City of Jefferson Board of Education, a component unit of the city of Jefferson, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2001

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

EXHmITS

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

6

D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

7

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

I

SPECIAL REVENUE FUND

/'

E

COMBINING BALANCE SHEET

20

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

22

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

24

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

25

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

26

2 SCHEDULE OF STATE REVENUE

28

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

29

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

30

5

BY SITE

31

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY - TABLE OF CONTENTS -
SECTIONll COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133
SECTIONm AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUES~ONED 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
I I
I

RUSSELL W. HINTON
STATEAUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street. S.w.. Suite 214 Atlanta. Georgia 30334-8400
May 17,2002

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 ofEducation, a component unit ofthe City ofJefferson, Georgia, as ofand for the year ended June 30, 2001, as listed in the table ofcontents. 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 general-purpose financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the 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 of Education'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:

200lARL-13

* The general-purpose financial statements of the Board of Education did not contain a
General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting principles.
* 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-pwpose financial statements.
* The Board' of Education did not recognize as expenditures, in the year ended
June 30,2001, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2001. Also funds received, subsequent to June 30, 2001, from the Georgia Department ofEducation for theState's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were improperly recorded in the year ended June 30, 2001. 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-pwpose fmancial statements of the matters referred to in the preceding paragraph, the general-pwpose financial statements referred to above present fairly, in all material respects, the financial position of the City of Jefferson Board of Education as ofJune 30, 2001, and the results ofits operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated May 17, 2002, 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. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Our audit was performed for the pwpose 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 5), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, are presented for pwposes of additional analysis and are not a required part of the
200 1ARL-13

general-purpose fmancial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe general-purpose financial statements and in our opinion, except for the effects ofthe matters referred to in the third paragraph, such information is fairly stated, in all material respects, in relation to the general-purpose financial statements taken as a whole.
.A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24.

RWH:as 2001ARL-13

Respectfully submitted,

--

.U)~

R sell W. Hinton State Auditor

CITY OF JEFFERSON BOARD OFEDUCATION - JACKSON COUNTY 1

CllY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNlY COMBINED BALANCE SHEET
ALL FUNDTYPES AND ACCOUNT GROUP JUNE 30. 2001

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
Inventories Food Donated Commodities Purchased Food
Amountto be Provided in Future Years For Paymentof Capital LeaseAgreements

GOVERNMENTAL FUND

SPECIAL

GENERAL

REVENUE

FUND

FUND

$ 1,255,487.04 $

3,372.44

103,822.70

301,180.13

184,162.51

6,367.81 1,583.98

Total Assets

$ 1,660,489.87 $==1~ 95~ ,48~ 6.7~4

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable ExpiredGrant BalancesPayable Contrads Payable RetainagesPayable Deferred Revenue Capital LeaseAgreements
Total Liabilities
FUND EqUllY
Fund Balances Reserved For Continuation of FederalPrograms For Inventories Food Donated Commodities Purchased Food For Purposeof Bond Issue For SPLOSTProjeds Unreserved Undesignated
Total Fund Equity

$

5,350.65 $

8,118.52

160.88

45,596.06

6,201.78

7,124.19 .

8,000.00

$

11,713.31 $

68,838.n

$

6,367.81

1,583.98

$ 1,648,n6.56 $ 1,648,n6.56 $

118,696.18 126,647.97

Total Liabilitiesand Fund Equity

$

The notesto the general-purpose financialstatements are an integralpart of this statement. -2-

1,660,489.87 $=~ 19~ 5,4~ 86.~ 74

EXHIBIT "A"

TYPES CAPITAL
PROJECTS FUND

$

516,547.26

4,027,368.79

239,075.14

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS

(Memorandum Only)

JUNE 30, 2001

JUNE 30, 2000

$ 1,775,406.74 $

851,067.08

4,131,191.49

8,325,991.03

724,417.78

693,444.33

- - - - - $--=99,~727=.64-

6,367.81 1,583.98
99,727.64

6,732.45 1,305.92
166,441.17

$ 4,782,991.19 $

99,727.64 $ 6,738,695.44 $ 10,044,981.98

$

13,469.17 $

45,756.94

13,325.97

$

670,512.18

670,512.18

342;249.39

342,249.39

8,000.00

$.

99,727.64

99,727.64

$ 1,012l61.57 $

. 99,727.64 $ 1,193,041.29 $

63,176.74 50,330.96 2,972.80 251,358.50 12,598.08
166,441.17
546,878.25

$ 3,033,352.44 736,877.18
0.00
$ 3,nO,229.62

$

10,513.78

$

6,367.81

1,583.98

3,033,352.44

736,8n.18

6,732.45 1,305.92 8,122,364.36 278,308.04

1,767,472.74

1,078,879.18

$ 5,545,654.15 $ 9,498,103.73

$ 4,782,991.19 $

99,727.64 $ 6,738,695.44 $ 10,044,981.98

-3-

CITY OF JEFFERSON BOARDOF EDUCATION - JACKSON COUNTY COMBINEDSTATEMENTOF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUNDTYPES YEARENDEPJUNE 30, 2001

FUND BALANCEJUNE 30

$

The notes to the general-purpose financial statements are an integralpart of this statement -4-

1,648,n6,56 $=====1=2=6=,6;,4,;7,.=9:7....

