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AUDITREPORT CITY OF JEFFERSON BOARDOF EDUCATION
A COMPONENT UNIT OF THE CITYOF JEFFERSON, GEORGIA
YEAR ENDED JUNE 30, 1999 ' - - - - - - - - - - - - - - - - - - - - -j
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

EXHIBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND AcruAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2 SCHEDULE OF STATE REVENUE 3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 4 SCHEDULE OF EXPENDITURES
LOTIERY PROGRAMS

2
4 ."
5 7
18 19
20 22
24
26 27 28

CITY OF JEFFERSON BOARP OF EDUCATION - JACKSON CQUNfY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDmONAL FINANCIAL INFORMATION

SCHEDULES

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

5

OVERALL

29

6

BY PROGRAM

30

SECTIONll
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTIl'jG 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

SECTIONN FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I

FINANCIAL

."

RUSSELL W. HINTON
STATEAUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 25, 2000

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City ofJefferson Board ofEducation
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, 1999, as listed in the table of contents. These general purpose financial statements are the responsibility ofthe City
ofJefferson Board ofEducation's management. Ourresponsibility is to express an opinion on these general
purpose financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial 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.
99ARL-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, 1999, a portion of salaries
and the corresponding employer's cost ofrelated benefits earned for contractual services completed prior to June 30, 1999. Also funds received, subsequent to June 30, 1999, from the Georgia Department ofEducation 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, 1998, were improperly recorded in the year ended June 30, 1999. 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 ofthe City of Jefferson Board of Education as of June 30, 1999, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated February 25, 2000, 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 financial schedules (Schedules 1 through 6), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes ofadditional analysis and are not a required part ofthe 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 ofthe 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.
99ARL-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,
~~.~. Russell W. Hinton State Auditor RWH:jb 99ARL-13
."

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY
."

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30. 1999

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

SPECIAL

GENERAL

REVENUE

FUND

FUND

$

462,416.42 $

20,387.63

936.60

249,934.86

174,643.64

7,456.55 2,937.06

Total Assets

$

713,287.88 $

205,424.88

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 Continuation of Federal Programs For Inventories Food Donated Commodities Purchased Food For SPLOST Prpjects For State Capital Outlay Projects Unreserved Undesignated
Total Fund Equity

.'

$

42,193.24 $

22,n9.16

2,452.35

52,165.97

41.91

696.97

$

44,687.50 $

75,642.10

$

1,506.62

7,456.55 2,937.06

$

668,600.38

117,882.55

$

668,600.38 $

129,782.78

Total Liabilities and Fund Equity

$

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

713,287.88 $

20;;,5;;",r4,oi2iiio4io.i8_8_

EXHIBIT "A"

TYPES CAPITAL
PROJECTS FUND

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

(Memorandum Only)

JUNE 30, 1999

JUNE 30, 1998

$

451,699.88

$

934,503.93 $ 1,283,740.24

936.60

885.95

167,417.78

591,996.28

496,364.91

- - - - - - $ ---==:2.2:.8:,.7:3:7:..3.:1-.

7,456.55 2,937.06
228,737.31

8,704.26 2,524.33
289,757.91

$

619,117.66 $

228,737.31 $ 1.766,567.73 $ 2,081,9n.60

.'

$

362,834.46

$

$ 228,737.31

64,972.40 $ 54,618.32
738.88 362,834.46
228,737.31

315,054.53 53,679.76 28,036.28 67,282.06
8,484.10 289,757.91

$

362,834.46 $

228,737.31 $

711,901.37 $

762,294.64

$

256,283.20

$

256,283.20

$

1,506.62 $

1,296.62

7,456.55 2,937.06 256,283.20

8,704.26 2,524.33 451,526.33 10,239.00

786,482.93

845,392.42

$ 1,054,666.36 $ 1,319,682.96

$

619,117.66 $

228,737.31 $ 1.766,567.73 $ 2,081,9n.60

-3-

The notesto the generalpurposefinancialstetements ara an integralpart of this stetemenl
-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 30,1999

.EXHIBIT 'C'

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 4,161,696,99 $ 4,435,355.55

1,499,960.00 146,500.00

1,514,960.10 264,702.23

Total Revenues

$ 5,808,156.99 $ 6,215,017.88

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

$ 4,311,738.57 $ 4,191,131.95

270,690,00 272,043.00 157,799.00 150,931.00 430,455.00
74,789.00 467,475.00 114,264.00
51,813.00 500.00

268,996,42 271,454,89 157,098,16 150,647.28 446,383,53
76,722,85 461,567,47
74,728,99 51,675.50

31,302.92 77,349.23

Total Expenditures

$ 6,302,497.57 $ 6,259,059,19

Excess of Revenues over (under) Expenditures

$ -494,340.58 $ -44,041.31

OTHER FINANCING SOURCES (USES)

Other Sources Other Uses

$ -17,865.62

Total Other Financing Sources (Uses)

$ -17,865.62

Excess of Revenues and Other Financing Sources
over (under) Expenditures and Other Financing Uses $ -494,340.58 $

