Audit report, City of Jefferson Board of Education, a component unit of the City of Jefferson, Georgia, year ended June 30, 1997

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AUDIT REPORT CITY OF JEFFERSON BOARD OF EDUCAnON
A COMPONENT UNIT OF THE CITY OF JEFFERSON, GEORGIA
YEAR ENDED JUNE 30, 1997
STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET ATLANTA, GEORGIA 30334-8400

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 EXPENDITURES OF FEDERAL AWARDS

EXlllBITS

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

4

C

COMBINED 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

7

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

18

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

19

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

20

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

21

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

22

2 SCHEDULE OF STATE REVENUE

23

3 SCHEDULE OF EXPENDITURES

LOTTERY PROGRAMS

24

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

4

OVERALL

25

5

BY PROGRAM

26

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY - TABLE OF CONTENTS -
SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133
SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
March 18, 1998

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Jefferson Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general-purpose financial statements of the City of Jefferson Board of Education, a component unit of the City of Jefferson, Georgia, as of and for the year ended June 30, 1997, as listed in the table of contents. These general-purpose financial statements are the responsibility of the City of Jefferson Board of Education's management. Our responsibility is to express an opinion on these generalpurpose financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall 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.
97ARL-13

* School activity accounts maintained at the individual schools are not included in the general-purpose
fmancial 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, 1997, a portion of salaries
and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 1997. Also funds received, subsequent to June 30, 1997, from the Georgia Department of Education for the State's share ofthese 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, 1996, were improperly recorded in the year ended June 30,1997. 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 referred to above present fairly, in all material respects, the financial position of the City of Jefferson Board of Education as of June 30, 1997, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated March 18, 1998, on our consideration of the City of Jefferson Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants.
Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the City of Jefferson Board of Education taken as a whole. The accompanying combining statements (Exhibits E through H) and the fmancial schedules (Schedules 1 through 5), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-l33, Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the general-purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general-purpose financial statements and in our opinion, except for the effects of the 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.
97ARL-13

A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,

CLV:ds 97ARL-13

Claude L. Vickers State Auditor

CITY OF JEFFERSON BOARD OF EDUCA nON - JACKSON COUNTY

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30,1997

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
Inventories Food Donated Commodities Purchased Food
Amount to be Provided in Future Years For Payment of Capital Lease Agreements

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL REVENUE PROJECTS

FUND

FUND

FUND

$ 529,962.85 $ 127,238.87 $ 147,780.11

262,736.56

87,934.46

39,904.05

105,358,30

9,713,50 1,385,89

Total Assets

$ 617,897,31 $ 178,242.31 $ 515,874,97

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retainages Payable Capital Lease Agreements
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Expired Grant Balances/Questioned Costs For Inventories Food Donated Commodities Purchased Food For State Capital Outlay Projects Unreserved Undesignated
Total Fund Equity

$ 39,796.17 $ 8,512.54

900.00

34,792.16

7,177.80

$ 116,910.00

116,658.49

$ 40,696.17 $ 50,482.50 $ 233,568.49

$ 9,713.50 1,385.89 $ 19,018.13
$ 577,201.14 116,660.42 263,288.35
$ 577,201.14 $ 127,759.81 $ 282,306.48

Total Liabilities and Fund Equity

$ 617,897.31 $ 178,242.31 $ 515,874.97

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

EXHIBIT "A"

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS (Memorandum Only) JUNE 30,1997 JUNE 30,1996

$ 804,981.83 $ 458,722.60

262,736.56

233,196.81

97,785.75

294,877.91

9,713.50 1,385.89
294,877.91

7,383.05 518.97
232,332.93

$

294,877.91 $ 1,606,892.50 $ 796,743.30

$

48,308.71 $

80,737.86

35,692.16

44,260.30

7,177.80

1,171.31

116,910.00

86,850.00

116,658.49

$

294,877.91

294,877.91

232,332.93

$

294,877.91 $ 619,625.07 $ 445,352.40

$

10,467.65

$

9,713.50

1,385.89

19,018.13

7,383.05 518.97
125,350.30

957,149.91

207,670.93

$ 987,267.43 $ 351,390.90

$

294,877.91 $ 1,606,892.50 $ 796,743.30

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CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30,1997

EXHIBIT"B"