r
EXHIBIT"B"

CAPITAL PROJECTS
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

$ 6,398,759.21 .$ 5,571,809.74

757,824.24

684,680.n

$ 1,023,511.12

3,168,738.11

2,840,663.98

428,524.50

1,032,830.52

480,411.96

$ 1,452,035.62 $ 11,358,152.08 $ 9,5n,566.45

$ 6,281,983.69 $ 5,405,983.88

$

1,510.00

5,597,447.64

255,913.08 209,432.02 160,154.28 326,365.45 580,525.83 115,746.33 506,452.68 99,184.32
41,898.28 65,452.50 449,423.95 59,665.04 5,597,447.64

317,440.11 316,104.31 149,822.74 195,765.56 488,857.40 101,528.82 468,363.11 88,960.38 60,085.97 69,309.45 412,442.81
51,177.62 1,811,830:65

66,713.53 10,635.70

62,296.14 15,053.09

$ 5,598,957.64 $ 14,826,994.32 $ 10,015,022.04

$ -4,146,922.02 $ -3,468,842.24 $ -437,455.59

$

65.93 $ 9,074,287.99

$ -483,520.76

-483,586.69

-191,039.79

$ -483,520.76 $ -483,520.76 $ 8,883,248.20

$ -4,630,442.78 $ -3,952,363.00 $

8,400,672.40

9,498,103.73

8,445,792.61 1,054,666.36

-364.64 278.06

-724.10 -1,631.14

$ 3,nO,229.62 $ 5,545,654.15 $ 9,498,103.73 -5-

CITYOF JEFFERSON BOARDOF EDUCATION - JACKSONCOUNTY COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGETAND ACTUAL- (NON-GMP BASIS) GENERAL AND SPECIALREVENUE FUNDS
YEARENDEDJUNE 30, 2001

EXHIBITC

GENERALFUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 5,n6,828.69 $ 6,273,554,51

2,091,386.00 146,500,00

2,145,226.99 408,547,06

Total Revenues

$ 8,014,714,69 $ 8,827,328,56 .

EXPENDITURES

Current Instruction Support services Pupil services Improvement of Instructional services Educational Mediaservices GeneralAdministration School Administration BusinessAdministration Maintenance and Operationof Plant StudentTransportation services central Supportservices Other Supportservices Food ServicesOperation Communityservices Operations
Debt Service

$ 5,966,926,39 $ 5,846,095,59

171,459,00 258,408,58 128,078,72 165,994,00 522,893.00 110.092,00 497273,00 115,708,00
n.882,00

229,797,23 99,249,36 160,154,28
315.115.51 578,792,60 114.236,33 506.452,68
98,807,88 29,541.93 11.430.91
96.78 57.465,04 n,349,23

Total Expenditures

$ 8.014,714.69 $ 8,124,585.35

Excessof Revenues over (under) Expenditures

$

0.00 $ 702.743.21

OTHER FINANCING SOURCES (USES)

Other Sources Other Uses

$

-65,93

Total Other FinancingSources(Uses)

$

-65.93

Excessof Revenues and Other Financing Sources

over.(under)Expenditures and Other Financing

Uses

$

0.00 $ 702,677.28

FUND BALANCEJULY 1, 2000

905,376.80

946,099,28

Adjustments Food Inventory- Net Changein Period
DonatedCommodities . Purchased Food

SPECIALREVENUEFUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 130,544.70 $ 125,204,70

768,067,00

757,824,24

204.492,00

195,758.96

$ 1,103,103,70 $ 1,078,787.90

$ 446,278,00 $ 435,888,10

11.421,00 112,229.70

26,115,85 110,182.66

5,n5,00 2,236,00

11.249,94 1,73323

7,100,00 6.854,00 46,000,00 462210.00 3.000,00

376,44 12,356.35 54,021,59 449.327,17 2,200.00

$ 1,103,103,70 $ 1,103,451.33

$

0.00 $ -24,663.43

$

65.93

$

65.93

$

0,00 $ -24,597,50

110,000.21

151.332,05

30,144,74

-364.64 278.06

FUND BALANCEJUNE 30. 2001

$ 905,376.80 $ 1,648,n6.56

$ 140,144.95 $ 126,647,97

The notes to the general-purpose financial statements are an integralpart of this statement -6-

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001

EXHffiITID"

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The City of Jefferson Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The School District is not organized as a separate legal entity and does not have the power to levy taxes or issue bonds. Accordingly, the City ofJefferson Board ofEducation is determined to be a component unit ofthe City ofJefferson, Georgia, which is the primary government.
FUND ACCOUNTING
The School District uses funds and an account group to report on its financial position and the results ofits 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 School District. 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 School District, 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 School District's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to aceount for all financial resources of the School District 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.

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CITY OF JEFFERSON BOARD OF EDUCAnON JACKSON COUNTY NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001

EXHIBIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. .These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
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 ofthese funds present increases (i.e., revenues and other fmancing 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 amountof the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The School District considers receivables collected.within sixty days after yearend to be available and therefore susceptible to accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales taxes, intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accrual . .Revenue from grants and donations is recognized in the fiscal year in which all eligibility .requirements have been satisfied.
Expenditures are generally recognized when the related fund liability is incurred.