-61,906.93

FUND BALANCE JULY 1, 1998

675,712.10

730,507.31

Adjustments Food Inventory - Net Change in Period
Donated Commodities Purchased Food

FUND BALANCE JUNE 30. 1999

$ 181,371.52 $ 668,600,38

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$

28,188,00 $ 117,049.00

183,766,00

541,371,40

170,046.00

170,981,81

$ 382,000.00 $ 829,402.21

$ 315,396.97 $ 347,556.43

9,525.00 60,905.00

15,649.03 52,961.45

8,300.00 1,080.00

8,011.27 1,079.94

400.00
1,200.00 386,870.00
3,000.00

398.73
399,047.30 1,750.00

$ 786,676.97 " $ $ -404,676,97 $

826,454.15 2,948.06

$

259.38

$

259.38 -

$ -404,676.97 $ 149,701.44 18,151.62

3,207.44 127,410.32
-1,247.71 412.73

$ -236,823.91 $ 129,782.78

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. 1999

EXHmIT"D"

Note 1: SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The City ofJefferson Board ofEducation (Board) was established underthe laws ofthe State ofGeorgia and operates under the guidance of a school board electedby 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 Boardof Education is determined to be a component unit of the City of Jefferson, Georgia, which is the primarygovernment.
FUND ACCOUNTING
The Board uses funds and an account group to reporton its financial positionand the resultsofits operations. Fund accounting is designed to demonstrate legalcompliance andto 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 accountgroup is a financial reporting device designed to provide accountability for certain assetsand liabilities that are not recordedin 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 ofpurchase. A General Fixed Assets Account Group is not presentlymaintained by the Board. To conform to generally accepted accounting principles, a General Fixed AssetsAccount Group shouldbe maintained for reporting the cost of assets acquired by governmental fund types.
Although"schoolactivityaccounts" are maintained at the individual schools, neitherthe assets, liabilities and fund equity, nor the revenues, expenditures and changesin fund balances ofthese accounts are reflected in these financial statements. To conform to generallyaccepted accounting principles,these accounts should be recorded in the general purpose financial statements.
The generalpurpose financial statements account for all State,Federal, Taxes and Other funds under control ofthe Board, in compliance with generally accepted accounting principles applicable to governmental units, unlessotherwise disclosed in thesenotes. Fundsandthe account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are usedto account for all or mostofa Board's educational activities. GovernmentalFund Types include:
GENERAL FUND- the fundused to account for all financial resources ofthe Boardexceptthoserequired to be accounted for in anotherfund. Thesetransactions relateto resources obtained and used for services provided by a board ofeducation.
SPECIAL REVENUE FUND- the fundusedto account fortheproceeds of specific revenue sources (other than for major capital projects) that are legallyrestrictedto expenditures for specifiedpurposes, These funds are receivedprimarilyfrom the Georgia Department of Education and fromthe Federalgovernment to accomplish specific educational objectives.
-7-

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1999

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 ofmajor capital facilities.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for 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.
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, local option sales taxes, intergovernmental grants and investment income.
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 1999, a substantial number of . personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1998 and ending in early June 1999. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1998 and ending in August 1999. State grants to fund the State's share ofthese contracts were disbursed from the Georgia Department of Education to the Board in the same twelve months. As of June 30, 1999, compensation under these employment contracts had been earned, but two ofthe twelve monthly payments, due for July and August 1999, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1999. Also, the State's portion ofthe compensation paid in July and August 1999 was received
-8-

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1999

EXHIBIT"D"

Note 1; SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES
and recorded as revenue in the fiscal year subsequent to June 30, 1999. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1998, were recorded in the year ended June 30, 1999. 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 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 ofbudget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by-the Board, such budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting 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.
CASH AND CASH EQUIVALENTS
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 in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Board to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
-9-

COY OF JEFFERSQN BOARD OF EDUCATION - JACKSON COUNTY
NOTES TO TIIE GENERAL PURPOSE FINANCIAL STAIEMENTS JUNE 30. 1999

EXHIBIT "D"

Note 1; SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES

(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 ofthe United States government,

(5) Prime banker's acceptances,

(6) The Local Government Investment Pool administered by the State of Georgia, Office ofTreasury and Fiscal Services,

(7) Repurchase agreements, and

(8) Obligations of other political subdivisions ofthe State of Georgia.

RECEIVABLES

.'

Receivables consist ofgrant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

PROPERTY TAXES

The City ofJefferson fixed the property tax levy for the 1998 tax year (calendar year) on November 10, 1998 (levy date). Taxes were due on January 10, 1999. The lien date for property taxes was January 1, 1998. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1999. The 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 1998 tax year (calendar year) for the City ofJefferson Board ofEducation was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

~mills

-10 -

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30.1999

EXHIBIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SALES TAXES
Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $907,469.17 and was recorded in the Capital Projects Fund. The State will terminate collection of this tax once an additional $2,652,780.98 has been collected or on June 30, 2002, whichever occurs first.
The City ofJefferson (City Government) sold general obligation bonds to provide advance funding for Capital Outlay Projects associated with issuance of a Special Purpose Local Option Sales Tax (SPLOST). In fiscal year 1999, the Board ofEducation provided $150,000.00 ofSPLOST proceeds to the City Government to be used for debt service on said general obligation debt.
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 financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate firiancial analysis. Data in these columns do not present financial position or results of operations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.