GENERAL FUND

SPECIAL
REVENUE FUND

CAPITAL PROJECTS
FUND

TOTALS (Memorandum Only)
YEAR ENDED JUNE 30,1997 JUNE 30,1996

REVENUES
State Funds Federal Funds Taxes Other Funds

$ 4,134,112,84 $
983,007.00 263,400.45

78,632.00 $ 329,181.43
138,632.07

1,167,744,00 $ 55,650.38

5,380,488,84 $ 329,181.43 983,007,00
457,682.90

3,784,688.82 315,874.07 881,400.00
335,206.91

Total Revenues

$ 5,380,520.29 $ 546,445.50 $ 1,223,394.38 $ 7,150,360.17 $ 5,317,169.80

EXPENDITURES

Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Food Services Operation Community Services Operations
Capital Outlay Debt Service
Principal Interest

$ 3,357,526.62 $ 182,736,01

$ 3,540,262.63 $ 3,222,256.50

222,059.25 121,179.10 131,895.81 143,375.88 376,029.29 38,935.49 434,087.40 194,960.71
95,152.59
25,943.17

4,517.13 11,484.50
6,203.24
1,002.19

330.00 351,837.23
750.00 $

2,699,156.03

226,576.38 132,663.60 131,895.81 149,579.12 376,029,29
39,937.68 434,087.40 194,960,71
95,482.59 351,837.23
26,693.17 2,699,156.03

159,608.06 154,049.14 127,046.90 128,747.09 352,317.22
57,049.49 324,904.65
50,238.54 153,577.17 346,454.28
23,322.32 86,850.00

46,076.02 17,391.18

46,076.02 17,391.18

31,607.44 19,851,86

Total Expenditures

$ 5,204,612.51 $ 558,860.30 $ 2,699,156.03 $ 8,462,628.84 $ 5,237,880.66

Excess of Revenues over (under) Expenditures

$ 175,907.78 $ -12,414.80 $ -1,475,761.65 $ -1,312,268.67 $

79,289.14

OTHER FINANCING SOURCES (USES)

Capital Leases Operating Transfers In Operating Transfers Out

$ 108,621.00 203,609,00

$ 108,621.00

$ 1,836,326.88 2,039,935.88 $

-203,609.00

-203,609.00

215,096,03 -215,096.03

Total Other Financing Sources (Uses)

$ 312,230.00

$ 1,632,717.88 $ 1,944,947,88 $

0.00

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $ 488,137.78 $

-12,414.80 $

156,956.23 $

632,679.21 $

79,289.14

FUND BALANCE JULY 1

89,063,36

136,977.24

125,350.30

351,390.90

273,466.41

Food Inventory - Net Change in Period Donated Commodities Purchased Food

2,330.45 866.92

2,330.45 866.92

-929.66 -434.99

FUND BALANCE JUNE 30

$ 577,201.14 $ 127,759.81 $ 282,306.53 $ 987,267.48 $ 351,390.90

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

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30,1997

EXHIBIT "C"

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Community Services Operations
Debt Service
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Other Sources
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1. 1996
Adjustments

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 3,837,050.77 $ 4,134,112.84

979,436,00 148,055.00

983,007,00 263,400.45

$ 4,964,541,77 $ 5,380,520.29

$ 3,379,064.60 $ 3,357,526.62

265,667.00 100,656.30 135,751.00 139,486.00 377,996,00
65,022.00 361,536.00
89,581.00 37,000.00
1,000.00

222,059.25 121,179.10 131,895.81 143,375,88 376,029.29
38,935.49 434,087.40 194,960.71
95,152.59

25,943.17 63,467.20

$ 4,952,759.90 $ 5,204,612.51

$ 11,781,87 $ 175,907.78

312,230.00

$ 11,781,87 $ 488,137.78

184,406.50

89,063.36

70,916.52

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$

78,632.00 $

78,632.00

245,986.00

329,181.43

153,771,00

138,632,07

$ 478,389.00 $ 546,445,50

$ 169,809.00 $ 182,736.01

6,700,00 11,500.00

4,517,13 11,484.50

6,800.00

6,203,24

1,002.19

875.00 4,300.00 2,000.00 355,577,00
500,00

330.00
351,837.23 750,00

$ 558,061,00 $ 558,860.30 $ -79,672.00 $ -12,414.80

$ -79,672.00 $ -12,414.80

136,085,57

129,075,22

4,996.18

FUND BALANCE JUNE 30.1997

$ 267,104.89 $ 577,201.14

$

61,409,75 $ 116,660.42

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

THIS PAGE LEn BLAHK

CITY OF JEFFERSON BOARD OF EDUCAnON - JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997

EXIDBIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The City of Jefferson Board of Education (Board) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is not organized as a separate legal entity and does not have the power to levy taxes or issue bonds. Accordingly, the City of Jefferson Board of Education isdetermined to be a component unit of the City of Jefferson, Georgia, which is the primary government.
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.
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, Taxes and Other funds under control of the Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most of a Board's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.
SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
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CITY OF JEFFERSON BOARD OF EDUCAnON - JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30,1997

EXHIBIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 - A fmancial reporting device 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 fmancial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be fmanced 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 ifthey 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 of these contracts. During fiscal year 1997, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1996 and ending in early June 1997. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1996 and ending in August 1997. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the Board in the same twelve months. As ofJune 30, 1997, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 1997, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent
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CITY OF JEFFERSON BOARD OF EDUCAnON - JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997

EXlllBIT "D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

to June 30, 1997. Also, the State's portion of the compensation paid in July and August 1997 was received and recorded as revenue in the fiscal year subsequent to June 30, 1997. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1996, were recorded in the year ended June 30, 1997. 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 of Jefferson Board of Education's budget is a complete fmancial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper of general 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 of Revenues, 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 fund balance as reflected on Exhibit "B" of this report:

FUND BALANCE JULY 1, 1996
Adjustments Inventories - July 1, 1996 Food Donated Commodities Purchased Foods
Fund Balance July 1, 1996 (Budget Basis)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JUNE 30, 1997 (Budget Basis)

Special Revenue
Fund $ 136,977.24
-7,383.05 -518.97
$ 129,075.22
-12.414.80 $ 116,660.42

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CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1997

EXIllBIT "0"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQillVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits 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.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Board are stated at cost. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Board to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia.
RECEIVABLES
Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

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CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30,1997

EXHIBIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PROPERTY TAXES

The City of Jefferson fixed the property tax levy for the 1996 tax year (calendar year) on October 20, 1996 (levy date). Taxes were due on December 20, 1996. The lien date for property taxes was January 1, 1996. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1997 since their collection meets the criteria of GASB codification section P70.103. The Jefferson City Clerk bills and collects the property taxes for the Board of Education and remits the taxes collected to the Board.

The tax millage rate levied for the 1996 tax year (calendar year) for the City of Jefferson Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

10..12 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 (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time of purchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.

INTERFUND TRANSACTIONS

The Board has the following types of interfund transactions:

Reimbursements of expenditures initially made from a fund that are properly applicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.

Operating transfers are recorded for all interfund transactions other than reimbursements.

MEMORANDUM ONLY - TOTAL COLUMNS

Total columns on the general purpose fmancial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results of operations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this

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CITY OF JEFFERSON BOARD OF EDUCAnON - JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997

EXlllBIT "D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
data. Certain reclassifications have been made to the comparative data to conform to the current year classifications.
Note 2: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value ofsecurities shall be equal to not less than 110 percent ofthe 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 anyone of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest 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.

- 12-

CITY OF JEFFERSON BOARD OF EDUCAnON - JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997

EXlllBIT "D"

Note 2: DEPOSITS AND INVESTMENTS

CATEGORIZATION OF DEPOSITS At June 30, 1997, the bank balances were $1,220,553.60. 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 fmancial institution, 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, 1997, as follows:

Risk Category
1 2 3

Bank Balance
s 215,690.50
1,004,863.10 0.00

Total

$ 1,220,553.60

CATEGORIZATION OF INVESTMENTS At June 30, 1997, the carrying amount of the Board's total investments was $262,736.56 and consisted entirely of funds invested in the Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services which are not required to be categorized since the Board did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office of Treasury and Fiscal Services for the Local Government Investment Pool does not provide for investment in derivatives or similar investments.

Note 3: NON-MONETARY TRANSACTIONS

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

Note 4: 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 illness or injuries to employees; natural disaster and unemployment compensation.

- 13 -

CITY OF JEFFERSON BOARD OF EDUCAnON - JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997

EXIllBIT"D"

Note 4: RISK MANAGEMENT

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

The Board is self-insured with regard to unemployment compensation claims. The Board accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. The Board has not incurred any unemployment compensation claims liability during the last two fiscal years.