- 8-

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001

EXHIBIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 2001, a substantial number ofpersonnel ofthe School District were employed for a one hundred and ninety day period beginning in August 2000 and ending in early June 2001. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2000 and ending in August 2001. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the School District in the same twelve months. As of June 30,.2001, compensation under these employment contracts had been earned, but two ofthe twelve monthly payments, due for July and August 2001, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30,2001. Also, the State's portion ofthe compensation paid in July and August 2001 was received and recorded as revenue in thefiscal year subsequent to June 30,2001. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were recorded in the year ended June 30, 2001. 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 financial plan for the School

District.'s fiscal year and is based upon estimates of expenditures together with pro.bable funding sources. There is no statutory prohibition regarding overexpenditure ofthe budget at any level. The

I

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

CASH AND CASH EQUIVALENTS

COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.

-9-

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE GENERALPURPOSE FINANCIAL STATEMENTS JUNE 30. 2001

EXHmIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

INVESTMENTS

COMPOSITION OF INVESTMENTS

'Investments made by the School District in nonparticipating interest-earning contracts (such as

certificates ofdeposit) 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 ofGeorgia

Annotated Section 36-83-4 authorizes the School District to invest its funds. In selecting among

options for investment or among institutional bids for deposits, the highest rate ofreturn 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.

- 10-



.'

,#"

CITY OF JEFFERSON BOARD OF EDUCATION- JACKSON COUNTY NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001

EXHffiIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PROPERTY TAXES

The City ofJefferson fixed the property tax levy for the 2000 tax year (calendar year) on January 15, 2001 (levy date). Taxes were due on March 15,2001 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2001. The Jefferson City Clerk bills and collects the property taxes for the School District and remits the balance oftaxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2001 for maintenance and operations amounted to $2,145,226.99.

The tax millage rate levied for the 2000 tax year (calendar year) for the City ofJefferson Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

11.26 mills

SALES TAXES

Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $1,023,511.12 and was recorded in the Capital Projects Fund. The State will terminate collection ofthis tax once an additional $668,894.88 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 Pwpose Local Option Sales Tax (SPLOST). In fiscal year 2001, the School District provided $150,236.00 ofSPLOST proceeds to the City Govermnent 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 ofpurchase. 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 School District has the following types of interfund transactions:

- 11 -

,CITY OF JEFFERSON BOARD OF EDUCAnON - JACKSON COUNTY NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001

EXHffiIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 t~ansfers are recorded for all interfund transactio~s other than reimbursements.

MEMO~DUM ONLY - TOTAL COLUMNS

Total columns on the general-purpose financial statements are captioned "Memorandum Only" to

,indicate that they are presented only to facilitate financial analysis. Data in these columns do not

present financial position or results ofoperations 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.

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 ofmoney 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 pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. : Ifa depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.

Acceptable security for deposits consists of anyone of or any combination of the following:

, (i) Surety bond signed bya surety company duly qualified and authorized to transact business

within the State of Georgia,

.

(2). Insuranc. e.on accounts provided by the Federal Deposit Insurance Co.rporation,

(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,

- 12 -

CITY OF JEFFERSON BOARD OF EDUCAnON - JACKSON COUNTY NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2601

EXHIBIT"D"

Note 2: DEPOSITS AND INVESTMENTS

(6) Industrial revenue bonds and bonds of development authorities created by the laws ofthe 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, 2001, the bank balances were $2,437,309.83. The amounts ofthe 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 School District or by the School District's agent in the School District's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the School District'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 School District's name.)

The School District's deposits are classified by risk category at June 30, 2001, as follows:

Risk Category

Bank Balance

1

$ 300,000.00

2

2,115,449.20

3

21,860.63

Total

$ 2.437.309.83

CATEGORIZATION OF INVESTMENTS At June 30, 2001, the carrying value of the School District's total investments was $4,028,419.46 which is materially the same as fair value. The investments are classified as to risk categories as follows:

I I

- 13-

CITY OF JEFFERSON BOARD OF EDUCAnON - JACKSON COUNTY

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

.

JUNE 30, 2001

EXHlBIT"D"

Note 2: DEPOSITS AND INVESTMENTS

TyPe of Investment

Risk Categories 2

Repurchase Agreements $'==~!Q0,!00! $ 4 027 368,79 $

Local Government Investment Pools.

Totallnvestments

Carrying

Fair

3

Amount

Value

000 $ 4,027,368,79 $ 4,027,368,79

1,050,67

1,050,67

$ 4028,419.46 $ 4028419,46

The carrying amounts shown above includes amounts maintained in an investment pool by the State
ofGeorgia, Office ofTreasury and Fiscal Services in which the School District owns no identifiable securities. The investment policy ofthe State ofGeorgia, Office ofTreasury and Fiscal Services for the Local Government Investment Pool (primary Liquidity Portfolio) does not provide for
or investment in derivatives similar investments. A description ofthe Primary Liquidity Portfolio is
as follows:

The Primary Liquidity Portfolio consists ofGeorgia Fund 1, which isa combination local and state

government investment pool, and Fund 6, Georgia Fund 1 is a stable net asset value investment pool

which follows Standard and Poor's criteria for AAAm rated money market funds. The pool is not

registered with the Securities and Exchange Commission as an investment company but does operate

Georgia Fund 1 in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and

isconsidered to be a2a-7like pool. 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 values 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 ofGeorgia's state agencies, colleges and universities; and current operating

funds ofthe 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 o! instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2001, was 39 days. The average investment duration for Fund 6 on June 30, 2001, was 6 months.

