CITY OF JEFFERSON
BOARD OF EDUCATION
JACKSON COUNTY, GEORGIA
ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED
JUNE 30,2010
(Including Independent Auditor's Reports)

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

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

EXHIBITS

BASIC FINANCIAL STATEMENTS

DISTRICT-WIDE FINANCIAL STATEMENTS

A

STATEMENT OF NET ASSETS

B

STATEMENT OF ACTIVITIES

FUND FINANCIAL STATEMENTS

C

BALANCE SHEET

GOVERNMENTAL FUNDS

D

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET ASSETS

E

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES

GOVERNMENTAL FUNDS

F

RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT

OF REVENUES, EXPENDITURES AND CHANGES IN FUND

BALANCES TO THE STATEMENT OF ACTIVITIES

G

STATEMENT OF FIDUCIARY NET ASSETS

FIDUCIARY FUNDS

H

NOTES TO THE BASIC FINANCIAL STATEMENTS

SCHEDULES

REQUIRED SUPPLEMENTARY INFORMATION

1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND

SUPPLEMENTARY INFORMATION

2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 3 SCHEDULE OF STATE REVENUE

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

SECTION I
FINANCIAL
SCHEDULES
SUPPLEMENTARY INFORMATION
4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 5 ALLOTMENTS AND EXPENDITURES
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) BY PROGRAM

Page

SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MAlTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WlTH GOVERNMENT AUDITING STANDARDS
lNDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WlTH REQUIREMENTSTHAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WlTH O M 6 CIRCULAR A-133

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

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

CITY OF JEFFERSON BOARD OF EDUCATION -JACKSON COUNTY - TABLE OF CONTENTS -
SECTION V MANAGEMENT'S RESPONSES SCHEDULE OF MANAGEMENT'S RESPONSES

SECTION I FINANCIAL

Russell W. Hinton
STATE AUDITOR
(404)656-2174

DEPARTMENOTF AUDITSAND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
August 11,2011

Honorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Jefferson Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information (Exhibits A through H) of the City of Jefferson Board of Education, as of and for the year ended June 30, 2010, which collectively comprise the Board's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City of Jefferson Board of Education's management. Our responsibility is to express opinions on these financial statements based on our audit.
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 GovernmentAuditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and the 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 opinions.
In our opinion, the financial statements referred to previously present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Jefferson Board of Education, as of June 30, 2010, and the respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.
The City of Jefferson Board of Education has not presented Management's Discussion and Analysis that accounting principles generally accepted in the United States of America has determined is necessary to supplement, although not to be part of, the basic financial statements.

In accordance with Government Auditing Standards, we have also issued our report dated August 11, 2011, on our consideration of the City of Jefferson Board of Education's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standardsand should be considered in assessingthe results of our audit.
Accounting principles generally accepted in the United States of America require that the Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on page 27, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures, to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during the audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Jefferson Board of Education's financial statements as a whole. The accompanying supplementary information consists of Schedules 2 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 Governmen&, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the financial statements. Such information is the responsibility of management and was derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used t o prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole.
A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated section 50-6-24.
RespectfuIly submitted,
~ u l s e lWl . Hinton, CPA, CGFM State Auditor

CITY OF JEFFERSON BOARD OF EDUCATION -JACKSON COUNTY

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY STATEMENT OF NET ASSETS JUNE 30,2010
ASSETS
Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Local Other Inventories capitalized Bond and Other Debt Issuance Costs Capital Assets. Non-Depreciable Capital Assets. Depreciable (Net of Accumulated Depreciation)
Total Assets
LIABILITIES
Accounts Payable Salaries and Benefits Payable Payroll Withholdings Payable Long-Term Liabilities
Due Within One Year Due in More Than One Year
Total Liabilities
NET ASSETS
Invested in Cap~taAl ssets, Net of Related Debt Restricted for
Bus Replacement Continuation of Federal Programs Debt Servlce Capital Projects Unrestr~cted
Total Net Assets
Total Liabilities and Net Assets

EXHIBIT "A"
GOVERNMENTAL ACTlVlTl ES

The notes to the basic financial statements are an integral part of this statement. -1-