The Board participates in the Georgia School Boards Association Workers' Compensation Fund, a public entity risk pool organized on July 1, 1992 to develop, implement, and administer a program of workers' compensation self-insurance for its member organizations. The Board pays an annual premium to the Fund for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Fund with the United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Fund in excess of$350,000.00 loss per occurrence, up to the statutory limit. Also, should losses within the retained limit of $350,000.00 aggregate to more than seventy-five percent (75%) of the standard experience rated premium during the policy term, the policy with the United States Fidelity and Guaranty Company will pay the next $1,000,000.00 ofloss.

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

Position Covered

Amount

Superintendent and Board Employees

$ 200,000.00

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, 1997, were as follows:

- 14-

CITY OF JEFFERSON BOARD OF EDUCAnON - JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997

EXHIBIT"D"

Note 5: GENERAL LONG-TERM DEBT

Balance July 1, 1996
Additions
Deductions Payments
Balance June 30, 1997

Capital Leases $ 232,332.93 108,621.00
46,076.02 $ 294,877.91

At June 30, 1997, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30
1998 1999 2000 2001 2002 2003 - 2007
Total Principal and Interest
Deduct: Imputed Interest
Net Present Value of Future Minimum Lease Payments

Capital Leases
$ 75,953.03 65,610.85 65,610.65 65,610.65 53,602.75 30,160.51
$ 356,548.44
61,670.53
$ 294,877.91

Note 6: ON-BEHALF PAYMENTS

The Board has recognized revenues and expenditures in the amount of $82,608.07 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies.

Georgia Department of Education Paid to the State Merit System of Personnel Administration For Health Insurance ofNon-Certified Personnel In the amount of$67,518.62

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $4,410.45

- 15 -

CITY OF JEFFERSON BOARD OF EDUCAnON - JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30.1997

EXHIBIT"D"

Note 6: ON-BEHALF PAYMENTS

Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $10,679.00

Note 7: SIGNIFICANT COMMITMENTS

The following is an analysis of significant outstanding construction or renovation contracts executed by the Board as of June 30, 1997, together with funding available:

Project GSFIC 97/96S-779-052

Unearned Executed Contracts

Funding Available From State

$ 346,685,28 $ 49,174.42

The amounts described in this note are not reflected in the general purpose fmancial statements.

Note 8: CONTINGENT LIABILITIES

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

Note 9: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

IRS PLAN DESCRIPTION .Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Board who are covered by IRS are required by State statute to contribute 5% of their gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.81% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

- 16-

CITY OF JEFFERSON BOARD OF EDUCAnON - JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30.1997

EXHIBIT "D"

Note 9: RETIREMENT PLANS
Fiscal Year 1997 1996 1995

Percentage Contributed
100% 100% 100%

Required Contribution
$ 389,455.97 $ 355,645.76 $ 331,072.62

- 17 -

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 3D, 1997

EXHIBIT"E"

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

SCHOOL FOOD
SERVICES FUND

LOTIERY PROGRAM

FEDERAL PROGRAMS

TOTALS JUNE 3D, 1997 JUNE 3D, 1996

$ 119,727.91 $

0.00 $

7,510.96 $ 127,238.87 $ 175,795.57

21,733.18

18,170.87

39,904.05

11,324.29

9,713.50 1,385.89

9,713.50 1,385.89

7,383.05 518.97

Total Assets

$ 152,560.48 $

0.00 $ 25,681.83 $ 178,242.31 $ 195,021.88

LIABILITIES AND FUND EQUITY

LIABILITIES

Accounts Payable Salaries Payable Expired Grant Balances Payable

$

3,532.75

21,267.92

Total Liabilities

$ 24,800.67

FUND EQUITY

Fund Balances Reserved For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated

$

9,713.50

1,385.89

116,660.42 $

Total Fund EqUity

$ 127,759.81 $

Total Liabilities and Fund Equity

$ 152,560.48 $

$

4,979.79 $

8,512.54 $ 23,662.82

13,524.24

34,792.16

33,758.50

7,177.80

7,177.80

623.32

$ 25,681.83 $ 50,482.50. $ 58,044.64

0.00 $ 0.00 $

$
0.00 0.00 $

9,713.50 $ 1,385.89
116,660.42
127,759.81 $

7,383.05 518.97
129,075.22
136,977.24

,,0;,;.,0,;;0,;., $ 25,681.83 $ 178,242.31 $ 195,021.88

See notes to the general purpose financial statements.

