by the GASB to enable readers of PERS financial statements to assess that PERS funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among other PERS and among other employers.
Total unfunded pension benefit obligation ofTRS as of June 30, 1994, was as follows:

- 15 -

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 1995

EXHIBIT"D"

Note 7: RETIREMENT PLANS

Total pension benefit obligation

$15,313,743,000.00

Net assets available for benefits, at cost

14,254,785,000.00

Unfunded pension benefit obligation

$ 1.058,958.000.00

The measurement ofthe total pension benefit obligation is based on an actuarial valuation as of June 30, 1994. Net assets available to pay pension benefits were valued as of the same date. TRS does not make separate measurements of assets and pension benefit obligation for individual employers.

Total contributions from all employers to TRS for fiscal year ended June 30, 1995 were $565,117,811.00. The Board's contribution for the year ended June 30, 1995 of $331,072.62 was actuarially determined and represented .0585% of total contributions made by all participating employers.

Ten year historical trend information is presented in the 1995 TRS Component Unit Financial Report. This information is useful in assessing TRS's accumulation of sufficient assets to pay pension benefits as they become due.

PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA (PSERS)

PSERS PLAN DESCRIPTION Substantially all bus drivers, maintenance, custodial, and lunchroom personnel employed by local school systems are covered by the Public School Employees Retirement System of Georgia (PSERS). All employer's contributions are made by the State of Georgia in accordance with State statute.

PSERS provides in accordance with State statute service retirement, disability retirement and survivors benefits for its members. A member is eligible for normal service retirement after 10 years of service and attainment ofage 65. A member applying for service retirement with 10 years of service and retires between the ages of 60 and 65 receives a reduced benefit. Monthly retirement benefits paid to members are equal to $8.00 per month multiplied by the number ofyears of creditable service. Options are available for distribution ofthe member's monthly pension at a reduced rate to a designated beneficiary on the member's death.

Retirement provisions include death and disability benefits. Disability benefits are the same as if the employee had retired at age 65 as long as the employee has 15 or more years of creditable service. Death benefits are dependent upon the number ofyears of service. Ifthere are less than ten years of service, a lump sum refund ofthe employee's contributions and interest are made to the beneficiary. Ifthere are more than ten years of service, the beneficiary shall receive for life half ofwhat the employee would have received upon retirement.

Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting ofemployer contributions occurs, but the member's contributions are refunded with interest.

There were 21 employees covered under PSERS for the year ended June 30, 1995.

- 16 -

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1995

EXHIBIT"D"

Note 7: RETIREMENT PLANS
PSERS CONTRIBUTIONS REQUIRED AND MADE Covered employees are required by State statute to contribute $4.00 a month for the nine month school year. Unlike TRS, the Board makes no contribution to PSERS. The State of Georgia is required by statute to make employer contnbutions actuarially determined and approved and certified by the PSERS' Board of Trustees. Total contributions from employees ofthe Board made during fiscal year 1995 amounted to $752.00. Total contribution for all school systems made by the State of Georgia to PSERS for fiscal year ended June 30, 1995, was $9,162,000.00.
Note 8: SURETY BONDS
The School Superintendent, Mr. Herbert W. Garrett, is bonded in the amount of $50,000.00 with the Selective Insurance Company of America, Branchville, New Jersey, their Bond No. B701575, on which premium was paid through July I, 1995.

- 17 -

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY COMBINING BALANCE SHEET SPECIAL REVENUE FUND
JUNE 30. 1995

ASSETS
Cash and Cash Equivalents
Accounts Receivable
Inventories Food Donated Commodities Purchased Food

ELEMENTARY AND SECONDARY

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

CHAPTER 1 EDUCATION OF
DEPRIVED CHILDREN

CHAPTER2 BLOCK GRANT FLOW THROUGH

$ 144,668.76 $

82.10 $

15,973.83 $

531.36

1,246.80

8,312.71 953.96

Total Assets

$ 155,182.23 $

82.10 $

15,973.83 $ _ _ _ _53_1_.36_

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Continuation of Federal Programs For Expired Grant Balances/Questioned Costs For Inventories Food Donated Commodities Purchased Food
Unreserved Undesignated
Total Fund Equity

$

3,256.88

18,498.52

$ 21,755.40

$

$

8,312.71

953.96

$

9,266.67 $

124,160.16 $ 133,426.83 $

$

4,349.28 $

4,847.66

6,776.89

$

15,973.83 $

82.10

82.10
0.00 $ 82.10 $

0.00 $ 0.00 $

531.36 531.36
0.00 0.00

Total Liabilities and Fund Equity

$ 155,182.23 $

82.10 $

15,973.83 $ _ _ _ _5_3_1._36_

See notes to the general purpose financial statements.

-18 -

EXHIBIT"E"

EDUCATION ACT TITLE II-
EISENHOWER MATHEMATICS AND SCIENCE
EDUCATION

INDNIDUALS WITH

DISABILITIES EDUCATION ACT

TITLE VI, B

FLOW

PRESCHOOL

THROUGH

PROGRAM

TOTALS JUNE 30, 1995 JUNE 30, 1994

$

1,607.98 $ 2,680.90 $

0.00 $ 165,544.93 $ 184,148.17

2,753.48

4,000.26

80,898.23

8,312.71 953.96

7,632.24 642.72

$

1,607.98 $ 5,434.36 s _ _ _ _ _o_.oo_s 11s,s11.ss s 273,321.36

$

1,607.98 $ 1,794.36

3,640.00

$

1,607.98 $ 5,434.36

$ 29,661.89

$ 11,539.86

35,791.31

26,986.18

25,688.10

6,TT6.89

1,574.50

70,242.20

$ 45,302.93 $ 162,958.00

$

164.70

$

82.10

8,312.71 953.96

7,632.24 642.72

$

9,348.TT $

8,439.66

$

0.00 $

0.00 $

0.00

124,160.16

101,923.70

$

0.00 $

0.00 $

0.00 $ 133,508.93 $ 110,363.36

$

1,607.98 $

5,434.36 $ _ _ _.....,o_.oo_ s 11s.s11.ss $ 213,321.36

- 19-

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 1995

REVENUES
State Funds Federal Funds Local and Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration Maintenance and Operation of Plant Central Support Services
Community Services
Food Services Operation
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