CITY OF JEFFERSON BOARD OF EDUCATION JACKSON COUNTY STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30,2010

GOVERNMENTAL ACTIVITIES
Instruction Support Servlces
Pup11Services Improvement of Instructional Services Educational Media Services General Admlnlstratlon School Admlnlstratlon Business Admlnlstratlon Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Servlces Operations of Non-Instructional Servlces Enterprise Operatlons Community Servlces Food Servlces Interest on Short-Term and Long-Term Debt
Total Governmental Actlv~ties
General Revenues Taxes Propem Taxes For Maintenance and Operatlons For Debt Servlces Sales Taxes Special Purpose Local Optlon Sales Tax For Debt Services For Capital Projects Other Sales Tax Grants and Contributions not Restricted to Speclflc Programs Investment Earnlngs Miscellaneous
Total General Revenues
Change In Net Assets
Net Assets - Beg~nnlngof Year (Restated)
Net Assets - End of Year

EXPENSES

PROGRAM REVENUES

OPERATING

CHARGES FOR

GRANTS AND

SERVICES

CONTRIBUTIONS

NET (EXPENSES) REVENUES
AND CHANGES IN NET ASSETS

The notes to the bas~cfinancial statements are an ~ntegrapl art of this statement. 2

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30.2010

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTAL

Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Local Other Inventories
Total Assets

LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts Payable Salaries and Benefits Payable Payroll Withholdings Payable Deposits and Deferred Revenue
Total Liabilities
FUND BALANCES
Resewed for: Bus Replacement Cantinuat~onof Federal Programs Debt Sewice Capital Projects
Unresewed Designated for Student Actlvit~es Undes~gnatedReported in: General Fund
Total Fund Balances
Total Liabilities and Fund Balances

The notes to the basic financial statements are an integral part of this statement. -3-

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS JUNE 30.2010
Total Fund Balances - Governmental Funds (Exhibit "C")
Amounts reported for Governmental Actlvltles in the Statement of Net Assets are different because:
Cap~taAl ssets used ~nGovernmental Activities are not financial resources and therefore are not reoorted in the funds. These assets consist of:
Land Land Improvements Buildings Equipment Accumulated Depreciation
Total Capital Assets
Taxes that are not available to pay for current period expenditures are deferred in the funds.
Long-Term Liabilities, including Bonds Payable, are not due and payable in the
current period and therefore are not reported as l~abilitiesin the funds.
Long-Term Liabilities at yearend consist of:
Bonds Payable Deferred Ga~non Bond Refunding Installment Sales Agreement Deferred Charge for Bond Issuance Costs Unamortized Bond Premiums
Total Long-Term Liabilities
Net Assets of Governmental Act~vities(Exhib~"tA")

EXHIBIT "D"

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

CITY OF JEFFERSON BOARD OF EDUCATION -JACKSON COUNTY STATEMENT OF REVENUES. EXPENDITURESAND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS YEAR ENDEDJUNE 30,2010

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of instructional Services Educational Medla Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Enterprise Operations Community Services Food Services Operation
Capital Outlay Debt Services
Pr~ncipal Dues and Fees Interest
Total Expenditures
Net Change in Fund Balances
Fund Balances - Beginning
Fund Balances - Ending

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTAL

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

CITY OF JEFFERSON BOARD OF EDUCATION -JACKSON COUNTY RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES, EXPENDITURESAND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30,2010
Total Net Change in Fund Balances - Governmental Funds (Exhibit "En) Amounts reported for GovernmentalActivities in the Statement of Activities are different because:
Capital Outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activities, the cost of CapitalAssets is allocated over their estimated useful lives as depreciation expense. In the current period. these amounts are: Capital Outlay Depreciation Expense Excess of Cap~taOl utlay over Deprec~at~oEnxpense
Taxes reported in the Statement of Activities that do not prov~decurrent financial resourcesare not reported as revenues in the funds.
Bond issuance costs. deferred gains on refundings and similar Items when debt is first issued are reported as an expenditure In Governmental Funds, but are reported as deferred charges on the Statement of Net Assets and amortized over the term of the debt, uslng the stra~ght-l~nmeethod. The details of t h ~ sdifference in the current per~odare as follows: Deferral of Bond Issuance Costs Deferral of Gain on Refundingof Bonds Total Bond lssuance Costs
Repayment of Long-Term Debt is reported as an expenditure in Governmental Funds, but the repayment reduces Long-Term Liabilities in the Statement of Net Assets. In the current year, these amounts consist of: Bond Principal Retirements Amortization on Bond Premium Capital Lease Payments Installment Sales Agreement Total Long-Term Debt Repayments
Change in Net Assets of Governmental Activities (Exh~b"~Bt )
The notes to the basic financial statements are an integral part of this statement. -6-