- 18-

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 3D. 1997

EXHIBIT"F"

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration Business Administration Student Transportation Services Central Support Services Food Services Operation Community Services Operations
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

SCHOOL FOOD
SERVICES FUND

LOTIERY PROGRAM

FEDERAL PROGRAMS

TOTALS YEAR ENDED JUNE 3D, 1997 JUNE 30,1996

$ 25,632.00 $ 175,158.36 138,632.07
$ 339,422.43 $

53,000.00 $

$ 154,023.07

53,000.00 $ 154,023.07 $

78,632.00 $ 329,181.43 138,632.07
546,445.50 $

111,941.90 311,315.32 151,744.04
575,001.26

$
$ 351,837.23 $ 351,837.23 $ $ -12,414.80 $

53,000.00 $
53,000.00 $ 0.00 $

129,736.01 $
4,517.13 11,484.50 6,203.24 1,002.19
330.00
750.00
154,023.07 $
0.00 $

182,736.01 $
4,517.13 11,484.50 6,203.24
1,002.19
330.00 351,837.23
750.00
558,860.30 $
-12,414.80 $

202,860.80
1,943.57 11,607.81 3,670.47
1,735.00 13,282.56 346,454.28
100.84
581,655.33
-6,654.07

$ -12,414.80 $ 136,977.24
2,330.45 866.92

0.00 $ 0.00

11,487.03

0.00 $ 0.00

-12,414.80 $ 136,977.24

4,832.96 133,508.93

2,330.45 866.92

-929.66 -434.99

FUND BALANCE JUNE 30

$ 127,759.81 $

0.00 $

0.00 $ 127,759.81 $ 136,977.24

See notes to the general purpose financial statements.

- 19-

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30.1997

EXHIBIT"G"

ASSETS Cash and Cash Equivalents Investments Accounts Receivable

REGULAR

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

LOTIERY PROJECT

TOTALS JUNE 30,1997 JUNE 30,1996

$

551.79 $

142,453.32 $

4,775.00 $

147,780.11 $

212,200.30

262,736.56

262,736.56

105,358.30

105,358.30

Total Assets

$ 263,288.35 $

247,811.62 $

4,775.00 $

515,874.97 $

212,200.30

LIABILITIES AND FUND EQUITY

LIABILITIES

Contracts Payable Retainages Payable

Total Liabilities

FUND EqUITY

Fund Balances

Reserved

For State Capital Outlay Projects

Unreserved

Undesignated

$

Total Fund Equity

$

$ $
$ 263,288.35 263,288.35 $

116,910.00 116,658.49 233,568.49
14,243.13 $ 0.00
14,243.13 $

$

116,910.00 $

116,658.49

$

233,568.49 $

86,850.00 86,850.00

4,775.00 $ 0.00
4,775.00 $

19,018.13 $ 263,288.35 282,306.48 $

125,350.30 0.00
125,350.30

Total Liabilities and Fund Equity $ 263,288.35 $

247,811.62 $

4,775.00 $

515,874.97 $

212,200.30

See notes to the general purpose financial statements.

- 20-

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30,1997

EXHIBIT"H"

REGULAR

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

LOTIERY PROJECT

TOTALS YEAR ENDED JUNE 30, 1997 JUNE 30, 1996

REVENUES
State Funds Other Funds

s

s 1.013,583.00 $ 154,161.00

1.167.744.00 $

0.00

$ 55,650.38

55,650.38

Total Revenues

$ 55,650.38 $

1,013.583.00 $ 154,161.00 $ 1,223,394.38 $

0.00

EXPENDITURES

Current Support Services Business Administration Professional and Technical Services Supplies
Capital Outlay Building and Building Improvements Equipment

$ 16,514.70 41.83
320,079.21 $ 59,858.90

2.041,668.97 $ 15,842.42

$ 245,150.00

16,514.70 41.83
s 2,606,898.18
75,701.32

86.850.00

Total Expenditures

$ 396.494.64 $

2,057,511.39 $ 245.150.00 $ 2.699,156.03 $

86,850.00

Excess of Revenues over (under) Expenditures

$ -340.844,26 $

-1.043,928.39 $ 90,989,00 $ -1.475.761.65 $

-86.850.00

OTHER FINANCING SOURCES (USES)

Operating Transfers In Operating Transfers Out

$ 1.836.326.83 $ -1.232,194.22

1,023,810.22 $

4,775.00 $ 2,864.912.05 $ -1.232,194.22

203,609.00

Total Other Financing Sources (Uses)

$ 604.132.61 $

1.023.810,22 $

4,775.00 $ 1,632,717.83 $ 203,609.00

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $ 263.288,35 $

-20,118.17 $ -86,214,00 $ 156.956.18 $ 116,759,00

FUND BALANCE JULY 1

0.00

34,361.30

90,989.00

125.350.30

8,591,30

FUND BALANCE JUNE 30

$ 263.288.35 $

14.243.13 $

4,775.00 $ 282,306.48 $ 125,350.30

See notes to the general purpose financial statements.