- 11 -

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1999

EXHIBIT "D"

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 of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of anyone of or any combination of the following:
(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 ofthe counties or municipalities ofthe State of Georgia,
(5) Bonds of any public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of , the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS At June 30, 1999, the bank balances were $1,402,187.52. The amounts of the total bank balances are classified into three categories ofcredit 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.
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CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30.1999

EXHlBIT"D"

Note 2: DEPOSITS AND INVESTMENTS

Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Board's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Board's name.)

The Board's deposits are classified by risk category at June 30, 1999, as follows:

Risk CategOly

Bank Balance

1

$ 217,032.06

2

1,185,155.46

3

0.00

Total

$ 1.402,187.52

CATEGORIZATION OF INVESTMENTS At June 30, 1999, the carrying value of the Board's total investments was $936.60 which is materially the same as fair value. This investment 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 (primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description of the Primary Liquidity Portfolio is as follows:

The Primary Liquidity Portfolio consists of Georgia Fund 1, which is a combination local and state government investment pool, and Fund 6. Georgia Fund I is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. However, Georgia Fund 1 operates in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and is considered to be a 2a-7 like pool. The pool is not registered with the SEC as an investment company. The pool's primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and determines participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value of the shares. Participation in the pool is voluntary and deposits consist of funds from local governments; operating and trust funds of Georgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund.

Investments in Georgia Fund 1 and Fund 6 are directed toward short-term instruments such as U. S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Government or any of its agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average

- 13-

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY
NOTES TO DIE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1999

EXHIBIT"D"

Note 2: DEPOSITS AND INVESTMENTS
maturity of Georgia Fund 1 may not exceed 60 days. Fund 6 maintains a duration of approximately one year. The weighted average maturity for Georgia Fund 1 on June 30, 1999 was 27 days. The average investment duration for Fund 6 on June 30, 1999 was 1.03 years.
Note 3: NON-MONETARY TRANSACTIONS
The Board receives food commodities from the United States Department ofAgriculture (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. '
The Board participates in the Georgia School Boards Association Risk and Insurance Management Systein, a public entity risk pool organized on July 1, 1994 to develop and administer a plan to reduce risk ofloss on account ofgeneral liability, motor vehicle liability, or property damage, including safety engineering and other loss prevention and control techniques, and to administer one or more groups of self-insurance funds, including the processing and defense of claims brought against members of the system. The Board pays an annual premium to the system for its general insurance coverage. Additional coverage is provided through agreements by the system with other companies according to their specialty for property, boiler and machinery, general liability (including coverage for sexual harassment, molestation and abuse) and automobile risks. Payment of excess insurance for the system varies by line of coverage.
,
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$3S0,000.00 loss per occurrence, up to the statutory limit.
The Board has purchased surety bonds to provide additional insurance coverage as follows:

-14 -

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY
NOTES TO TIlE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30. 1999

EXHIBIT "D"

Note 4: RISK MANAGEMENT

Position Covered

Amount

Superintendent All Employees

$ 50,000.00 $ 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 qualifyas 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, 1999, were as follows:

Capital Leases

Balance July 1, 1998
Deductions Payments

$ 289,757.91
,"
61.020.60

Balance June 30, 1999

$ 228.737.31

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

Fiscal Year Ended June 30

Capital Leases

2000 2001 2002 2003

$ 77,349.23 77,349.23 65,341.33 41.899.09

Total Principal and Interest

$ 261,938.88

Deduct: Imputed Interest

33.201.57

Net Present Value ofFuture Minimum Lease Payments

$ 228.737.31

- 15 -

CTIY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY
NOTES TO mE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1999

EXHIBIT "D"

Note 6: ON-BEHALF PAYMENTS

The Board has recognized revenues and expenditures in the amount of$89,461.8l for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies.

Georgia Department ofEducation Paid to the State Merit System of Personnel Administration For Health Insurance ofNon-Certified Personnel In the amount of$72,135.78

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $6,003.03

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$11,323.00

Note 7: SIGNIFICANT COMMITMENTS
"
The following is an analysis of significant outstanding construction or renovation contracts executed by the Board as of June 30, 1999:

Prqject

Unearned Executed Contracts

Jefferson High School Renovations

$ 263.737.00

The amount described in this note is not reflected in the general purpose financial 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.

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

-16 -

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 1999

EXHIBIT"D"

Note 9: RELATED PARTY TRANSACTIONS

On April 27, 1999, a contract between the City of Jefferson Board of Education and Carroll Daniel Construction Company was executed in the amount of $600,053,00, The contract provided for renovations at Jefferson High School. Current year expenditures on this project amounted to $362,834.46. Steven Hix, a member of the City of Jefferson Board of Education, is currently employed by Carroll Daniel Construction Company as a project manager whose duties include oversight of the Jefferson High School renovation project.