Note 3: NON-MONETARY TRANSACTIONS

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

- 14-

CITY OF JEFFERSON BOARD OF EDUCAnON - JACKSON COUNTY NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001

EXHIBIT"D"

Note 4: RISK MANAGEMENT

The School District is exposed to various risks of loss related to torts; theft of, damage to, arid destruction ofassets; errors or omissions;job related illness or injuries to employees; natural disaster and unemployment compensation.

The School District participates in the Georgia School Boards Association Risk and Insurance Management System, a public entity risk pool organized on July 1, 1994, to develop and administer a plan to reduce risk of loss on account of general liability, motor vehicle liability, or property damage, including safety engineering and other loss prevention and control techniques, and to administer one or more groups of self-insurance funds, including the processing and defense of claims brought against members ofthe system. The School District pays an annual premium to the system for its general insurance coverage. Additional coverage is provided through agreements by the system with other companies according to their specialty for property, boiler and machinery, 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 School District is self-insured with regard to unemployment compensation claims. The School District 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 ofthat loss can be reasonably estimated.

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

2000 2001

Beginning of Year Liability

Claimsand Changes in Estimates

Claims Paid

End ofYear Liability

$

0.00 $

0.00 $

0.00 $

0.00

$

0.00 s

740.61 $

740.61 $

0.00

The School District 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 ofworkers' compensation self-insurance for its member organizations. The School District 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.

The School District participates in the Georgia Education Workers' Compensation Trust, a public entity risk pool organized on December 1, 1991, to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The School District pays an annual premium to the Trust for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Trust with the United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Trust in excess of $250,000.00 loss per occurrence, up to $2,000,000.00.

- 15 -

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY , NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHIBIT"D"

Note 4: RISK MANAGEMENT

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

Position Covered

Amount

Superintendent All Employees '

$ 50,000.00 $ 200,000,00

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES

TheCity 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.

'

GENERAL OBLIGATION DEBT OUTSTANDING

The changes in General Long-Term Debt during the fiscal year ended June 30, 2001, were as

follows:

'

Capital Leases

Balance July 1, 2000

$ 166,441.17

Deductions Payments

66,713,53

Balance June 30, 2001 '

$ 99,727.64

At June 30, 2001, payments due by fiscal year which includes principal and interest for these items

are as f o l l o w s : '

'

Fiscal Year Ended June 30

Capital Leases

2002 2003

Total Principal and Inter~st

,

"

Deduct: Imputed Interest

$ 65,341.23 41,899.09
$ 107,240.32
7,512.68

Net Present Value of Future Minimum Lease Payments

$ 99.727.64

- 16-

,"

.,;

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001

EXHIBIT"D"

Note 6: ON-BEHALF PAYMENTS

The School District has "recognized revenues and expenditures in the amount of $93,512.60 for health insurance and retirement contributions paid on the School District's behalfby the following State Agencies.

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance ofNon-Certified Personnel In the amount of $74,743.26

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $5,899.34

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$12,870.00

Note 7: SIGNIFICANT COMMITMENTS

The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2001:

Project
High School Gym Renovations New Jefferson Middle School

Unearned Executed Contracts
$ 653,290.64 . 2,317,532.72
$ 2.970.823.36

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 School District believes that such disallowances, if any, will be immaterial to its overall financial position.

The School District is a defendant in various legal proceedings pertaining to matters incidental to the performance ofroutine School District operations. The ultimate disposition ofthese proceedings is not presently determinable, but is not believed to be material to the general-purpose financial statements.
- 17-

CITY OF JEFFERSON BOARD OF EDUCAnON - JACKSON 'COUNTY NOTES TO TIlE GENERAL-PURPOSE FINANCIAL STATEMENTS " JUNE 30. 2001

EXHIBIT "0"

Note 9: SUBSEOUENT EVENTS

On September 18,2001, the voters of Jackson County voted in favor of a Special Purpose Local Option Sales Tax referendum for educational purposes. The imposition ofthe tax approved by the voters, as stated on the Official Ballot of Jackson County, is as follows:

"Shall a special one percent sales and use tax be imposed in Jackson County (such tax to be a
continuation ofthe existing'1% sales and use tax and not an additional sales and use tax) for a period oftime not to exceed five years (20 calendar quarters) commencing upon the expiration of the existing one percent sales and use tax previously imposed for the raising of not more
than $43,000,000.00 ofnet proceeds by said tax, 64.57% or $27,765,100.00 ofwhich shall go
to the Jackson County School District, 16.51% or $7,099,300.00 of which shall go to the Commerce City School District and 18.92% or $8,135,600.00 of which shall go to the Jefferson City School District, for the following projects:

For the Jefferson Citv School District

(i) Paying a portion of the debt service on the outstanding Series 1996 General Obligation Bonds previously issued by the City of Jefferson and the Series 2000 General Obligation Bonds previously issued by the City of Jefferson (the "Outstanding Jefferson Debt"), the maximum amount ofdebt service to be paid with sales tax proceeds will be $1,750,000.00 and (ii) (A) acquiring, constructing and equipping new school buildings and other buildings or facilities useful or desirable in connection therewith, (B) acquiring new school equipment, (C) adding to, renovating, repairing, improving and equipping existing school buildings or other buildings or facilities useful or desirable in connection therewith, and (0) acquiring any property necessary or desirable therefore, both real and personal (the "Jefferson School Projects"), the maximum amount of the Jefferson School Projects to be paid with sales tax proceeds will be $8,135,600.00 less the amount of Jefferson School System's share of such proceeds used to pay the Outstanding Jefferson Debt."