ELEMENTARY AND SECONDARY

LOTTERY PROGRAMS

CHAPTER 1 EDUCATION OF
DEPRIVED CHILDREN

CHAPTER2 BLOCK GRANT FLOW THROUGH

$ 23,528.00 $ 166,106.53 138,219.53
$ 327,854.06 $

87,197.00 $
87,197.00 $

46,554.93 $ 46,554.93 $

5,656.00 5,656.00

$ 97,536.62 $

$

280.53

40,939.98 $
3TT.09 2,500.00 2,737.86

5,083.27
564.37 8.36

305,337.07 $ 305,617.60 $ 97,536.62 $ $ 22,236.46 $ -10,339.62 $

46,554.93 $ 0.00 $

5,656.00 0.00

10,421.72

$ 22,236.46 $ 110,198.66

82.10 $

680.47 311.24

0.00 $

0.00

$ 133,426.83 $

82.10 $

0.00 $ _ _ _ _ _0_.00_

See notes to the general purpose financial statements.

-20-

EXHIBITF"

EDUCATION ACT TITLE II-
EISENHOWER MATHEMATICS AND SCIENCE
EDUCATION

INDIVIDUALS WITH

DISABILITIES EDUCATION ACT

TITLEVI, B

FLOW

PRESCHOOL

THROUGH

PROGRAM

TOTALS YEAR ENDED JUNE 30, 1995 JUNE 30, 1994

$

7,000.00 $

s___1__,_ 000_.oo_ s

58,084.00 $

$ 8,400.00

58,084.00 $ _ _ _8__,4_00_.00_$

110,725.00 $ 291,801.46 138,219.53
540,745.99 $

99,482.00 278,142.92 138,436.24
516,061.16

$

6,518.34 $

46,098.63

$ 196,176.84 $ 164,647.61

633.45 12.91

4,329.27
3,500.64
3,928.25 $ 227.21

8,400.00

4,706.36 3,697.82 6,540.30
12,328.25 227.21
305,337.07

3,096.26
6,749.31 21,243.40
6,672.89 165.96
279,351.10

$

7,164.70 $

58,084.00 $

8,400.00 $ 529,013.85 $ 481,926.53

$

-164.70 $

0.00 $

0.00 $

11,732.14 $

34,134.63

$

-164.70 $

164.70

0.00 $

------ ----- $

0.00 $

0.00 $

10,421.72

0.00 $

22,153.86 $ 110,363.36

34,134.63 78,466.01

680.47 311.24

-1,766.95 -470.33

0.00 $ 133,508.93 $ 110,363.36

- 21 -

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30. 1995

ASSETS Cash and Cash Equivalents Accounts Receivable
Total Assets

GEORGIA STATE FINANCING

AND INVESTMENT COMMISSION

PROJECT

PROJECT

91-nS-On

TOTALS JUNE 30, 1995 JUNE 30, 1994

$

5,453.45 $

3,137.85 $

8,591.30 $

8,591.30

2,815.00

$

sr453.45 $

3,137.85 $

8,591.30 $ _ _ _11_,406......,..3..0..

LIABILITIES AND FUND EQUITY LIABILITIES
Cash Overdraft FUND EQUITY
Fund Balances Reserved
For State Capital Outlay Projects
Unreserved Undesignated Total Fund Equity
Total Liabilities and Fund Equity

$ ___2.....e_1_s_.oo_

$

5,453.45 $

3,137.85$

8,591.30 $

8,591.30

0.00

0.00

0.00

0.00

$

5,453.45 $

3,137.85 $

8,591.30 $ _ _ _8""",5"""9'-1_._3_0_

$

5,453.45 $

3,137.85 $

8,591.30 $ _ _ _11_,,406.....,.,_.30,...

See notes to the general purpose financial statements.

-22-

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 1995

EXHIBIT"H"

REVENUES None Recorded
EXPENDITURES None Recorded
Exeess of Revenues over (under) Expenditures FUND BALANCE JULY 1
FUND BALANCE JUNE 30

GEORGIA STATE FINANCING

AND INVESTMENT COMMISSION

PROJECT

PROJECT

91-779-077

779-002

TOTALS YEAR ENDED JUNE 30, 1995 JUNE 30, 1994

$

0.00 $

0.00 $

0.00 $

0.00

$

0.00 $

$

0.00 $

5,453.45

$

5,453.45 $

0.00 $ 0.00 $ 3,137.85

0.00 $ 0.00 $ 8.591.30

0.00 0.00 8,591.30

3,137.85 $

----- 8,591.30 $

8,591.30

See notes to the general purpose financial statements.