Note 10: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.
."
TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Board who are covered by TRS are required by State statute to contribute 5% oftheir gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.95% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

1999 1998 1997

100% 100% 100%

$ 506,029.60 $ 447,125.61 $ 389,455.97

- 17-

CITYOF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY COMBINING BAlANCE SHEET SPECIAL REVENUE FUND JUNE 30.1999

EXHIBIT wE"

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

FEDERAL PROGRAMS

TOTALS JUNE 30, 1999 JUNE 30, 1998

$ 148,507.42

$ 148,507.42 $ 164,447.96

$

9,450.17 $ 165.193.47

174,643.64

103,932.87

7,456.55 2,937.06

7,456.55 2,937.06

8,704.26 2,524.33

Total Assets

$ 158,901.03 $

9,450.17 $ 165,193.47 $ 333,544.67 $ 279,609.42

Seenotesto the generalpurpose financial statements.

-18-

CITY OF JEFFERSON BOARDOF EDUCATION - JACKSONCOUNTY COMBINING STATEMENTOF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIALREVENUE FUND YEAR ENDEDJUNE 30 1999

EXHIBITF

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvementof Instructional Services General Administration School Administration Central Support Services Other Support Services Food Services Operation CommunityServices Operations
TotalExpend~ures
Excess of Revenuesover (under) Expend~ures
OTHER FINANCING SOURCES
OperatingTransfers In
Excess of Revenuesand Other FinancingSources over (under) Expenditures
FUND BALANCEJULY 1
Food Inventory- Net Changein Period DonatedCommodities Purchased Food

SCHOOL FOOD
SERVICES FUND

LOTIERY PROGRAMS

FEDERAL PROGRAMS

TOTALS YEAR ENDED JUNE 30, 1999 JUNE 30. 1998

$

28,218.00 $

202,844.93

170,981.81

$ 402,044.74 $

88.831.00 $
88.831.00 $

$ 338,526.47
338,526.47 $

117,049.00 $ 541,371.40 170,981.81
829,402.21 $

142,730.82 361,625.75 162,622,49
666,979.06

$

$ 399,047.30

$ 399,047,30 $

$

2,997.44 $

88,831,00 $
88,831.00 $ 0.00 $

258,725.43 $
15,649.03 52,961.45
8,011.27 1,079.94
398.73
1,750.00
338,575.85 $
-49.38 $

347,556.43 $
15,649.03 52,961.45
8,011.27 1,079.94
398.73
399,047.30 1,750.00
826,454.15 $
2,948.06 $

254,304.41
10,300.79 11,580.28 20,998.79
2,592.00 2,000.00 374,672.71 2,605.50
679,054.48
-12,075.42

$

2,997.44 $

126,113.70

-1,247.71 412.73

0.00 $ 0.00

259.38

259.38

11,596.73

210.00 $ 1,296.62

3,207.44 $ 127,410.32

-478.69 127,759.81

-1,247.71 412.73

-1,009.24 1,138,44

FUND BALANCEJUNE 30

$ 128,276.16 $

0.00 $

1,506.62 $ 129,782.78 $ 127,410.32

see notes to the general purposefinancialstatements.

-19-

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30,1999

ASSETS Cash and Cash Equivalents Investments Accounts Receivable

REGULAR

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$

0,00 $

0,00

Total Assets
LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Contracts Payable Retainages Payable
Total Liabilities
FUND EqUITY
Fund Balances Reserved For SPLOST Projects For State Capital Outlay Projects Unreserved Undesignated
Total Fund Equity

$

0.00 $ =======0=,00=

I"

$

0,00 $

$

0,00 $

0=.0=0_ 0=.0~ 0

Total Liabilities and Fund Equity

$

0.00 $ =======0.=00=

See notes to the general purpose financial statements.
-20-

EXHIBIT "G" .

SPECIAL PURPOSE LOCAL OPTION SALES TAX

$

451,699.88 $

167,417.78

LOTTERY PROJECT

TOTALS

JUNE 30, 1999

JUNE 30, 1998

0.00 $

451,699.88 $

414,348.30

846.04

167,417.78

123,183.19

$

619,117.66 $

0.00 $ 619,117.66 $ =====5=3=8=,:3::7::7::.:5=3:=

$

362,834.46

$

362,834.46

$

846.04

$

362,834.46

67,282.06

.'

8,484.10

$

362,834.46 $

76,612.20

$

256,283.20

0.00 $

$

256,283.20 $

$

619,117.66 $

$
0.00 =.;;;.;;... 0.00 $

256,283.20 $

451,526.33 10,239.00

0.00

256,283.20 $ _ _4~"6"1',-7=6'5=:.3;3...