Note 10: RELATEDPARTYTRANSACTIONS

On April 27, 1999, a contract between the City ofJefferson Board of Education and Carroll Daniel

Construction Company was,executed in the amount of$600,053.00. During the prior year, change

orders increased the contract amount to $1,249,210.00. Current fiscal year expenditures on this

project amounted to $473,032.00. 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 and Jefferson Elementary

School addition projects.

'

.

Ronald Hopkins, a member ofthe City ofJefferson Board ofEducation, is a practicing attorney and

currently serves as legal counsel for the City of Jefferson. The City Government is the primary

govern. ment

of which

the

Board

,
'

o

f.Educatio

n

is

a

component

unit.

- 18 -

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY
NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30.20oi

EXHffiIT"D"

Note 11: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school districts are covered by the Teachers Retirement System ofGeorgia (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 School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.29% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2001 2000 1999

100% 100% 100%

$ 623,635.46 $ 556,444.60 $ 506,029.60

- 19-

CITY OF JEFFERSON BOARDi:OFEO'uCATION - JACKSON COUNTY C()MBINING:'BALAN~E'SH'EEf SPECIAL'REVENUE FUND
JUNE 30, 2001

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

SCHOOL FOOD;
SERVICES FUND

LOTTERY .PROGRAMS

$

151,322.47 $

15,354,23

851.00

6,367,81 1,583.98
"'

$

159,274,26 . $======16=,=20=5=,2=3=

LIABILITIES AND FUND EqUITY

LIABILITIES

Cash Overdraft

Accounts Payable

Salaries Payable

)

Expired Grant Balances Payable

Deferred Revenue

Total Liabilities

FUND EqUITY

Fund Balances Reserved For Continuation of Federal Programs For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated

Total Fund Equity

Total Liabilities and Fund Equity
See notes to the general-purpose financial statements. - 20-

$

4,051,85 $

28,574.44

1,631,23 6,574.00

8,000,00

$

32,626.29 $

16,205.23

$

6,367.81

. 1,583.98

118,696.18 $

0.00

$

126,647,97 $

0.00

=========== $

159,274.26 $

16,205.23

EXHIBIT"E"

FEDERAL PROGRAMS

TOTALS

JUNE 30, 2001

JUNE 30, 2000

$

166,676.70 $

163,141.22

$

183,311.51

184,162.51

170,695.18

6,367.81 1,583.98

6,732.45 1,305.92

$

183,311.51 $

358,791.00 $ ====3=4=1,~87=4=.7=7=

$

163,304.26 $

163,304.26 $

126,935.50

2,435.44

8,118.52

10,723.46

10,447.62

45,5.96.06

50,330.96

7,124.19

7,124.19

2,552.80 .

8,000.00

$

183,311.51 $

232,143.03 $

190,542.72

$

10,513.78

$

6,367.81

1,583.98

6,732.45 1,305.92

$

0.00

118,696.18

132,779.90

$

0.00 $

126,647.97 $

151,332.05

$ 183,311.51 $ 358,791.00 $ ======3=4=1=,=8=7=4=.7=7==

- 21 -

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2001

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration School Administration Student Transportation Services Central Support Services Other 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
FUND BALANCE JUNE 30
See notes to the general-purpose financial statements.
-22 -

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

34,818.00 $

204,666.49

195,758.96

. $ , 435,243.45 $

90,386.70 90,386.70

$

88,184.34

$

449,327.17

$

449,327.17 $

$

~14,083.72 . $

1,827.65 376.44
90,388.43 -1.73

1.73

$

-14,083.72 $

0.00

140,818.27

0.00

-364.64 278.06

$ 126,647.97 $=======0.=00=

EXHIBIT"F"

FEDERAL
PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2001

JUNE 30. 2000

$

125.204.70 $

153.935.32

$

553.157.75

757,824.24

684.680.77

195,758.96

186,168.95

$

553,157.75 $ 1,078.787.90 $ 1.024.785.04

$

347.703.76 $

435,888.10 $

438.546.39

26,115.85

26.115.85

21.236.52

110.182.66

110,182.66

68.143.06

9.422.29

11.249.94

8,009.98

I

1,733.23

1.733.23 376.44

1.078.00 191.25

I

12,356.35 54,021.59

12.356.35 54.021.59

1.719.82 46.000.00

I

2,200.00

449,327.17 2.200.00

412,442.81 5,000.00

I

$

563,735.73 $ 1.103,451.33 $ 1,002,367.83

$

-10.577.98 $

-24.663.43 $

22.417.21

64.20

65.93

1.487.30

$

-10.513.78 $

-24.597.50 $

23,904.51

10.513.78

151.332.05

129.782.78

-364.64 278.06

-724.10 -1,631.14

$

0.00 $

126,647.97 $====15=1=,3~32~.0=5=

- 23-

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 2001

EXHIBIT"G"