-23-

CITY OF JEFFERSON BOARD OF EDUCATION JACKSON COUNTY SCHEDULE OF FEDERAL ffNANCJAL ASSISTANCE YEAR ENDED JUNE 30. 1995

SCHEDULE "1"

FUNDING AGENCY
PROGRAM/GRANT
Agriculture, U. S. Department ol Through Georgia Department ol Education Food and Nutrition Program Food Sefvice6 School Breakfast Program 1995Grant National School Lunch Program 1994Grant 1995Grant Food Dislribution Program (1)
Total U. S. Department ol AgricuHure
Education, U. S. Department ol Through Georgia Department ol Education Elementary and Secondary Education Act Chapter 1 Education of Deprived Children 1993 Regular 1993 Carry-Over 1994 Regular 1995 Regular Chapter2 Block Grant Flow Through 1994 Regular 1995 Regular Tille II Eisenhower Mathematics and Science Education 1994 Regular 1995 Regular Individuals Yolith Disabilities Education Act TilleVl,B Flow Through 1994 Regular 1994 Carry-Over 1995 Regular Innovative Program 1994 Regular 1994 Carry-Over Preschool Program 1994 Regular 1995 Regular Through Northeast Georgia Regional Educational Service Agency Vocational Education - Basic Grants to States High School Program Basic Grant 1995Grant
Total U. S. Department of Education

CFDA NUMBER

AWARDS IN PERIOD

FEDERAL FUNDS RECEIVED IN PERIOD(NET OF REFUNDS)

FEDERAL REVENUE IN PERIOD

EXPENDITURES INPERIOD

10.553 $
10.555 10.555 10.550
$

29,693.57 $
112,542.87 23,870.09 166,106.53 $

29,693.57 $
1,028.74 111,296.07 NIA
142,018.38 $

29,693.57
112,542.87 $ 23,870.09 166,106.53 $

(2)
281,747.51 (3) 23,870.09 305,617.60

84.010 84.010 $ 84.010 84.010

$ 2,755.00
59,776.00

84.151 84.151

5,656.00

84.164 84.164

7,000.00

84.027 84.027 84.027
84.027 84.027
84.173 84.173

786.00 47,538.00
9,760.00
8,400.00

1,746.58 2,755.00 $ 6,341.00 50,576.82

2,755.00 $ 43,799.93

2,875.19 5,656.00

5,656.00

2,755.00 43,799.93
5,656.00

1,229.00 7,000.00

7,000.00

164.70 7,000.00

20,683.73 786.00
44,784.54
13,121.29 9,760.00
1,169.00 8,400.00

786.00 47,538.00
9,760.00
8,400.00

786.00 47,538.00
9,760.00
8,400.00

84.048

3,525.25 _ _ _ _3;:;.,.=.:52:.:5.::.2"'-5

3,525.25

3,525.25

$ 145,196.25 $

180 409.40 $ 129,220.18 $ _ _~12=9.._,384~-~88~

Total Federal Financial Assistance

$ 311,302.78 $

322,427.78 $ 295,326.71 $-~=4=35=,00==2-=48=

The Board had no major programs as defined by the Single Audit Act of 1984.
(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 1995 National School Lunch Program.
(3) Expenditures for this program include State, and/or Local and Other Funds. Expenditures are not maintained by fund source.

See notes to the general purpose financial statements.

24

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY CASH AND CASH EQUIVALENTS JUNE 30, 1995

SCHEDULE "2"

INTEREST BEARING ACCOUNTS
First Commerce Bank, Commerce, Georgia
N.O.W. Accounts (2.25%)
First National Bank of Jackson County, Jefferson, Georgia
N.O.W. Account (2.35%)
Southtrust Bank of Georgia, Atlanta, Georgia
N.O.W. Account (5.90%)

$ 144,668.76 112,079.17 15,000.00
$ 271,747.93

See notes to the general purpose financial statements. - 25 -

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY ACCOUNTS RECEIVABLE JUNE 30, 1995

SCHEDULE "3"

City of Commerce Board of Education Shared Services
Education, Georgia Department of Food Services National School Lunch Program Other State Program Summer School Grades 4-8 Federal Funds Individuals with Disabilities Education Act Title VI, B - Flow Through
Jefferson, City of City Wide School Tax
Jefferson School System Foundation Reimbursement for Salaries and Benefits

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

2,695.09

$

2,695.09

$ 2,893.68
71,008.46 2,128.26

1,246.80 2,753.46

1,246.80 2,893.68 2,753.46 71,008.46 2,128.26

$

78,725.49 $

4,000.26 $ ===8=2,=72=5=.7=5

See notes to the general purpose financial statements.

- 26 -

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 1995

SCHEDULE "4"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Quality Basic Education General and Career Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Special Instructional Assistance In-School Suspension School Counselors Grades 4 and 5 Superintendent Base Salary Midterm Adjustment Local Fair Share Educational Equalization Funding Grant Food Services Vocational Education Other State Programs Mentor Teacher Program Pre-School Handicapped Program Remedial Summer School Program Summer School Grades 4-8 Teachers' Retirement Lottery Programs Algebra Classrooms Instructional Technology Distant Learning Media Center and Library Equipment Safe Schools Grant
OTHER Education, Georgia Department of Reimbursement for Student Information Systems Project

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 1,847,378.00 377,388.00 13,628.00 80,147.00 23,030.20 534,843.00
28,459.00 7,708.00
65,278.00 35,573.00 19,971.00 19,978.00 124,056.00 -255,862.00 283,756.00
$
1,156.00
6,900.00 12,745.00
940.72 2,495.06 2,786.82

$ 1,847,378.00 377,388.00 13,628.00 80,147.00 23,030.20 534,843.00

23,528.00

28,459.00 7,708.00
65,278.00 35,573.00 19,971.00 19,978.00 124,056.00 -255,862.00 283,756.00 23,528.00
1,156.00

6,900.00 12,745.00
940.72 2,495.06 2,786.82

220.60 13,954.50
3,000.30 26,525.00 43,496.60

220.60 13,954.50
3,000.30 26,525.00 43,496.60

1,000.00

1,000.00

$ 3,233,354.80 $

110,725.00 $ 3,344,079.80

See notes to the general purpose financial statements. - 27 -

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF LOCAL AND OTHER REVENUE YEAR ENDED JUNE 30, 1995

SCHEDULE "5"

City Wide School Tax City of Jefferson
Other After School Program Fees Donations Jefferson School System Foundation Interest Earned Sales Lunches and Breakfasts School Assets Shared Service Contributions City of Commerce Board of Education Jackson County Board of Education Other