CITY OF JEFFERSON BOARD OF EDUCATION -JACKSON COUNTY STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30.2010
ASSETS Cash and Cash Equivalents
LIABILITIES Funds Held for Others

EXHIBIT "G"
AGENCY FUNDS

The notes to the basic financial statements are an integral part of this statement.
- 7-

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CITY OF JEFFERSON BOARD OF EDUCATION -JACKSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

Note 1: DESCRIPTION OF SCHOOL DISTRICTAND REPORTING ENTITY
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 Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. The Board shall annually certify to the mayor and council the rate of the tax levy necessary for the support, maintenance and operations of the schools. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity.
Note 2: SUMMARY OF SIGNIFICANTACCOUNTING POLICIES
BASIS OF PRESENTATION
The School District's basic financial statements are collectively comprised of the District-wide financial statements, fund financial statements and notes to the basic financial statements of the City of Jefferson Board of Education.
District- wide Statemen&: The Statement of Net Assets and the Statement of Activities display information about the financial activities of the overall School District, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchangetransactions.
The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities.
Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the School District related to the administration and support of the School District's programs, such as office and maintenance personnel and accounting) are not allocated to programs.
a Program revenues include (a) charges paid by the recipients of goods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
Fund Financial Statements= The fund financial statements provide information about the School District's funds, including fiduciary funds. Eliminations have been made to minimize the double counting of internal activities. Separate statements for each category (governmental and fiduciary) are presented. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column.
The School District reports the following major governmental funds:
General Fund is the School District's primary operating fund. It accounts for all financial resources of the School District, except those resources required to be accounted for in another fund.

CITY OF JEFFERSON BOARD OF EDUCATION -JACKSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

District-wide Capital Projects Fund accounts for financial resources including Special Purpose Local Option Sales Tax (SPLOST) to be used for the acquisition, construction or renovation of major capital facilities.
Debt Service Fund accounts for taxes (property and sales) legally restricted for the payment of general long-term principal, interest and paying agent's fees.
The School District reports the following fiduciary fund type:
Agency funds account for assets held by the School District as an agent for various funds, governments or individuals.
BASIS OF ACCOUNTING
The basis of accounting determines when transactions are reported on the financial statements. The District-wide governmental and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, sales taxes, grants and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year in which the underlying transaction (sale) takes place. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
The School District uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancingset of accounts.
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The School District considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities and acquisitions under capital leases are reported as other financing sources.
The School District funds certain programs by a combination of specific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the School District's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues.
The State of Georgia reimburses the School District for teachers' salaries and operating costs through the Quality Basic Education Formula Earnings program (QBE). Generally teachers are contracted for the school year (July 1- June 30) and paid over a twelve month contract period,

CITY OF JEFFERSON BOARD OF EDUCATION -JACKSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

generally September 1through August 31. In accordance with the respective rules and regulations of the QBE program, the State of Georgia reimburses the School District over the same twelve month period in which teachers are paid. At June 30, the amount of teachers' salaries incurred but not paid until July and August of the subsequent year are accrued. Since the State of Georgia recognizes its QBE liability for the July and August salaries at June 30, the School District recognizes the same QBE as a receivable and revenue, consistent with symmetrical recognition.
NEW ACCOUNTING PRONOUNCEMENTS
In fiscal year 2010, the School District adopted the Governmental Accounting and Standards Board (GASB) Statement No. 51, Accounting and Reporting for Intangible Assets. The provisions of this Statement generally require retroactive reportingfor intangible assets acquired after June 30, 1980, with the exception of those intangible assets that have indefinite useful lives and those that are considered internally generated.
In addition, the School District adopted GASB Statement No. 53, Accounting and Financial Reporting for Derivative Instruments. The provisions of this Statement impacts disclosure regarding derivative instruments entered into by the state and local governments. Derivative disclosures, if any, will be identified in Note 3.
RESTATEMENT OF PRIOR YEAR NET ASSETS
For fiscal year 2010, the School District restated various Capital Assets due to errors and omissions. The School District increased, net of accumulated depreciation, buildings and improvements and equipment, $46,093.00 and $21,212.00, respectively. The result is an increase in Net Assets at July 1,2009, of $67,305.00. This change is in accordance with generally accepted accounting principles.
CASH AND CASH EQUIVALENTS
Composition of Deposits Cash and cash equivalents consist of cash 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. Official Code of Georgia Annotated Section 45-8-14 authorizes the School District to deposit its funds in one or more solvent banks, insured Federal savings and loan associations or insured chartered building and loan associations.
INVESTMENTS
Composition of lnvestments lnvestments made by the School District in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interestearning contracts and money market investments with a maturity at purchase of one 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 School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:

CITY OF JEFFERSON BOARD OF EDUCATION -JACKSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30.2010

EXHIBIT "H"

(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 Georgia Fund 1administered by the State of Georgia, Office of Treasury and Fiscal Services,
(7) Repurchaseagreements, and

(8) Obligations of other political subdivisions of the State of Georgia.
The School District does not have a formal policy regarding investment policies that address credit risks, custodial credit risks, concentration of credit risks, interest rate risks or foreign currency risks.
RECEIVABLES

Receivables consist of amounts due from property and sales taxes, 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 basic financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
PROPERTY TAXES
The City of Jefferson Board of Education certified to the mayor and city council the property tax levy for the 2009 tax digest year (calendar year) on October 15, 2009 (levy date). Taxes were due on December 20, 2009 (lien date). Taxes collected within the current fiscal year or within 6 0 days after year-end on the 2009 tax digest are reported as revenue in the governmental funds for fiscal year 2010. The Jackson County Tax Commissioner bills and collects the property taxes for the School District and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2010, for maintenance and operations amounted to $6,037,360.87 and for school bonds amounted to $1,562,834.82.
Tax millage rates levied for the 2009 tax year (calendar year) for the City of Jefferson Board of Education were as follows (a mill equals $1per thousand dollars of assessed value):

School Operations School Bonds

13.283 mills 3.345 mills

16.628 mills

CITY OF JEFFERSON BOARD OF EDUCATION -JACKSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

SALESTAXES

Special Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $1,877,689.83 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years.

INVENTORIES

Food Inventories On the basic financial statements, inventories of donated food commodities used in the preparation of meals are reported at their Federallyassigned value and purchased foods inventories are reported at cost (first-in, first-out). The School District uses the consumption method to account for inventories whereby donated food commodities are recorded as an asset and as revenue when received, and expenses/expenditures are recorded as the inventory items are used. Purchased foods are recorded as an asset when purchased and expenses/expenditures are recorded as the inventory items are used.

CAPITAL ASSETS

Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund financial statements at the time of purchase (including ancillary charges). On the District-wide financial statements, all purchased capital assets are valued at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at estimated fair market value on the date donated. Disposals are deleted at depreciated recorded cost. The cost of normal maintenance and repairs that do not add to the value of assets or materially extend the useful lives of the assets is not capitalized. Depreciation is computed using the straight-line method. The School District does not capitalize book collections or works of art. During the fiscal year under review, no events or changes in circumstances affecting a capital asset that may indicate impairment were known to the School District.

Capitalization thresholds and estimated useful lives of capital assets reported in the District-wide statements are as follows:

Capitalization

Estimated

Policy

Useful Life

Land Land Improvements Buildings and lmprovements Equipment

All

$

5,000.00

$

5,000.00

$

5,000.00

N/A 20 to 80 years 10to 80 years
5 to 30 years

Depreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives.