- 21 -

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30,1997

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U. S, Department of Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program 1997 Grant National School Lunch Program 1997 Grant Food Distribution Program (1)
Total U. S, Department of Agriculture
Education, U, S, Department of Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies 1997 Grant Title II Eisenhower Professional Development 1997 Grant Tille VI Innovative Education Program Strategies 1997 Grant Individuals with Disabilities Education Act Part B - Special Education Flow Through 1997 Grant Preschool 1997 Grant Safe and Drug-Free Schools 1997 Grant Vocational Education - Basic Grants to States High School Program Basic Grant 1997 Grant
Total U, S. Department of Education

CFDA NUMBER

PASSTHROUGH
ENTITY 10
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

* 10.553
* 10,555 10.550

N/A

s 29,239.48

(2)

N/A

124,315.45 $

330,233.80 (3)

N/A

21,603.43

21,603.43

$ 175,158.36 $ _ _.3.:;5.:;1..,,-8,=3",7,-,,=2:3=..

84,010 84.281 84,298

N/A

$ 79,637,00 s

N/A

8,000,00

N/A

3,394,87 .

79,637.00 8,000.00 3,394,87

* 84.027

N/A

84,173

N/A

84.186

N/A

45,589,20 6,250,00 4,376.00

45,589,20 6,250.00 4,376.00

84,048

N/A

6,776,00

6.776.00

$ 154.023.07 $ _ _1=5-4,,.0=2=3..:0.7..

Total Federal Financial Assistance

$ 329.181.43 $

N/A = Not Available

Notes to the Schedule of Expenditures of Federal Awards

(1) The amounts shown for the Food Distribution Program represent 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 1997 National School Lunch Program.
(3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source.

Major Programs are identified by asterisk{*) in front of the CFDA number.

The Board did not provide Federal Assistance to any Subrecipient.

The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the City of Jefferson Board of Education and is presented on the modified accrual basis of accounting which is the same basis of accounting used in the presentation of the general purpose financial statements.

See notes to the general purpose financial statements.

- 22-

5=05=.8=60~.3~ 0

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30,1997

SCHEDULE "2"

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 Mid-term Adjustment Counselors Grades 4 and 5 Technology Training Local Fair Share Educational Equalization Funding Grant Food services Vocational Education Other State Programs At-Risk Summer School Program Health Insurance Mentor Teacher Program Preschool Handicapped Program Remedial Summer School Program Teachers'Retirement Lottery Programs Exceptional Growth-Capital Outlay Instructional Technology
Georgia State Financing and Investment Commission Reimbursement on Construction Projects
Office of Treasury and Fiscal Services Public School Employees Retirement

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$ 2,244,210,00 514,652,00 48,698,00 95,214.00 30,281.00 661,201.00
28,405.00 8,114.00
101,433.00 40,034,00 177,895.00
6,920.00 27,157,00 -287,678.00 322,013,00
$ 739.00
5,074.12 67,518,62
9,604.00 16,187.00 1,351,65 4,410,45

25,632.00
$ 53,000,00

$ 2,244,210,00 514,652.00 48,698,00 95,214,00 30,281.00 661,201,00

28,405,00 8,114.00
101,433.00 40,034.00 177,895.00
6,920,00 27,157.00 -287,678.00 322,013,00 25,632.00
739,00

5,074.12 67,518,62
9,604.00 16,187,00
1,351,65 4,410.45

154,161.00

154,161.00 53,000.00

10,679,00

1,013,583,00

1,013,583.00

10,679.00

$ 4,134,112,84 $ 78,632.00 $ 1,167,744.00 $ 5,380,488,84

See notes to the general purpose financial statements.

- 23-

EXPENDITURES
Current Instruction

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF EXPENDITURES LOTTERY PROGRAM
YEAR ENDED JUNE 3D. 1997

SCHEDULE "3"
INSTRUCTIONAL TECHNOLOGY
53,000.00

See notes to the general purpose financial statements.