0.00 $ 619,117.66 $ =====5=3=8=,=3=77=.=5=3=

- 21 -

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND
YEAR ENDED JUNE 3D, 1999

REVENUES
State Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Capital Outlay Land and Land Improvements Building and Building Improvements Equipment
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
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

REGULAR

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$

49,174.42

$

0.00

$

0,00 $

49,174.42

$

0.00

$

54,638.42

$

0.00 $

54,638.42

$

0.00 $ .'

-5,464.00

$

4,775.00

-4,775.00

$

0.00

$

0.00 $

-5,464.00

0.00

5,464.00

FUND BALANCE JUNE 30

$

0.00 $ ======0=.00=

See notes to the general purpose financial statements.
-22 -

EXHIBIT"H"

SPECIAL PURPOSE LOCAL OPTION SALES TAX

LOTTERY PROJECT

TOTALS

YEAR ENDED

JUNE 30,1999

JUNE 30,1998

$

$

907,469.17

12,268.95

$

919,738.12 $

0.00 $ 0.00 $

49,174.42
907,469.17 $
12,268.95

694,749.85 5,333.99

968,912.54 $ _ _7~=0;:0;.,0;.8;:3;.8,.4;...

$

12,570.00 $

967,450.09

7,342.40

0.00 $

12,570.00
1,022,088.51 $
7,342.40

449,067.81 82,088.45

$

987,362.49 $

0.00 $ 1,042,000.91 $

531,156.26

$

-67,624.37 $

0.00 $

-73,088.37 $

168,927.58

.'

$

22,381.24

-150,000.00 $

$

-127,618.76 $

$

-195,243.13 $

451,526.33

$
-4,775.00
-4,775.00 $

27,156.24 $
-159,550.00
-132,393.76 $

133,686.73 -123,155.46
10,531.27

-4,775.00 $
4,775.00

-205,482.13 $
461,765.33

179,458.85 282,306.48

$

256,283.20 $

0.00 $

256,283.20 $ =====4=6=1=,=76=5=.=3=3=

- 23-

CITYOF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEARENDED JUNE30, 1999

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

Agriculture, U, S. Department of ChildNutrition Cluster Pass-Through From Georgia Department of Education Foodand Nutrition Program Food Services SchoolBreakfast Program 1999 Grant National SchoolLunch Program 1999 Grant

. 10.553 10.555

Total ChildNutrition Cluster

Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1)

10.550

Total U. S. Department of Agriculture

Education, U.S. Department of Special Education Cluster Pass-ThroLigh From Georgia Department of Education Individuals with Disabilities Education Act Part B - SpecialEducation Flow Through 1999 Grant Preschool 1999 Grant CapacityBuilding Improvement Grant 1999 Grant

84.027 84.173 84.173

Total Special Education Cluster

Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education Ad. Title I
Grantsto LocalEducational Agencies 1998 Grant 1999 Grant
Title II Eisenhower Professional Development 1999 Grant
Title VI Innovative Education Program Strategies 1999 Grant
Goals 2000 Stateand LocalEducation Systemic Improvement Grants
1999 Grant Safeand Drug-Free Schools
1999 Grant Vocational Education - BasicGrantsto States
High School Program Basic Grant 1999 Grant

84.010 84.010 84.281 84.298 84276 84.186
84.048

Total U. S. Department of Education

PASSTHROUGH
ENTITY 10
NUMBER
NlA $ NlA
$
NlA $
NlA $ NlA NlA
$
NlA NlA NlA NlA NlA NlA
NlA $

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

36.500.86 141,209.78 $ 177.710.64 $

(2) 345,695.01 (3) 345.695.01

25.134.29 202,844,93 $

25,13429 370.829.30

114,045.00 $

114,127.38 (3)

6.316.00

.' 6.316.00

4.823.00

5.000.00 (3)

125,184.00 $

125,443.38

5.000.00 94,666.00
18.710.00
5.330.00
75.000.00 4.940.47

5.000.00 94.666.00
18,500.00
5.330,00
75.000.00 4,940,47

9.696.00 338.526.47 $

9.696.00 338,575.85

Total FederalFinancial AssIstance
NlA =NotAvailable

-24-

$

541,371.40 $

709,405.15

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE30. 1999
Notesto the Schedule of ExoenditUres of Federal Awards
(1) The amountsshownfor the FoodDistribution Program represents the Federally assigned valueof nonmonetary assistance for donated commodities received and/orconsumed by the system duringthe currentfiscal year.
(2) Expenditures for the SchoolBreakfast Program were not maintained separately and are included in the 1999National School LunchProgram.
(3) Expenditures for this program includeState,and/orOtherFunds. Expenditures are not maintained by fund source.
MajorPrograms are identified by an asterisk(*) in front of the CFDAnumber.
The Boarddid not provideFederal Assistance to any Subrecipient.
The accompanying schedule of expenditures of Federal awards includes the Federal grantactivityof the City of Jefferson Boardof Education and is presented on the modified accrual basisof accounting which is the basisof accounting used in the presentation of the generalpurpose financial statements.

SCHEDULE "1"

."

Seenotesto the generalpurposefinancial statements.