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 787,138.08

$ 787,138.08

24,952.50
6,636.59 3,702.44 $
10,000.00
76,736.43 74,269.22
3,820.94

3,094.11 135,125.42

24,952.50
6,636.59 6,796.55
135,125.42 10,000.00
76,736.43 74,269.22
3,820.94

$ 987,256.20 $ 138,219.53 $ 1,125,475.73

See notes to the general purpose financial statements. - 28 -

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF EXPENDITURES BY OBJECT GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 1995

SCHEDULE "6"

EXPENDITURES
Operating Costs Salaries Employee Benefits Travel of Employees Professional and Technical Services Compensation and Travel of Board Members Water, Sewer and Cleaning Services Repair and Maintenance Services Rents Insurance Communications Commodity Hauling Shared Services Other Purchased Services Supplies Energy Food Usage Books, Textbooks and Periodicals Dues and Fees Interest Expense Other Expenditures
Nonoperating Costs Principal and Interest Equipment

GENERAL FUND

SPECIAL REVENUE
FUND

TOTAL

$ 2,944,589.23 $ 598,843.31 6,594.99 22,649.52 4,237.39 16,125.82 73,939.31 10,295.77 53,311.00 17,527.05
23,042.00 34,349.02 98,760.86 121,266.82
16,165.12 7,761.36 3,552.98 1,198.67

164,641.40 $ 31,846.86 2,286.47 3,047.50
47,960.99
666.51 1,629.50 3,330.24 8,697.00 32,659.18
147,730.77 122.10
1,572.40

3,109,230.63 630,690.17 8,881.46 25,697.02 4,237.39 16,125.82 121,900.30 10,295.77 53,311.00 18,193.56 1,629.50 26,372.24 43,046.02 131,420.04 121,266.82 147,730.77 16,287.22 9,333.76 3,552.98 1,198.67

61,933.91 13,354.15

82,822.93

61,933.91 96,177.08

Total Expenditures

$ 4,129,498.28 $ 529,013.85 $ 4,658,512.13

See notes to the general purpose financial statements. - 29 -

EXPENDITURES Operating Costs Repairs and Maintenance Supplies Nonoperating Costs Equipment
Total Expenditures

CITY OF JEFFERSON BOARD Of EDUCATION JACKSON COUNTY
SCHEDULE OF EXPENDITURES BY OBJECT
LOTTERY PROGRAMS YEAR ENDED JUNE 30. 1995

SCHEDULE '7"

ALGEBRA CLASSROOMS

INSTRUCTIONAL TECHNOLOGY

DISTANT LEARNING

MEDIA CENTER AND
LIBRARY EQUIPMENT

SAFE SCHOOLS
GRANT

TOTAL

$

309.00

$

3,346.53

$ 43,496.60 $

43,496.60 3,655.53

$

23,837.50

$

26,546.99

50,384.49

$

309.00 $

231837.50 $

31346.53 $

26,546.99 $

431496.60 $

971536.62

See notes to the general purpose financial statements.

30

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 1995

SCHEDULE "8"

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

THIRTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF THIRTEEN WEIGHTED PROGRAMS

$ 2,419,476.00 $

71,306.00

$ 2,569,274.35

--------- 130,424.38 $

115,429.63

$ 2,699,698.73

32,692.01 $ 2,667,006.72

$

0.00 $

0.00

======

See notes to the general purpose financial statements. - 31 -

CITY OF JEFFERSON BOARD OF EDUCATION JACKSON COUNTY
ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS BY PROGRAM
GENERAL FUND QUALITY BASIC EDUCATION PROGRAMS
YEAR ENDED JUNE 30 1995

GEN!IBAL AND ~REER EDUCATIQt:1 PROGRAMS
Kindelgarten (1 Grades 1 3 M
Sub-Total K-3
Grades 4 5 M Grades 6 8 M
Grades 9 - 12 (") High School Laboratories (") Vocational Education Laboratories (")
Total General and career Education Programs SPECIAL EDUCATION PROGRAMS
Regular Programs category I (") category 11 (") category Ill (") category IV (*) Itinerant Supplemental Speech Sub-Total Regular category V (Gifted) (") Total Special Education Programs
REMEDIAL EDUCATION PROGRAM (j Total Thirteen Weighted Programs
MEDIA CENTER PROGRAMS Salaries Operations Total Media Center Programs
Total Thirteen Weighted and Media Center Programs
STAFF DEVELOPMl;;NT PROGRAMS (1) Cost of Instruction Professional Development
Total Staff Development (") Identifies Thirteen Weighted Programs.
(1) The minimum expendijure requirement was reduced by $2,312.00
which was refunded to the Georgia Department of Education
subsequent to June 30, 1995.
See notes to the general purpose financial statements.

AUOTMENTS FROM DEPARTMENT OF EDUCATION

REQUIRED

ORIGINAL

%

ORIGINAL

MID-TERM

$

208,331.00

$

187,497.90 $

552.127.00

496,914.30

$

760,458.00 90 $

684,412.20 $

247,645.00 90

222,880.50

415,682.00 90

374,113.80

168,871.00 90

151,983.90

190,359.00 90

171,323.10

64,363.00 90

57,926.70

$ 1,847,378.00

$ 1,662,640.20 $

0.00 -26,391.00 -26,391.00
33,546.00
62,197.00 69,352.00

$

368,268.00

$

331,441.20 $

14,054.00

$

368,268.00 90 $

331,441.20 $

9,120.00 90

8,208.00

$

377,388.00

$

339,649.20 $

$

13,628.00 90 $

12,265.20 $

$ 2,238,394.00

$ 2,014,554.60 $

14,054.00 8,784.00 22,838.00 8,745.00 100,935.00

$

63,737.00 90 $

57,363.30 $

0.00

16,410.00 90

14,769.00

$

80,147.00

$

72,132.30 $

0.00

$ 2,318,541.00

$ 2,086,686.90 $

100,935.00

$

5,961.00

$

5,961.00 $

0.00

17,069.20

17,069.20

0.00

$

23,030.20 100 $

23,030.20 $

0.00

32

SCHEDULE"9"