CITY OF JEFFERSON BOARD OF EDUCATION -JACKSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30.2010

EXHIBIT "H"

GENERAL OBLIGATION BONDS
The School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. In the District-widefinancial statements, bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line method. Bond issuance costs are reported as deferred charges and amortized over the term of the debt.
In the fund financial statements, the School District recognizes bond premiums and discounts, as well as bond issuance costs during the fiscal year bonds are issued. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. In addition, general obligation bonds have been issued to refund existing general obligation bonds. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the Statement of Net Assets.
N ET ASSETS
The School District's net assets in the District-wideStatements are classified as follows:
Invested in capital assets, net of related debt - This represents the School District's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt.
Restricted net assets - These represent resources for which the School District is legally or contractually obligated to spend resources for bus replacement, continuation of Federal programs, debt service and capital projects in accordance with restrictions imposed by external third parties.
Unrestricted net assets - Unrestricted net assets represent resources derived from property taxes, sales taxes, grants and contributions not restricted to specific programs, charges for services, and miscellaneous revenues. These resources are used for transactions relating to the educational and general operations of the School District, and may be used at the discretion of the Board to meet current expenses for those purposes.
FUND BALANCES
Reserved Reserves represent those portions of fund balance equity that are legally segregated for a specific future use.
Unreserved - Designated
Designatedfund balances represent tentative plans for future use of financial resources.
USE OF ESTIMATES
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates.

CITY OF JEFFERSON BOARD OF EDUCATION -JACKSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

Note 3: DEPOSITS AND INVESTMENTS

COLLATERALIZATION OF DEPOSITS

Official Code of Georgia Annotated (O.C.G.A.) 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 of the public funds being secured after the deduction of the amount of deposit insurance. If a depository elects the pooled method (O.C.G.A. Section 45-8-13.1) the aggregate of the market value of the securities pledged to secure a pool of public funds shall be not less than 110 percent of the daily pool balance.

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

(1)Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,

(2) lnsurance on accounts provided by the Federal Deposit lnsurance Corporation,

(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,

(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,

(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,

(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and

(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by or securities guaranteed 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 MortgageAssociation, and the Federal National Mortgage Association.

CATEGORIZATION OF DEPOSITS

Custodial credit risk is the risk that in the event of a bank failure, the School District's deposits may not be returned to it. The School District does not have a deposit policy for custodial credit risk. At June 30, 2010, the bank balances were $6,067,139.28. The amounts exposed to custodial credit risk are classified into three categories as follows:

Category 1Category 2 -
Category 3 -

Uncollateralized, Cash collateralized with securities held by the pledgingfinancial institution, 0 r Cash collateralized with securities held by the pledging financial institution's trust department or agent but not in the School District's name.

CITY OF JEFFERSON BOARD OF EDUCATION -JACKSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

The School District's deposits by custodial credit risk category at June 30, 2010, are as follows:

Custodial Credit Risk Categow

Bank Balance

Total CATEGORIZATION OF INVESTMENTS

$ 5,280,618.84

The School District's investments as of June 30, 2010, are presented below. All investments are presented by investment type and debt securities are presented by maturity.

Investment T V D ~

Fair Value

Other lnvestments U. S. Treasury Money Market Funds

$ 49,030.98

lnvestment Pools Office of Treasury and Fiscal Services Georgia Fund 1

1,310.76

Total Investments

$ 50,341.74

The Georgia Fund 1,formerly referred to as LGIP, administered by the State of Georgia, Office of Treasury and Fiscal Services is not required to be categorized since the School District 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 Georgia Fund 1(Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. Additional information on the Georgia Fund 1is
disclosed in the State of GeorgiaComprehensive Annual Financial Report. This audit can be obtained
from the Georgia Department of Audits and Accounts at htt~://www.audits.qa.~ov/SGD/cafr.html.
The Primary Liquidity Portfolio consists of Georgia Fund 1which is not registered with the SEC as an investment company but does operate in a manner consistent with the SEC's Rule 2a-7 of the lnvestment Company Act of 1940. The investment is valued at the pool's share price, $1.00 per share. The pool is an AAAm rated investment pool by Standard and Poor's. The weighted average maturity of Georgia Fund 1may not exceed 6 0 days. The weighted average maturity for Georgia Fund 1on June 30,2010, was 46 days.
The U. S. Treasury Money Market Funds are in an Institutional Treasury Portfolio Fund managed by Fidelity Investments. The Institutional Treasury Portfolio Fund is rated AAAm by Standard and Poor's. The weighted average maturity of the fund is approximately 6 0 days.
Note 4: 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 2 Inventories

CITY OF JEFFERSON BOARD OF EDUCATION -JACKSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

Note 5: CAPITAL ASSETS The following is a summary of changes in the Capital Assets during the fiscal year:

GovernmentalActivities Capital Assets, Not Being Depreciated:
Land

Balances July 1, 2009
(Restated)

Increases

Decreases

Balances June 30,2010

Capital Assets, Being Depreciated: Buildings and Improvements Equipment Land lmprovements

Less: Accumulated Depreciation: Buildings and Improvements Equipment Land Improvements

Total Caprtal Assets, Being Depreciated, Net $ 36,207,695.13 $ -353.054.61 $

Governmental Activity Capital Assets - Net

$ 36,942,491.13 $ -353,054.61 $

0.00 $ 35,854,640.52 0.00 $ 36,589,436.52

Capital assets being acquired under capital leases and installment sales agreement as of June 30, 2010, are as follows:
Governmental Funds
Buildings and lmprovements Equipment Less: Accumulated Depreciation

CITY OF JEFFERSON BOARD OF EDUCATION -JACKSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010
Current year depreciation expense by function is as follows:
Instruction Support Services
Educational Media Services General Administration School Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Food Services

EXHIBIT "H"

Note 6: RISK MANAGEMENT

The School District 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; acts of God 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 of the 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 (including coverage for flood and earthquake), general liability (including coverage for sexual harassment, molestation and abuse), errors and omissions, crime 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 expenses/expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated.

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

follows:

Claims and

Beginningof Year

Changes in

Claims

End of Year

Liability

Estimates

Paid

Liability

CITY OF JEFFERSON BOARD OF EDUCATION -JACKSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

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 of workers' 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 Safety National Casualty Corporation to provide coverage for potential losses sustained by the Fund in excess of $500,000.00 loss per occurrence, up to the statutory limit. Employers' Liability insurance coverage is also provided by Safety National Casualty Corporation to provide coverage for potential losses sustained by the Fund in excess of $500,000.00 loss per occurrence, up to $2,000,000.00.

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

Position Covered

Amount

Superintendent All Employees Driver's Education

Note 7: SHORT-TERM DEBT
The School District obtains temporary loans in advance of property tax collections, depositing the proceeds in its General Fund. This short-term debt was to provide cash for operations until property tax collections were received by the School District. Article IX, Section V, Paragraph V of the Constitution of the State of Georgia limits the aggregate amount of short-term debt to 75 percent of the total gross income from taxes collected in the preceding year and requires all short-term debt to be repaid no later than December 3 1of the calendar year in which the debt was incurred.

Short-term debt activity for the fiscal year is as follows:

Beginning Balance

Issued

Redeemed

Ending Balance

Temporary Loans

$

0.00 $ 500,000.00 $ 500,000.00 $

0.00

Note 8: LONG-TERM DEBT

CAPITAL LEASES

The City of Jefferson Board of Education entered into various lease agreements for 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.

INSTALLMENT SALES AGREEMENT

The City of Jefferson Board of Education entered into an agreement dated June 1,2006, with the Northeast Georgia Regional Educational Service Agency for the construction and subsequent lease of the Rutland Center. Under the terms of the agreement, the School District will make annual payments through July 15,2020.

CITY OF JEFFERSON BOARD OF EDUCATION -JACKSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

GENERAL OBLIGATION DEBT OUTSTANDING

General Obligation Bonds currently outstanding are as follows:

Purpose

Interest Rates

General Government - Refunding- Series 2 0 0 4
General Government - Series 2005A
General Government - Refunding- Series 2005B

3.58% 3.00% - 5.00% 3.00%- 4.00%

Amount

The changes in Long-Term Debt during the fiscal year ended June 30,2010, were as follows:

Balance July 1,2009

Additions

Governmental Funds Deductions

Balance June 30,2010

Due Within One Year

G. 0.Bonds Less: Deferred Amounts
on Refunding

$ 22,590.000.00$ 823,104.89

0.00 $ 1,055,000.00$ 21,535,000.00$ 1,095,000.00 58,793.21 764,311.68 58.793.21

Total G. 0.Bonds

$ 21,766.895.11$

0.00 $ 996.206.79 $20,770,688.32$1,036,206.79

Installment Sales Agreement Capital Leases Bond PremiumsAmortized

181.559.33 12,571.41
587,163.86

13,066.69 12,571.41 37,678.95

168,492.64 0.00
549,484.91

13,626.69 37,678.95

CITY OF JEFFERSON BOARD OF EDUCATION -JACKSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

At June 30, 2010, payments due by fiscal year which includes principal and interest for these items are as follows:

Installment Sales &reement

Princi~al

Interest

Fiscal Year Ended June 30:

Total Principal and lnterest Fiscal Year Ended June 30:

General Obligation Debt

Principal

Interest

Unamortized Bond Prem~um

Total Principal and lnterest
Note 9: PRIOR YEAR DEFEASEMENT OF DEBT
In fiscal year 2004, the School District defeased certain general obligation bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the School District's basic financial statements. At June 30, 2010, none of these bonds are outstanding or considered defeased.
Note 10: ON-BEHALF PAYMENTS
The School District has recognized revenues and costs in the amount of $56,256.46 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies.
Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $33.393.08

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $14,043.78
Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer'sCost In the amount of $8,819.60
Note 11: SIGNIFICANT 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 costs which are disallowed under grant terms. The School District believes that such disallowances, if any, will be immaterial to its overall financial position.
Note 12: SUBSEQUENTEVENTS
In the subsequent fiscal year, voters authorized on March 15, 2011, the School District to issue general obligation bonds in the amount of $25,000,000.00. The proceeds from these bonds will be used for to pay the cost of (i) acquiring, constructing and equipping new school buildings and other buildings and facilities useful or desirable in connection therewith, including but not limited t o a new gymnasium, a new kitchen and a new two-story instructional complex at Jefferson High School and an additional instructional wing and a new cafeteria and kitchen at Jefferson Elementary School, and (ii) paying expenses incident to accomplishing the foregoing.
The School District desires to issue a total of not to exceed $24,925,000.00 of the Debt authorized in the form of (i) its not to exceed $18,825,000.00 General Obligation Bonds, Series 2011A (the "Series 2011A Bonds"), and (ii) its not to exceed $6,100,000.00 Taxable General Obligation Bonds (Direct Pay Qualified School Construction Bonds Project) which was approved by the Georgia State Financing and Investment Commission (GSFIC) on October 7 , 2010, Series 2011B (the "Series 2011B Bonds" and, together with the Series 2011A Bonds, the Bonds"). The School District has applied for, and has received, an allocation from the State of Georgia Board of Education allowing the School District to designate up to $6,100,000.00 of the Bonds as "qualified school construction bonds" under Section 54F of the Internal Revenue Code of 1986, as amended (the "Code"), and the School District will designate the Series 2011B Bonds as "qualified school construction bonds" for purposes of the Code; and in order to comply with the provisions of the Code and the conditions of the allocation from the Georgia Board of Education, the School District will use 1 0 0 percent of the "available project proceeds" (as such term is defined in the Code) of the Series 2011B Bonds to pay the costs of acquiring, constructing and equipping a new two-story instructional complex, a new cafeteria kitchen and a new lab instructional area at Jefferson High School and a new cafeteria and kitchen and instructional wing at Jefferson Elementary School (the "Qualified School Construction Bond Projects").
The Jefferson City School District has received approval from GSFIC for an additional $2,200,000.00 in Qualified School Construction Bonds in addition to the approved $6,100,000.00 previously authorized. This will not change the total of $24,925,000.00, it will only affect the amount of the General Obligation Bonds that will be issued. On July 7, 2011, the Board approved a supplemental resolution authorizing this decrease in General Obligation Bonds (Series 2011A) and increase in the Qualified School Construction Bonds (Series 2011B).