25

CITYOF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF STATE REVENUE YEARENDED JUNE30. 1999

SCHEDULE -2-

AGENCY/FUNDING

GOVERNMENTAL FUNDTYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

GRANTS Education, Georgia Department of QualityBasic Education Generaland CareerEducation Programs Special Education Programs Remedial Education Program Media CenterPrograms Staff Development Programs IndirectCost Pupil Transportation Regular Bus Replacement SpecialInstructional Assistance In-School Suspension Mid-termAdjustment Counselors Grades4 and 5 TechnologySpecialist Local Fair Share Educational Equalization Funding Grant Food Services Vocational Education Other State Programs Apprenticeship Program At-Risk SummerSchoolProgram Environmental ScienceProgram Health Insurance Mentor Teacher Program PreschoolHandicapped Program Remedial SummerSchoolProgram Student Records Teachers' Retirement Year 2000 ProjectFunding LotteryPrograms AssistiveTechnology Computersin the Classroom

$ 2,475,633.00 731,190.00 57,552.00 109,343.00 32,532.00 729,787.00
53,481.00 16,328.00 140,361.00 42,590.00 109,284.00 10,460.00 28,842.00 -555,191.00 281,040.00
$ 1,107.09
2,000.00 2,450.61
500.00 72,135.78
972.00 27,362.00
3,205.99 899.25
6,003.03 18,964.80

28,218.00
4,741.17 23,456.00

$ 2,475,633.00 731,190.00 57,552.00 109,343.00 32,532.00 729,787.00

53,481.00 16,328.00 140,361.00 42,590.00 109,284.00 10,460.00 28,842.00 -555,191.00 281,040.00 28,218.00
1,107.09

2,000.00

2,450.61

.'

SOO.OO 72,135.78

972.00

27,362.00

3,205.99

899.25

6,003.03

18,964.80

4,741.17 23,456.00

Georgia State Financing and Investment Commission Reimbursement on Construction Projects

$

49,174.42

49,174.42

Office of School Readiness Pre-Kindergarten Program

60,633.83

60,633.83

Office of Treasuryand FiscalServices Public SchoolEmployees Retirement

11,323.00

11,323.00

CONTRACTS Education, GeorgiaDepartment of ReadingFirst ProgramGradesK - 3

25,200.00

25,200.00

$ 4,435,355.55 $

117,049.00 $

49,174.42 $ 4,601,578.97

See notes to the generalpurposefinancialstatements.

-26

CITYOF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEARENDED JUNE30.1999

SCHEDULE -3-

PROJECT
Payment of principal and interestdue Series 1973 and 1996 Bonds
Construction of additional classrooms, remodeling and renovating existing classrooms, instructional and support space,recreational fields and grounds, and to provide fumishings, equipment and fixturesfor such areas at Jefferson High School, JeffersonMiddleSchool, and Jefferson Elementary School

ORIGINAL ESTIMATED
COST(1)

$

978,678.00 $

3,276,322.00

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS

978,678.00 $

150,000.00 $

50,000.00

3,598,618.95

982,587.49

515,520.47

$

4,255,000.00 $

4,5n,296.95 $

1,132,587.49 $ 565,520.47

(1) The Board's original cost estimate as specified in the resolution callingfor the imposition of the LocalOption
I"
Sales Tax.
(2) The Board'scurrentestimateof total cost for the projects. Includes all costfrom projectinception to completion.
(3) The votersof Jackson Countyapproved the imposition of a 1% salestax to fund the aboveprojects. Amountsexpended for these projects may includesalestax proceeds, state,local property taxesand/orother funds over the life of the projects.

See notesto the generalpurposefinancial statements.

-27-

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF EXPENDITURES LOTIERY PROGRAMS YEAR ENDED JUNE 30. 1999

SCHEDULE "4"

EXPENDITURES
Current Instruction

ASSISTIVE TECHNOLOGY

COMPUTERS IN THE
CLASSROOM

PRE-KINDERGARTEN PROGRAM

TOTAL

$

4,741.17 $

23,456.00 $

60,633.83 $

88,831.00

RECAP:

Salaries and Benefits

Pre-Kindergarten Program

$

Other Expenditures

Assistive Technology

Computers in the Classroom

Pre-Kindergarten Program

46,668.25
4,741.17 23,456.00 13,965.58

$

88,831.00

.'

See notes to the general purpose financial statements.

-28-

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

SCHEDULE "5"

Minimum Expenditure Requirements (Total Allotment) Expenditures on Combined Program Basis
Salaries 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

$

3,483,002.00 $ _ _--'1-"-0...4;.","7.;"7.;1--'.-=0..0;;..

$

3,701,476.66

238,277.28 $ _ _--=-2:..1..:5.!.,.:4;...7;..4...:..2:=.5;:..

$

3,939,753.94

-45,497.44

3,894,256.50
."