TOTAL REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$

187,497.90 $

181,442.45 $

4,519.14 $

185,961.59

470,523.30

474,132.74

13,324.30

487,457.04

$

658,021.20 $

655,575.19 $

17,843.44 $

673,418.63 $

0.00

222,880.50

291,563.32

8,879.50

300,442.82

0.00

374,113.80

382,134.96

13,994.16

396,129.12

0.00

185,529.90

296,684.87

11,111.81

307,796.68

0.00

171,323.10

199,664.93

9,094.82

208,759.75

0.00

120,123.70

152,715.30

13,794.32

166,509.62

0.00

$ 1,731,992.20 $ 1,978,338.57 $

74,718.05 $ 2,053,056.62

0.00

$

345,495.20

$

46,550.30 $ 123,228.12 257,772.65 22,822.60

1,659.52 $ 31,564.45
4,493.44 1,085.92
241.00 433.00

48,209.82 154,792.57 262,266.09 23,908.52
241.00 433.00

$

345,495.20 $

450,373.67 $

39,477.33 $

489,851.00

0.00

16,992.00

18,604.92

752.76

19,357.68

0.00

$

362,487.20 $

468,978.59 $

40,230.09 $

509,208.68

$

21,010.20 $

24,112.93 $

481.49 $

24,594.42

0.00

$ 2,115,489.60 $ 2,471,430.09 $

115,429.63 $ 2,586,859.72

$

57,363.30 $

97,844.26

$

97,844.26

0.00

14,769.00

$

14,994.75

14,994.75

0.00

$

72,132.30 $

97,844.26 $

14,994.75 $

112,839.01

$ 2,187,621.90 $ 2,569,274.35 $

130,424.38 $ 2,699,698.73 $

0.00

$

5,961.00

17,069.20

$

23,030.20 $

$

13,880.20 $

13,880.20

9,150.00

9,150.00

0.00 $

23,030.20 $

23,030.20 s_______o_.oo_

33

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF COMPENSATION AND TRAVEL OF BOARD MEMBERS
YEAR ENDED JUNE 30, 1995

SCHEDULE "10"

BOARD MEMBER ADDRESS
Mr. Ronald K. Hopkins, Chairman (*) P.O.Box429 Jefferson, Georgia 30549
Mr. Mark Arnold (*) 2146 Athens Highway Jefferson, Georgia 30549
Mrs. Guy Dean Benson (*) 90 Deerwood Lane Jefferson, Georgia 30549
Mr. Derrell Crowe (*) 1315 Old Swimming Pool Road Jefferson, Georgia 30549
Mr. Willie L. Hughey (*) 500 Martin L. King, Jr. Drive Jefferson, Georgia 30549
Mr. Horace Jackson (*)
P. 0. Box396
Jefferson, Georgia 30549

COMPENSATION

TRAVEL

$

825.00 $

466.39

550.00

550.00

49.00

550.00

49.00

550.00

49.00

550.00

49.00

$

3,575.00 $

662.39

======

(*) Denotes Board Members Serving as of June 30, 1995

See notes to the general purpose financial statements.

- 34 -

SECTION II COMPLIANCE

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 6, 1996

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe City ofJefferson Board ofEducation
COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the City of Jefferson Board of Education as of and for the year ended June 30, 1995, and have issued our report thereon dated February 6, 1996_ This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements_
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement.
Compliance with laws, regulations, contracts, and grants applicable to City of Jefferson Board ofEducation is the responsibility ofthe Board's management. As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we performed tests of the Board's compliance with certain provisions oflaws, regulations, contracts, and grants. However, the objective of our audit of the financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance that are required to be reported herein under Government Auditing Standards.

95CRL-10

This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,

CLV:jy 95CRL-10

Claude L. Vickers State Auditor

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 6, 1996

Honorable Zell Miller, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe City ofJefferson Board ofEducation

SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS

Ladies and Gentlemen:

We have audited the general purpose financial statements of the City of Jefferson Board ofEducation as of and for the year ended June 30, 1995, and have issued our report thereon dated February 6, 1996. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

We have applied procedures to test the City of Jefferson Board of Education's compliance with the following requirements applicable to each of its Federal financial assistance programs, which are listed in the Schedule of Federal Financial Assistance, for the year ended June 30, 1995:

(I) Political Activity

(5) Allowable Costs/Cost Principles

(2) Civil Rights

(6) Audit Follow-Up/Resolution

(3) Cash Management

(7) Administrative Requirements

(4) Federal Financial Report

Our procedures were limited to the applicable procedures described in the Office of Management and Budget's "Compliance Supplement for Single Audits of State and Local Governments" and other additional procedures as deemed necessary. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Board's compliance with the requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion.