ASSETS Cash and Cash Equivalents Investments Accounts Receivable

BOND PROCEEDS

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS JUNE 30, 2001 JUNE 30, 2000

$

18,745.22 $

497,802.04 $ 516,547.26 $ 164,301.70

4,027,368.79

4,027,368.79

8,325,000.00

239,075.14

239,075.14

265,301.14

Total Assets

$ 4,046,114.01 $

736,877.18 $ 4,782,991.19 $ 8,754,602.84

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Contracts Payable Retainages Payable
Total Uablllties
FUND EQUITY
Fund Balances Reserved For Purposes of Bond Issue For SPLOST Projects Unreserved Undesignated
Total Fund Equity

$ 670,512.18 342,249.39
$ 1,012,761.57

$
$ 670,512.18 342,249.39
$ 1,012,761.57 $

44,546.99 45,426.87 251,358.50 12,598.08
353,930.44

$ 3,033,352.44 $'
0.00
$ 3,033,352.44 $

$ 3,033,352.44 $ 8,122,364.36

736,877.18

736,877.18

278,308.04

0.00

0,00

0.00

736,877.18 $ 3,770,229.62 $ 8,400,672,40

Total Uabilities and Fund Equity

$ 4,046,114.01 $

736,877.18 $ 4,782,991,19 $ 8,754,602.84

see notes to the general-purpose financial statements,

-24 -

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, 2001

EXHIBIT"H"

FUND BALANCE JUNE 30

$ 3,033,352,44 $

736,8n.18 $ 3,770,229.62 $ 8,400,672.40

See notes to the general-purpose financial statements,

- 25-

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2001

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Agriculture. U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program National School Lunch Program
Total Child Nutrition Cluster
Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1)
Total U: S. Department of Agriculture
Education. U.' S. Department of Special Education Cluster Pass-Through From Georgia Department of Education
Individuals with Disabilities Education Act
Part B - Special Education Flow Through Preschool Capacity Building Improvement Grant
Total Special Education Cluster
Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education Act TiUe I Grants to Local Educational Agencies Title II EisenhO\YElr Professional Development Title III Technology Literacy Challenge Fund Grants Title VI Innovative Education Program Strategies Class Size Reduction Goals 2000 State and Local Education Systemic Improvement Grants Safe and Drug-Free Schools and Communities Vocational Education - Basic Grants to States High School Program Basic Grant
Total U. S. Department of Education

CFDA NUMBER

PASSTHROUGH
ENTITY 10
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

." 10.553 10.555

NJA

$ 34.537.47

NJA

144.765.87 $

$ 179,303.34 $

(2) 423.964.02 (3)
423.964.02

10.550

NJA

25,363.15

$ 204,666.49 $

25.363.15 449,327.17

84.027 84.173 84.173

NJA

$ 130,050.00 $

NJA

6,450.00

NJA

3,891.00

$ 140,391.00 $

130,050.00 6,450.00 3,891.00
140.391.00

84.010 84.281 84.318 84.298 84.340
84.276 84.186
84.048

NJA

91,410.00

NJA

14,206.97

NJA

134.537.96

NJA

7,991.00

NJA

17.754.00

91,448.39 (3) 14.206.97 134,690.34
7.991.00 17.778.94 (3)

NJA

131.087.19

NJA

4,617.63

141,449.46 (3) 4.617.63

NJA

11,162.00

$ 553.157.75 $

11,162.00 563.735.73

Total Federal Financial Assistance
= NJA Not Available

$ 757,824.24 $

1,013.062.90

~ 26-

. .' .;;.'

; .. ,

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEARENDED JUNE30. 2001

SCHEDULE -1-

Notesto the Schedule of Expenditures of FederalAwards
(1) The amountsshownfor the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donatedcommodities received and/orconsumed by the systemduringthe currentfiscal year.
(2) Expenditures for the SchoolBreakfastProgram werenot maintained separately and are included In the 2001 National SchoolLunchProgram.
(3) Expenditures for this program includeState.and/orOther Funds. Expenditures are not maintained by fund source.
Major Programs are Identified by an asterisk (*) in front of the CFDAnumber.
The School Districtdid not provideFederal Assistance to any Subreclpient.
The accompanying schedule of expenditures of Federal awards includes the Federal grant activityof the City of JeffersonBoardof Education and Is presented on the modified accrualbasis of accounting whichis the basis of accounting used In the presentation of the general-purpose financial statements.

see notes to the general-purpose financialstatements.

- 27-


CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30. 2001

SCHEDULE "2"

AGENCYIFUNDING
GRANTS Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Category II Category III Category IV Category V Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOl) Media Center Program Staff and Professional Development Indirect Cost Categorical Grants Pupil Transportation Regular Bus Replacement Nursing Services Principal Supplements Vocational Supervisors Education Equalization Funding Grant Food Services Vocational Education Other State Programs At-Risk Summer School Program Health Insurance Mentor Teachers Preschool Handicapped Program Remedial Summer School Teachers' Retirement lottery Programs Computers in the Classroom
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement
CONTRACTS Education, Georgia Department of Georgia's Reading Challenge Reading First Program