$

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

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

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, 1999

GENERAL AND CAREER EDUCATION PROGRAMS Kindergarten (*) Grades 1 - 3 (*) Sub-Total - K-3 Grades 4 - 5 (*) Grades 6 - 8 (*) Grades 9 - 12 (*) High SChool Laboratories (*) Vocational Education Laboratories r) Total General and Career Education Programs
SPECIAL EDUCATION PROGRAMS Regular Programs Category I (*) Category II r) Category III (*) Category IV (*) Category V (*) Sub-Total Regular Category VI (Gifted) (*) Total Special Education Programs .
REMEDIAL EDUCATION PROGRAM C*) Total Fourteen Weighted Programs
MEDIA CENTER PROGRAMS Salaries Operations Total Media Center Programs
Total Fourteen Weighted and Media Center Programs

ALLOTMENTS FROM GEORGIA DEPARTMENT OF

REQUIRED

ORIGINAL

0/0

ORIGINAL

MID-TERM

$

336,250.00

$

302,625.00 $

701,516.00
s $ 1,037,766.00 90

631,364.40
933,989.40 $

312,269.00 90

281,042.10

509,213.00 90

458,291.70

270,273.00 90

243,245.70

192,509.00 90

173,258.10

153,603.00 90

138,242.70

$ 2,475,633.00

$ 2,228,069.70 $

0.00 0.00 109,284.00 109,284.00

$

676,706,00

$

609,035.40 $

0.00

."

$

676,706.00 90 $

609,035.40 $

54,484.00 90

49,035.60

$

731,190.00

$

658,071.00 $

$

57,552.00 90 $

51,796.80 $

$ 3,264,375.00

$ 2,937,937.50 $

0.00
0.00 0.00 109,284.00

$

86,572.00 90 $

n,914.80 $

0.00

22,n1.00 100

22,n1.00

$

109,343.00

$

100,685.80 $

0.00

$ 3,373,718.00

$ 3,038,623,30 $

109,284.00

STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development
Total Staff Development Programs r) Identifies Fourteen Weighted Programs.
see notesto the general purposefinancial statements.

$

10,248.00

$

10,248.00 $

0.00

22,284.00

22,284.00

0.00

$

32,532,00 100 $

32,532.00 $

0.00

- 30

SCHEDULE "6"

EDUCATION TOTAL
REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNTOF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$

302,625.00 $

340,074.52 $

12,931.59 $

353,006.11

631,364.40

655,029.07

39,103.77

694,132.84

$

933,989.40 $

995,103.59 $

52,035.36 $ 1,047,138.95 $

0.00

281,042.10

314,403.86

16,948.51

331,352.37

0.00

458,291.70

556,324.03

23,874.23

580,198.26

0.00

352,529.70

528,013.99

43,251.02

571,265.01

0.00

173,258.10

177,216.55

11,757.96

188,974.51

0.00

138,242.70

174,565.62

22,577.86

197,143.48

0.00

$ 2,337,353.70 $ 2,745,627.64 $

170,444.94 $ 2,916,072.58

$

609,035.40

$

$

609,035.40 $

49,035.60

$

658,071.00 $

$

51,796.80 $

$ 3,047,221.50 $

421.98 $ 184,316.26 436,275.58
671.71 15,847.20
637,532.73 $
132,600.89
770,133.62 $
53,677.99 $
3,569,439.25 $

34,243.71 $ 2,338.59 5,242.25
522.58
42,347.13 $
2,074.47
44,421.60 $ 607.71 $
215,474.25 $

34,665.69 186,654.85 441,517.83
1,194.29 15.847.20
679,879.86
134,675.36
814,555.22
54,285.70
3,784,913.50

.'
0.00 0.00
0.00

$

77,914.80 $

132,037.41

$

132,037.41

0.00

22,771.00

$

22,803.03

22,803.03

0.00

$

100,685.80 $

132,037.41 $

22,803.03 $

154,840.44

$ 3,147,907.30 $ 3,701,476.66 $

238,277.28 $ 3,939,753.94 $

0.00

$

10,248.00

22,284.00

32,532.00

$

25,558.56 $

25,558.56

11,300.37

11,300.37

$

36,858.93 $

36,858.93 $ _ =......_ _.0..-0.0..

- 31 -

SECTIONll

COMPLIANCE AND INTERNAL CONTROL REPORTS

."

RUSSELL W. HINTON
STATEAUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 25, 2000

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City ofJefferson 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 ofJefferson Board ofEducation as of and for jhe year ended June 30, 1999, and have issued our report thereon dated February 25,2000. 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 Auditinf: 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 ofmaterial 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 Auditinf: Standards.
Internal ContrQI Over Financial Re.pQrtinf:
In planning and performing our audit, we considered City ofJefferson 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 certain matters involving the internal control over financial reporting and its
99YB-40

operation that we consider to be reportable conditions. 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 financial data consistent with assertions ofmanagement in the financial statements. Reportable conditions are described in the accompanying Schedule of Findings and Questioned Costs as items FS-7791-99-01, FS-7791-99-03 and FS-7791-99-04.
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 ofperforming their assigned functions. Our consideration of the internal control over financial 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, of the reportable conditions described above, we consider item FS-7791-99-04 to be a material weakness.
This report is intended solely for the information and use of management, members of the City of Jefferson Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
~ ~....J..:k. ."
Russell W. Hinton State Auditor
RWH:jb 99YB-40

RUSSELL W. HINTON
STATEAUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
February 25,2000

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City ofJefferson Board ofEducation
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 U,S. Office ofManagement and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 1999. 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 oflaws, regulations, contracts and grants applicable to each ofits major Federal programs is the responsibility ofCity ofJefferson Board ofEducation'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 GoYernment 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 ofJefferson Board ofEducation's compliance with those requirements.