95CRL-50

With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph of this report. With respect to items not tested, nothing came to our attention that caused us to believe that the City ofJefferson Board ofEducation had not complied, in all material respects, with those requirements. However, the results of our procedures disclosed immaterial instances ofnoncompliance with those requirements, which are described in the Schedule ofFindings and Improper or Questioned Costs.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,

CLV:jy 95CRL-50

Claude L. Vickers State Auditor

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 6, 1996

Honorable Zell Miller, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe City ofJefferson Board ofEducation

SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS

Ladies and Gentlemen:

We have audited the general purpose financial statements of the City ofJefferson Board ofEducation as of and for the year ended June 30, 1995, and have issued our report thereon dated February 6, 1996. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

In connection with our audit of the fiscal year 1995 general purpose financial statements of the City of Jefferson Board of Education and with our consideration of the Board's control structure used to administer Federal financial assistance programs, as required by Office ofManagement and Budget (0MB) Circular A128, "Audits of State and Local Governments", we selected certain transactions applicable to certain nonmajor Federal financial assistance programs for the year ended June 30, 1995. As required by 0MB Circular A-128, we have performed auditing procedures on the selected transactions to test compliance with the requirements governing:

(1) Types of Services Allowed or Unallowed

(3) Applicable Special Tests and Provisions

(2) Eligibility

Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the City ofJefferson Board ofEducation's compliance with these requirements. Accordingly, we do not express such an opinion.

95CRL-120

With respect to the items tested, the results of those procedures disclosed no material instances of
noncompliance with the requirements listed in the second paragraph. With respect to items not tested, nothing
came to our attention that caused us to believe that the City ofJefferson Board of Education had not complied,
in all material respects, with those requirements.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter ofpublic record.
Respectfully submitted,

CLV:jy 95CRL-120

Claude L. Vickers State Auditor

SECTION III INTERNAL CONTROL

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 6, 1996

Honorable Zell Miller, Governor Me~bers of the General Assembly Members of the State Board ofEducation
and Superintendent and Members ofthe City ofJefferson Board ofEducation
REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the City of Jefferson Board ofEducation as of and for the year ended June 30, 1995, and have issued our report thereon dated February 6, 1996. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
We conducted our audit in accordance with generally accepted auditing standards, and 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 general purpose financial statements are free of material misstatement.
The management of the City of Jefferson Board ofEducation is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives ofan internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation ofgeneral purpose financial statements in accordance with generally accepted accounting principles. Because ofinherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate.
95ICL-3

In planning and perfonning our audit ofthe general purpose financial statements of the City of Jefferson Board ofEducation for the year ended June 30, 1995, we obtained an understanding of the internal control structure. With respect to the internal control structure, we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk in order to detennine our auditing procedure for the purpose of expressing our opinion on the general purpose financial statements and not to provide an opinion on the internal control structure. Accordingly, we do not express such an opinion.
We noted certain matters involving the internal control structure and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the entity's ability to record, process, summarize, and report financial data consistent with the assertions of management in the general purpose financial statements.
As described in the Schedule ofFindings and Improper or Questioned Costs, reportable conditions were noted in the following control categories:
(1) Accounting Controls (Overall)
(2) General Fixed Assets
A material weakness is a reportable condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purpose financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions.
Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that both ofthe reportable conditions disclosed above are also considered to be material weaknesses.
These conditions were considered in determining the nature, timing, and extent of the procedures to be performed in our audit ofthe City of Jefferson Board ofEducation's financial statements and this report does not affect our report thereon dated February 6, 1996.
95ICL-3

This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,

CLV:jy 95ICL-3

~,,?:'~
Claude L. Vickers State Auditor

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 6, 1996

Honorable Zell Miller, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe City ofJefferson Board ofEducation
SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the City of Jefferson Board ofEducation as of and for the year ended June 30, 1995, and have issued our report thereon dated February 6, 1996. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
We conducted our audit in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and the provisions of Office of Management and Budget (0MB) Circular A-128, "Audits ofState and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement.
In planning and performing our audit for the year ended June 30, 1995, we considered the Board's internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the Board's general purpose financial statements and to report on the internal control structure in accordance with 0MB Circular A-128. This report addresses our consideration ofinternal control structure policies and procedures relevant to compliance with requirements applicable to Federal financial assistance programs. We have addressed internal control structure policies and procedures relevant to our audit of the general purpose financial statements in a separate report dated February 6, 1996.
The management of the City of Jefferson Board ofEducation is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives ofan internal control structure are to provide management with reasonable, but not absolute,
95ICL-16

assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are
executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles, and that Federal financial assistance programs are managed in compliance with applicable laws and regulations.
Because of inherent limitations in any internal control structure, errors, irregularities, or instances of noncompliance may nevertheless occur and not be detected. Also, projection ofany evaluation ofthe structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness ofthe design and operation of policies and procedures may deteriorate.

For the purpose of this report, we have classified the significant internal control structure policies and
procedures used in administering Federal financial assistance programs in the following control categories:

GENERAL REQUIREMENTS

SPECIFIC REQUIREMENTS

(1) Political Activity (2) Civil Rights (3) Cash Management (4) Federal Financial Reports

(1) Types of Services Allowed or Unallowed
(2) Eligibility
(3) Matching, Level of Effort, and/or Earmarking

(5) Allowable Costs/Cost Principles

(4) Reporting

(6) Audit Follow-Up/Resolution (7) Administrative Requirements

(5) Applicable Special Tests and Provisions
(6) Other Requirement Claims for Advances and Reimbursements

For all of the internal control structure categories listed above, we obtained an understanding of the design of relevant policies and procedures and determined whether they have been placed in operation, and we assessed control risk.