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

. REVENUE

FUND

FUND

$

236,999.00

257,714.00

789,914.00

305,626.00

427,805.00

577,408.00

543,863.00

185,913.00

82,027.00 179,115.00 467,778.00
56,757.00 25,947.00 200,526.00 34,933.00 46,929.00 23,908.00 130,554.00 39,859.00 965,533.00

58,532.00 17,068.00 46,906.00
6,526.00 6,850.00 369,205.00
$ 15,375.31
1,269.06 74,743.26
2,663.91 19,632.00
1,826.63 5,899.34

12,870.00

$
34,818.00 29,084.00 61,302.70

33,305.00 21,775.00

TOTAL
236,999.00 257,714.00 789,914.00 305,626.00 427,805.00 577,408.00 543,863.00 185,913.00
82,027.00 179,115.00 467,778.00
56,757.00 25,947.00 200,526.00 34,933.00 46,929.00 23,908.00 130,554.00 39,859.00 965,533.00
58,532.00 17,068.00 46,906.00
6,526.00 6,850.00 369,205.00 34,818.00 15,375.31
1,269.06 74,743.26
2,663.91 19,632.00
1,826.63 5,899.34
29,084.00
61,302.70
12,870.00
33,305.00 21,775.00

See notes to the general-purpose financial statements.

$ 6,273,554.51 $

125,204.70 $ 6,398,759.21

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CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2001

SCHEDULE 3

PROJECT

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS (3)

PROJECT STATUS

Payment of principal and interest due on Series 1973 and 1996 Bonds

$ 978,678.00 $ 978,678.00 $ 150,236.00 $ 350,000.00 Ongoing

Construction of additional classrooms, remodeling and renovating existing classrooms, instructional and support space, recreational fields and grounds and to provide fumlshings, equipment and fixtures for such areas at Jefferson High School, Jefferson Middle School, and Jefferson Elementary Sc!lool

3;276,322.00 3,598,618.95

422,412.29 2,338,671.99 Ongoing

$ 4,255,000.00 $ 4,5n,296.95 $ 572,648.29 $ 2,688,671.99

(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax.
(2) The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion.
(3) The voters of Jackson County approved the imposition of a 1% sales tax to fund the above projects. Amounts expended for these projects may include sales tax proceeds, state. local property taxes and/or other funds over the life of the projects.

See notes to the general-purpose financial statements.

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CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY GENERAL FUND aUALITY BASIC EDUCATION PROGRAM caBEI
ALLOTMENTS AND EXPENDITURES - BY PROGRAM . YEAR ENDED JUNE 30, 2001

SCHEDULE "4"

DESCRIPTION

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE aBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

Direct Instructional Programs

Kindergarten Program

$

Kindergarten Program-Early Intervention Program

Primary Grades (1-3) Program

Primary Grades-Early Intervention (1-3) Program

Upper Elementary Grades (4-5) Program

\

Middle School (6-8) Program

High School General Education (9-12) Program

Vocational Laboratory (9-12) Program

Students with Disabilities

Category I.

Category II

Category III

Gifted Student - Category VI

Remedial Education Program

Alternative Education Program

English Speakers of Other Languages (ESOL)

262,959,00 $ 285,943,00 876,439,00 339,104,00 474,666,00 640,656,00 603,437,00 206,278,00 900,528,00

445,362,61 $ 141,862.87 971,623.04 249,397,01 475,442,76 878,799,10 823,089,82 186,996.44

222,490,00 38,760.00 52,070,00 26,527,00

250,594,95 631,064.75 153,237,90
55,068.08 46,669,36 22,778.77

9,101,19 $ 2,877,25 22,077.45 4,605,45 10,399,09 16,272,68' 26,097,03 11,945,22
4,579.31 3,225,10 7,620,64 1,703,53
839,40 500,00
54,19

454,463.80 144,740,12 993,70Q.49 254,002,46 485,841.85 895,071,78 849,186,85 198,941,66
4,579,31 253,820,05 638,685,39 154,941,43
55,907,48 47,169,36 22,832,96

TOTAL DIRECT INSTRUCTIONAL PROGRAMS

$

4,929,857,00 $ 5,331,987.46 $ 121,897,53 $ 5,453,884,99

Media Center Program Staff and Professional Development

144,854.00 44,226.00

129,087,53 12,471,79

29,369.90 32,590,07

158,457,43 45,061,86

TOTAL aBE FORMULA FUNDS

.

$

5,118,937,00 $ 5,473,546,78 $ 183,857,50 $ 5,657,404,28

(1) Comprised of State Funds plus Local Five Mill Share,

See notes to the general-purpose financial statements,

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/....
CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE) ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2001

SCHEDULE "5"

Jefferson Middle School Jefferson High School Jefferson Elementary School Central Office (Alternative Education Program)
TOTAL
(1) Comprised of State Funds plus Local Five Mill Share.