- 24-

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 1997

SCHEDULE "4"

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

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$

3,054,793.00 $

~9..1;,.1..5.;1;..0.;0.~

$

3,013,446.88

161,085.21 $ _ _---'-.1..4.;.0.,;,;7.".8;.8....;8;..0;;.~

$

3,174,532.09

-34,380.63 3,140,151.46

$

0.00 $=======0=.0=0

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

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30,1997

GENERAL AND CAREER EDUCATION PROGRAMS Kindergarten (0) Grades 1 - 3 (0) Sub-Total - K-3 Grades 4 - 5 (0) Grades 6 - 8 (0) Grades 9 - 12 (0) High School Laboratories (0) Vocational Education Laboratories (0) Total General and Career Education Programs
SPECIAL EDUCATION PROGRAMS Regular Programs
r) Category I
Category II (0) Category III (0) Category N (0)
Sub-Total - Regular Category VI (Gifted) (0)
Total Special EducationPrograms REMEDIAL EDUCATION PROGRAM (0)
Total Fourteen Weighted Programs MEDIA CENTER PROGRAMS
Salaries Operations
Total Media Center Programs
Total Fourteen Weighted and Media Center Programs
STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development
Total Staff Development Programs (0) Identifies Fourteen Weighted Programs.

ALLOTMENTS FROM DEPARTMENT OF EDUCATION

REQUIRED

ORIGINAL

%

ORIGINAL

MID-TERM

s

305,038.00

$

274,534,20 $

631,216.00

568,094.40

s

936,254.00 90 $

s 842,628.60

302,787,00 90

272,508.30

462,508,00 90

416,257.20

230,170,00 90

207,153.00

169,417.00 90

152,475.30

143,074.00 90

128,766.60

$ 2,244,210.00

$ 2,019,789.00 $

-12,706.20 -12,706.20 64,725.20 52,019,00

$

494,180.00

$

s 444,762.00

100,000.00

$

494,180.00 90 $

444,762,00 $

20,472.00 90

18,424.80

$

514,652.00

$

463,186.80 $

$

48,698.00 90 $

s 43,828.20

$ 2,807,560,00

$ 2,526,804.00 $

100,000.00
100,000.00 0.00
152,019.00

$

77,306,00 90 $

69,575.40 $

0.00

17,908.00 90

16,117.20

$

95,214.00

$

85,692.60 $

0.00

$ 2,902,774.00

s 2,612,496.60 $

152,019.00

$

8,421.00

21,860.00

$

8,421.00 $

21,860.00

$

30,281.00 100 $

30,281.00 $

0.00 0.00
0.00

See notes to the general purpose financial statements.

- 26 -

SCHEDULE "5"

TOTAL REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNTOF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$

261,828.00 $

246,934.07 $

8,608.91 $

255,542.98

568,094.40

548,220.74

30,416.05

578,636.79

$

829,922.40 $

795,154.81 $

39,024.96 $

834,179.n $

0.00

272,508.30

319,886.58

7,015.31

326,901.89

0.00

416,257.20

442,821.74

26,641.37

469,463.11

0.00

271,878.20

330,667.43

16,613.46

347.280.89

0.00

152,475.30

203,535.10

7,978.09

211,513.19

0.00

128,766.60

181,953.51

24,548.72

206,502.23

0.00

$ 2.071,808.00 $ 2,274.019.17 $

121,821.91 $ 2,395,841.08

$

544,762.00

$

881.54 $ 166,477.61 379,388.85
881.54

2.802.12 $ 8,853.20 4,323.82

3,683.66 175,330.81 383,712.67
881.54

$

544,762.00 $

547,629.54 $

15,979.14 $

563,608.68

0.00

18,424.80

32,275.11

2,012.49

34,287.60

0.00

$

563,186.80 $

579,904.65 $

17,991.63 $

597,896.28

$

43,828.20 $

50,224.84 $

975.26 $

51,200.10

0.00

$ 2,678,823.00 $ 2,904,148.66 $

140,788.80 $ 3,044,937.46

$

69.575.40 $

109,298.22

$

109,298.22

0.00

16,117.20

$

20,296.41

20,296.41

0.00

$

85,692.60 $

109,298.22 $

20,296.41 $

129,594.63

$ 2,764,515.60 $

3,013,446.88 $

161,085.21 $ 3,174,532.09 $

0.00

$

8,421.00

21.860.00

$

22,633.35 $

22,633.35

8,856.53

8,856.53

$

31,489.88 $

31,489.88 $========,;;0,.;0;0.