During the year ended June 30, 1995, the City ofJefferson Board of Education had no major Federal financial assistance programs and expended 54% of its total Federal financial assistance under the following nonmajor Federal financial assistance programs:

Food and Nutrition Program Food Services National School Lunch Program

Elementary and Secondary Education Act Chapter 1 - Education of Deprived Children

95ICL-16

We performed tests of controls, as required by 0MB Circular A-128, to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we considered relevant to preventing or detecting material noncompliance with general requirements and specific requirements as described above that are applicable to the aforementioned nonmajor Federal financial assistance programs. Our procedures were less in scope than would be necessary to render an opinion on these internal control structure policies and procedures. Accordingly, we do not express such an opinion.
We noted certain matters involving the internal control structure and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the Board's ability to administer Federal financial assistance programs in accordance with applicable laws and regulations.
As described in the Schedule ofFindings and Improper or Questioned Costs, reportable conditions were noted in the following control categories:
( 1) Administrative Requirements
(2) Cash Management
A material weakness is a reportable condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that noncompliance with laws and regulations that would be material to a Federal financial assistance program may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions.
Our consideration of the internal control structure policies and procedures used in administering Federal financial assistance would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, as described in the Schedule ofFindings and Improper or Questioned Costs, the following control category includes a reportable condition that is also considered to be a material weakness:
Administrative Requirements
This report is intended solely for the use ofmanagement, the Federal cognizant audit agency and other Federal grantor agencies and should not be used for any other purpose. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,

CLV:jy 95ICL-16

Claude L. Vickers State Auditor

SECTION IV FINDINGS AND IMPROPER OR QUESTIONED COSTS

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1995
PRIOR YEAR
AUDIT FOLLOW-UP/RESOLUTION Accounting/Internal Control Deficiencies Finding Resolved Audit Control Number 7791-93-02
The audit report for the year ended June 30, 1994, noted weaknesses in internal controls and deficiencies in the Board's accounting system related to journal entries. For the year under review, the Board implemented procedures to correct deficiencies relating to journal entry authorization, documentation and explanation.
AUDIT FOLLOW-UP/RESOLUTION Failure to Meet Expenditure Requirements Financial Statements Amount: $1,219.82 Audit Control Number 7791-93-05
The audit report for the year ended June 30, 1993, reported that the Board had an underexpenditure of Quality Basic Education (QBE) funds of$1,219.82 for the salaries portion of the Special Education - Gifted Program. For the year under review, no adjustment was made to the Board's local fair share by the Georgia Department of Education to refund this underexpenditure as required. The underexpenditure of $1,219.82 should be returned to the Georgia Department ofEducation through an increase in the Board's local fair share for the QBE programs in a subsequent fiscal period.
AUDIT FOLLOW-UP/RESOLUTION Failure to Meet Expenditure Requirements Financial Statements Amount: $5,457.10 Audit Control Number 7791-93-06
The audit report for the year ended June 30, 1993, reported that the Board had an underexpenditure of Quality Basic Education (QBE) funds of $5,457.10 for the StaffDevelopment - Professional Development Stipends Program. For the year under review, no adjustment was made to the Boards's local fair share by the Georgia Department of Education to refund this underexpenditure as required. The underexpenditure of $5,457.10 should be returned to the Georgia Department ofEducation through an increase in the Board's local fair share for the QBE programs in a subsequent fiscal period.

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1995
PRIOR YEAR
AUDIT FOLLOW-UP/RESOLUTION Payroll Reporting Financial Statements Finding Resolved Audit Control Number 779-93-07
The audit report for the year ended June 30, 1994, noted that the City ofJefferson Board ofEducation had made payments for Sick Leave Incentive Pay and for Honoraria without making payroll deductions and failed to include these payments on the employees W-2 statement. In the year under review, the Board implemented procedures to process such payments through the payroll system to ensure that the appropriate payroll deductions are made and that these payments are properly reported on W-2's as required by State and Federal laws and regulations.
AUDIT FOLLOW-UP/RESOLUTION Uncollateralized Deposits Financial Statements Finding Resolved Audit Control Number 7791-94-01
The audit report for the year ended June 30, 1994, reported that the Board failed to have its bank balances fully collateralized as provided for by the Official Code of Georgia Annotated Section 45-8-12. For the year under review, audit tests of the Board's bank balances indicated that the Board complied with the State laws governing collateralization of cash deposits.
AUDIT FOLLOW-UP/RESOLUTION Failure to Meet Expenditure Requirements Financial Statements Amount: $438.43 Audit Control Number 7791-94-02
The audit report for the year ended June 30, 1994, reported that the Board had an underexpenditure of Quality Basic Education (QBE) funds of$438.43 for the salaries portion of the General and Career Education Grades 6-8 Program. For the year under review, no adjustment was made to the Board's local fair share by the Georgia Department of Education to refund this underexpenditure as required. The underexpenditure of $438.43 should be returned to the Georgia Department ofEducation through an increase in the Board's local fair share for the QBE programs in a subsequent fiscal period.

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1995
PRIOR YEAR
AUDIT FOLLOW-UP/RESOLUTION Failure to Meet Expenditure Requirements Financial Statement Amount: $10,029.22 Audit Control Number 7791-94-03
The audit report for the year ended June 30, 1994, reported that the Board had an underexpenditure of Quality
Basic Education (QBE) funds of$10,029.22 for the StaffDevelopment - Professional Development Stipends Program. For the year under review, no adjustment was made to the Board's local fair share by the Georgia Department ofEducation to refund this underexpenditure as required. The underexpenditure of $10,029.22 should be returned to the Georgia Department ofEducation through an increase in the Board's local fair share for the QBE programs in a subsequent fiscal period.
PRIOR YEAR/CURRENT YEAR
ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation ofDuties Reportable Condition - Material Weakness Audit Control Number 7791-93-01
The audit report for the year ended June 30, 1994, stated that the Board did not provide for adequate separation of employee duties in the performance of accounting functions and related procedures for all funds. For the year under review, the Board made some improvement$ regarding separ~tion of employee's duties but still did not achieve an adequate degree of internal control. This deficiency was a result of management's decision to limit the number of administrative staff made responsible for accounting functions. Management should periodically review this decision to determine if employee duties can be reassigned to achieve a higher degree of internal control with existing staff.
Note: All Federal financial assistance programs listed in the Schedule ofFederal Financial Assistance, Schedule "1" of this report are affected by this finding.