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

987,361.00 $

1,184,429.85

1,196,666.00

1,426,264.90

2,693,760.00

2,843,190.24

52,070.00

$

4,929,857.00 $

5,453,884.99

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

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

RUSSELL W. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street. S.w.. Suite 214 Atlanta. Georgia 30334-8400
May 17,2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of 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 ofJefferson Board of Education as of and for the year ended June 30, 2001, and have issued our report thereon dated May 17,2002. 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 auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
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 oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination offinancial statement amounts. However, providing an opinion on compliance with those provisions was not an objective ofour audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered City ofJefferson Board ofEducation'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
2001YB-40

control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its 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 ofthe internal control over financial reporting that, in our judgment, could adversely affect . City ofJefferson Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. Reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs as items FS-7791-01-01, FS- 7791-01-02 and FS-7791-01-03.
A material weaknessis a condition in which the design or operation of one or more ofthe 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 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, we consider all items described above to be material weaknesses,
This report is intended solely for the information and use ofthe management, members ofthe City of Jefferson Board of Education, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,

RWH:as 2001YB-40

Rus 11 W. Hinton State Auditor

RUSSEI.L W. HINTON
STATEAUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w.. Suite 214 Atlanta, Georgia 30334-8400
May 17, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members of the City ofJefferson Board ofEducation
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON 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, 2001. City ofJefferson Board ofEducation's major Federal programs are identified in the Summary of Auditor's Results Section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of City ofJefferson Board of Education's management. Our responsibility is to express an opinion on City ofJefferson Board of Education's compliance based on our audit.
We conducted our audit ofcompliance in accordance with auditing standards generally accepted in the United States ofAmerica; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and OMB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance 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.
200ISA-IO

In our opinion, the City ofJefferson Board ofEducation complied, in all material respects, with the requirements referred to above that are applicable to each ofits major Federal programs for the year ended June 30, 2001.
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 of Jefferson 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 arid report on internal control over compliance in accordance with OMB Circular A-I33.
Our consideration ofthe 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 of risk 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 ofperforming 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 ofthe management, members ofthe City of" Jefferson Board of Education, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
~l.h~
Ru ell W. Hinton State Auditor
RWH:as 200ISA-1O

SECTIONID AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

" 't
CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-7791-99-04 FS-7791-00-01 FS- 7791-00-02

Further Action Not Warranted Further Action Not Warranted Unresolved - See Corrective ActionlResponses .

CORRECTIVE ACTIONIRESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7791-00-02

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

SECTION IV FINDINGS AND QUESTIONED COSTS

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001

I SUMMARY OF AUDITOR'S RESULTS

1. Type of Report 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. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the City ofJefferson Board ofEducation disclosed financial statement reportable conditions related to the following control categories.

Cash and Cash Equivalents Revenues/Receivables/Receipts General Fixed Assets

Expenditures/LiabilitieslDisbursements Employee Compensation

All of the reportable conditions described above are considered to be material weaknesses.

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 ofJefferson Board ofEducation 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 majorprograms was unqualified.

6. Audit Findings Required to be Reported by Section .510(a) ofOMB Circular A-133 The City ofJefferson Board ofEducation'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 of Education qualified as a low risk auditee based on a waiver granted by the U. S. Department of Education.

- 1-

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 2001

IT FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

CASH AND CASH EQUNALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURESILIABILITIESIDISBURSEMENTS . EMPLOYEE COMPENSATION Inadequate Separation of Duties Reportable Condition - Material Weakness Finding Control Number: FS-7791-01-01
An examination of the internal accounting control procedures revealed that the School District did
not maintain adequate separation ofemployee duties in the performance ofthe following accounting functions and related procedures:

Cash and Cash Equivalents The bank reconciliation function was not separated from the record keeping and voucher payment authorization functions. No compensating controls such as supervisory review of monthly reconciliations were performed.

Revenues/Receivables/Receipts Deposit preparation was not separated from the record keeping and cash custody functions. No compensating controls such as a review and/or recalculation ofdeposit ticket or comparison to manual receipt books were performed by someone other than deposit preparer,

ExpenditureslLiabilitieslDisbursements

The check writing function' was. not separated from .record keeping, voucher payment

'authorization, signature plate custody or processing of signed checks. No compensating

controls such as supervisory approval of vendor checks prior to check processing were

performed.

..

Employee Compensation All functions related to payroll which include, custody of personnel files, record keeping, payroll authorization, check writing and report reconciliation, were performed by one individual. No compensating controls such as cross-training of personnel or supervisory review and reconciliation of payroll reports prior to check processing were performed.
Separation ofduties involving key accounting functions is the basis for achieving an adequate system ofinternal control. These deficiencies were a result ofmanagement's decision to limit the number of administrative staff made responsible for accounting functions. Management should implement procedures to ensure that the key accounting functions ofcustody, record keeping and authorization be segregated. Additionally, management should periodically review job duties to determine if employee's duties can be reassigned to achieve a higher degree ofintern~lcontrol with existing staff

- 2-

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30. 2001
II FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS
EMPLOYEE COMPENSATION Inadequate Payroll Records Reportable Condition - Material Weakness Finding Control Number: FS-7791-01-02
A review of the City of Jefferson Board of Education's payroll records identified that salary documentation for certain key accounting personnel was not maintained on file to support amounts paid. This deficiency occurred because management failed to implement procedures to ensure that all amounts paid to system employees are adequately documented through salary schedules, salary worksheets or some other written form of agreement as to amounts to be paid.
Management should implement procedures to ensure that a salary schedule or some other form of written documentation is maintained on file that both authorizes and supports amounts paid to all system employees.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-7791-01-03
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 ofthe School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District 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 School District and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained ofall additions and deletions to the General Fixed Assets Account Group.
III FEDERAL AWARD FINDINGS AND OUESTIONED COSTS
No matters were reported.
-3-