- 27 -

SECTIONll COMPLIANCE AND INTERNAL CONTROL REPORTS

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
March 18, 1998

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Jefferson Board of Education
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of City of Jefferson Board ofEducation as of and for the year ended June 30, 1997, and have issued our report thereon dated March 18, 1998. 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 the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether City of Jefferson Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered City of Jefferson Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its
97YB-40

operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in our judgement, could adversely affect City of Jefferson Board of Education's ability to record, process, summarize and report fmancial data consistent with assertions ofmanagement in the financial statements. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FS-7791-97-02.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over fmancial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, the reportable condition noted above is also considered to be a material weakness.
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
Respectfully submitted,

CLV:ds 97YB-40

Claude 1. Vickers State Auditor

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
March 18, 1998

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Jefferson Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of City of Jefferson Board of Education with the types of compliance requirements described in the Us. Office ofManagement and Budget (OMB) Circular A-i33 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 1997. City of Jefferson Board of Education's major Federal programs are identified in the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each ofits major Federal programs is the responsibility of City ofJefferson Board of Education's management. Our responsibility is to express an opinion on City of Jefferson Board of Education's compliance based on our audit.
We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable. to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the City of Jefferson Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on City of Jefferson Board of Education's compliance with those requirements.

97SA-I0

In our opinion, the City of Jefferson Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 1997.
Internal Control Over Compliance
The management of City of Jefferson Board of Education is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered City ofJefferson Board of Education's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133.
Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more ofthe internal control components does not reduce to a relatively low level ofrisk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
Respectfully submitted,
~~~
Claude L. Vickers State Auditor
CLV:ds 97SA-IO

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

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1997

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

7791-93-01 7791-93-03 7791-94-02 7791-94-03 7791-96-01 7791-96;.02

Previously Reported Corrective Action Implemented Unresolved - See Corrective Action/Response Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented

CORRECTIVE ACTIONIRESPONSE

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number 7791-93-03

Due to current staffing limitation and budgetary considerations, the Board has decided not to pursue the recording of general fixed assets on the financial statements. This finding will appear on subsequent audit reports until resolved by the local board.

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

7791-95-02

Previously Reported Corrective Action Implemented

SECTION IV FINDINGS AND QUESTIONED COSTS

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1997
I SUMMARY OF AUDITOR'S RESULTS
1. Type of Report Issued on the Financial Statements The auditor's opinion on the City of Jefferson Board of Education's financial statements was qualified for various departures from generally accepted accounting principles.
2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the City of Jefferson Board of Education disclosed a financial statement reportable condition related to the following control category.
General Fixed Assets
The reportable condition described above is considered to be a material weakness.
3. Noncompliance Material to the Financial Statements The audit of the City of Jefferson Board of Education disclosed no instances of noncompliance that were deemed to be material to the financial statements.
4. Reportable Conditions in Internal Control Over Major Programs The audit report for the City of Jefferson Board of Education did not disclose any reportable conditions in internal control over major programs.
5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the City of Jefferson Board of Education's report on compliance with requirements applicable to major programs was unqualified.
6. Audit Findings Required to be Reported by Section .51OCa) of OMB Circular A-l33 The City of Jefferson Board of Education's audit did not disclose audit findings required to be reported by section .51O(a) ofOMB Circular A-B3.
7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program 84.027 Individuals with Disabilities Education Act - Part B - Special Education - Flow Through
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
9. Low Risk Auditee The City of Jefferson Board of Education did not qualify as a low risk auditee.
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CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1997
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL LEDGER Failure to Transfer Local Matching Funds Nonmaterial Noncompliance Finding Control Number: FS-7791-97-01
The City of Jefferson Board of Education received approval for Lottery Capital Outlay project funding for fiscal year 1997 through the Georgia Department of Education. Both the instructions in Chapter 41 of the Financial Management for Georgia Local Units of Administration and the agreement signed by the Board require that the Board transfer and designate by name and number local matching funds by year end. Because the transfer was not made by the Board as of June 30, 1997, a correcting audit adjustment was necessary to transfer $4,775.00 from the Capital Projects Fund - Regular to Lottery Project 98/97S-779-051 as required.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-7791-97-02
The City of Jefferson Board of Education did not maintain a General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. 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.
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
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