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1995
PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 7791-93-03
The audit report for the year ended June 30, 1994, noted that the management of the City of Jefferson Board
ofEducation had chosen not to maintain a system wide General Fixed Assets Account Group within the formal
accounting records as required by generally accepted accounting principles. In the year under review, the Board did not establish a General Fixed Assets Account Group within the formal accounting records. This condition results in the general purpose financial statements of the Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the Board and should include but may not be limited to date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.
CURRENT YEAR
EXPENDITURES/I..JABILITIES/DISBURSEMENTS Unearned Lottery Funds Financial Statements Nonmaterial Noncompliance Amount: $82.10 Audit Control Number 7791-95-01
For the year under review, it was noted that the Board received $20.12 in Distant Learning Program funds and $61.98 in Media Center and Library Equipment funds in excess of the amount needed to cover program expenditures. These lottery fund balances were the result of the Board's failure to expend funds allotted by individual school. Accordingly, the Board should refund unearned lottery funds in the amount of$82.10 to the Georgia Department ofEducation.

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1995

CURRENT YEAR

CASH MANAGEMENT Excessive Cash Balances Federal Financial Assistance Reportable Condition Nonmaterial Noncompliance Audit Control Number 7791-95-02

A review of cash management procedures for the Elementary and Secondary Education Act - Education of deprived Children program (CFDA 84.010) disclosed that cash draws utilizing DE Form 0147, "Quarterly Report ofExpenditures and Estimated Requirements for Grant Funds", were made in advance of immediate cash needs, resulting in the accumulation of excessive cash balances. During fiscal year 1995, the program had an average cash balance of$ 2,298.38 with excessive ending monthly cash balances in five months. Procedures should be implemented to minimize the time elapsing between the transfer of funds from the Georgia Department ofEducation and disbursement of such funds by the board.

FEDERAL FINANCIAL REPORTS Delinquent Program Reports Federal Financial Assistance Nonmaterial Noncompliance Audit Control Number 7791-95-03

For the year under review, the Board failed to file final completion reports by the required filing date in accordance with regulations established by the Georgia Department of Education for the following programs:

Due Date Date Submitted

Elementary and Secondary Education Act Chapter 1 - Education for Deprived Children (CFDA 84.010) 1993 Carry-Over 1995 Regular Chapter 2 -Block Grant Flow Through (CFDA 84.151) 1995 Regular Individuals with Disabilities Education Act Title VI, B - Flow Through (CFDA 84.027) 1995 Regular Innovative Program 1994 Carry-Over Preschool Program (CFDA 84.173) 1995 Regular

10/30/94 09/30/95 09/30/95
09/30/95 09/30/95 09/30/95

07/31/95 10/04/95 10/04/95
10/04/95 10/04/95 10/04/95

Procedures should be implemented to ensure that final completion reports are filed in a timely manner as required.

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1995
CURRENT YEAR
ALLOWABLE COSTS/COST PRINCIPLES Expenditures Not in Compliance with Budget Federal Financial Assistance Nonmaterial Noncompliance Amount: $8,400.00 Audit Control Number 7791-95-04
The budget for the Federal Program, Individuals with Disabilities Education Act - Title VI, B - Preschool Program (CFDA 84.173) did not provide for expenditures to be charged to the Support Services - Central function. However, in the year under review, the Board charged $8,400.00 of expenditures to Support Services -Central function, without obtaining budget approval. As required by 34 CFR 8030 and the policies of the Georgia Department of Education, budget changes in excess of ten percent of the total budget must have prior approval ofthe awarding agency. The Georgia Department of Education should review this matter to determine allowability of these expenditures.

SECTIONV PERTINENT VIEWS OF RESPONSIBLE OFFICIALS

CITY OF JEFFERSON BOARD OF EDUCATION PERTINENT VIEWS OF RESPONSIBLE OFFICIALS
YEAR ENDED JUNE 30, 1994
AUDIT FOLLOW-UP/RESOLUTION Failure to Meet Expenditure Requirements Financial Statements Amount: $1,219.82 Audit Control Number 7791-93-05
We concurred with this finding in FY '93 and our FY '96 local fair share has been effected by this amount.
AUDIT FOLLOW-UP/RESOLUTION Failure to Meet Expenditure Requirements Financial Statements Amount $5,457.10 Audit Control Number 7791-93-06
We concurred with this finding in FY '93 and our FY '96 local fair share has been effected by this amount.
AUDIT FOLLOW-UP/RESOLUTION Failure to Meet Expenditure Requirements Financial Statements Amount: $438.43 Audit Control Number 7791-94-02
We concur with this finding and understand that the FY '97 local fair share will include this amount.
AUDIT FOLLOW-UP/RESOLUTION Failure to Meet Expenditure Requirements Financial Statement Amount: $10,029.22 Audit Control Number 7791-94-03
This questioned cost was a result of reliance of incorrect information received from the GDOE. We understand that a compromise has been reached where the amount will effect our local fair share but will be given back through another adjustment.
ACCOUNTING CONTROLS (OVERALL)-Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation ofDuties Reportable Condition - Material Weakness Audit Control Number 7791-93-01
We concur with this finding and also realize that this finding will repeat itselfuntil the Board of Education hires enough staff to meet separation of duties as required by audit standards.

CITY OF JEFFERSON BOARD OF EDUCATION PERTINENT VIEWS OF RESPONSIBLE OFFICIALS
YEAR ENDED JUNE 30, 1994
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 7791-93-03
We concur with this finding and understand that this finding will continue until a fixed assets account has been established.
EXPENDITURES/LIABILITIES/DISBURSEMENTS Unearned Lottery Funds Financial Statements Nonmaterial Noncompliance Amount: $82.10 Audit Control Number 7791-95-01
We concur with this finding and are prepared to refund this amount when requested by the Georgia Department ofEducation.
Note: The City of Jefferson Board of Education has elected not to provide comments for inclusion in this report other than the above.