99SA-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, 1999.
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 ofEducation'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 ofone or more ofthe internal control components does not reduce to a relatively low level ofrisk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended solely for the information and use of management, members ofthe City of Jefferson Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to.be and should not be used by anyone other than these specified parties.
Respectfully submitted,
~w~t$ Russell W. Hinton State Auditor
RWH:jb 99SA-1O

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. 1999

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-7791-97-02 FS-7791-98-01

Further Action Not Warranted Unresolved - See Corrective Action/Responses

CORRECTIVE ACTIONIRESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7791-98-0l

Due to current staffing limitations and budgetary considerations, the Board has decided not to pursue the recording of general fixed assets on the financial statements.

t"

SECTION IV

FINDINGS AND QUESTIONED COSTS

."

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 1999

I SUMMARY OF AUDITOR'S RESULTS

1. Type ofRe.port Issued on the Financial Statements The auditor's opinion on the City ofJefferson Board ofEducation's financial statements was qualified for various departures from generally accepted accounting principles.

2. Re.portable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the City of Jefferson Board ofEducation disclosed financial statement reportable conditions related to the following control categories.

Inventories General Ledger

General Fixed Assets

Of the reportable conditions described above, General Fixed Assets is considered to be a material weakness.

3. Noncompliance Material to the Financial Statements The audit ofthe City of Jefferson Board of Education disclosed no instances of noncompliance that were deemed to be material to the financial statements.

4. Re.portable 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 ofRe.port Issued on Compliance for Maior 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 &.ported by Section .510(a) ofOMB Circular A-133 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-133.

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

8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.

9. Low Risk Auditee
The City ofJefferson Board ofEducation was audited as a low riskauditee based on a waiver granted
by the U. S. Department ofEducation.

- 1-

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1999
IT FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL LEDGER Inadequate Accounting Procedures Reportable Condition Finding Control Number: FS-7791-99-01
The City of Jefferson Board ofEducation's accounting procedures were insufficient to provide for adequate internal control over the journal entry process. Journal entries were not supported by either adequate documentation or sufficient explanation. This condition was a result ofmanagement's failure to adequately document journal entries.
This deficiency in accounting procedures was discussed with the Superintendent. In addition, the accounting personnel ofthe Board were given instructions in the proper accounting procedures for journal entries which include the necessity of all journal entries being documented prior to entry into the accounting system.
BUDGET AND BUDGET EXECUTION Failure to Adopt a Balanced Budget Nonmaterial Noncompliance Finding Control Number: FS-7791-99-02
,.
A review of the budget process indicated the City ofJefferson Board ofEducation failed to adopt a balanced budget for its Special Revenue Fund as required by Chapter 32 of the Financial Management for Georgia Local Units of Administration (FMGLUA). Chapter 32 of FMGLUA states "School boards must adopt balanced budgets". This noncompliance was the result ofthe Board's failure to budget revenue in any ofthe Lottery or Federal Program Funds within the Special Revenue Fund. Appropriate procedures should be established and implemented by the Board to ensure that budgets are prepared in accordance with requirements ofFMGLUA.
INVENTORIES Inadequate Inventory Records Reportable Condition Finding Control Number: FS-779l-99-03
Property management records maintained by the Board for the Special Revenue Fund - Lottery Program were incomplete and failed to meet property management standards as set forth in Chapter 41, of the Financial Management for Georgia Local Units ofAdm:inistratiQn (FMGLUA).
The inventory records as presented for audit did not contain additions made in the prior year and were incomplete as to purchases made in the period under review. Additionally, the inventory records contained items showing Lottery as the funding source, however, financial records revealed that funds other than Lottery had been used for the purchase. AlSQ, the inventory records did not contain all of the required components relating tQ description (including make and model), vendor, acquisition date, condition, cost and date of disposal.
-2-

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1999
IT FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
INVENTORIES Inadequate Inventory Records Reportable Condition Finding Control Number: FS-7791-99-03
This condition occurred because management failed to comply with State inventory guidelines and did not
ensure that all equipment purchases were included in the property management records, An inventory system
should be implemented that provides for the identification of all equipment purchased as outlined in Chapter 41, of the FMGLUA. Perpetual records should include historical information regarding additions and deletions made to the equipment inventory during each fiscal year (when applicable). Periodic physical inventory counts should be performed and reconciled to the property records to ensure that accuracy of inventory records.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior. Year Finding Control Number: FS-7791-99-04
,.
The City of Jefferson Board of Education did not maintain a system wide 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 ofa 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.
ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
-3-