CITY OF JEFFERSON BOARD OF EDUCATION -JACKSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

On July 7, 2011, the School District issued $16,625,000.00 in General Obligation Bonds (Series 2011A) and $8,300,000.00 in Qualified School Construction Bonds (Series 2011B) for the purposes authorized by the voters on March 15,2011.
Also approved at the same time on March 15, 2011, voters of the Jefferson City School District authorized the continuance of a one percent sales tax (SPLOST) to raise no more than $24,576,000.00 or to be collected for 2 0 consecutive quarters, whichever occurs first, to be used for (i)paying a portion of the debt service on the outstanding Series 2004 General Obligation Bonds, Series 2005A and Series 2005B General Obligation Bonds, and Series 2011 General Obligation Bonds issued by the Jefferson City School District (the "Outstanding Jefferson Debt"), the maximum amount of the debt service to be paid with sales tax proceeds to be $16,300,000.00 and (ii) acquiring, constructing and equipping new school buildings and other including, but not limited to, a new gymnasium; (iii) acquiring new technology, safety and security equipment; (iv) acquiring school buses, school vehicles and transportation and maintenance equipment; (v) acquiring land and any improvements thereon, and modifying those improvements as desired; (vi) demolishing, adding to, renovating, repairing, improving, equipping and furnishing existing school buildings or other buildings or facilities useful or desirable in connection therewith, including, but not limited to new classrooms and kitchens; (vii) acquiring any property necessary or desirable therefore, both real and personal, (viii) acquiring a portion of the psychoeducational facility, (ix) acquiring textbooks and band instruments; (the "Jefferson School Projects"), the maximum amount of the Jefferson School Projects to be paid with sales tax proceeds to be $24,576,000.00 less the amount of Jefferson City School District's share of such proceeds used to pay the Outstanding Jefferson Debt.
Note 13: POST-EMPLOYMENT BENEFITS
GEORGIA SCHOOL PERSONNEL EMPLOYEES POST-EMPLOYMENT HEALTH BENEFIT FUND
Plan Description. The Georgia School Personnel Post-Employment Health Benefit Fund (School OPEB Fund) is a cost-sharing multiple-employer defined benefit post-employment healthcare plan that covers eligible former employees of public school systems, libraries and regional educational service agencies. The School OPEB Fund provides health insurance benefits to eligible former employees and their qualified beneficiaries through the State Employees Health Insurance Plan administered by the Department of Community Health. The Official Code of Georgia Annotated (OCGA) assigns the authority to establish and amend the benefit provisions of the group health plans, including benefits for retirees, to the Board of Community Health (Board).
Funding Policy. The contribution requirements of plan members and participating employers are established by the Board in accordance with the current Appropriations Act and may be amended by the Board. Contributions of plan members or beneficiaries receiving benefits vary based on plan election, dependent coverage, and Medicare eligibility and election. On average, plan members pay approximately 25 percent of the cost of the health insurance coverage.
Participating employers are statutorily required to contribute in accordance with the employer contribution rates established by the Board. The contribution rates are established to fund all benefits due under the health insurance plans for both active and retired employees based on projected "pay-as-you-go" financing requirements. Contributions are not based on the actuarially calculated annual required contribution (ARC) which represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years.

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

The combined active and retiree contribution rates established by the Board for employers participating in the School OPEB Fund were as follows for the fiscal year ended June 30, 2010:
For certificated teachers, librarians and regional educational service agencies:

July 2009
August 2009 - October 2009
November 2009 -June 2010

18.534% of covered payroll for August Coverage 14.492% of covered payroll for September - November Coverage 18.534% of covered payroll for December - July Coverage

For non-certificated school personnel:

July 2009 -June 2010

$162.72 per member per month plus Department of Education contribution of $22,838,311.00

No additional contribution was required by the Board for fiscal year 2010 nor contributed to the State OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the State plan for other post-employment benefits and are subject to appropriation.

The School District's combined active and retiree contributions to the health insurance plans, which

equaled the required contribution, for the current fiscal year and the preceding two fiscal years were

as follows:

Percentage

Required

Fiscal Year

Contributed

Contribution

Note 14: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)
Plan Description. The TRS is a cost-sharing multiple-employer defined benefit plan created in 1943 by an act of the Georgia General Assembly to provide retirement benefits for qualifying employees in educational service. A Board of Trustees comprised of active and retired members and ex-officio State employees is ultimately responsible for the administration of TRS. 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.
On October 25, 1996, the Board created the Supplemental Retirement Benefits Plan of the Georgia Teachers Retirement System (SRBP-TRS). SRBP-TRS was established as a qualified excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of TRS. The purpose of SRBP-TRS is to provide retirement benefits to employees covered by TRS whose benefits are otherwise limited by IRC Section 415. Beginning July 1,1997, all members and retired former members in TRS are eligible to participate in the SRBP-TRS whenever their benefits under TRS exceed the IRC Section 415 imposed limitation on benefits.
TRS provides service retirement, disability retirement, and survivor's benefits. The benefit structure of TRS is defined and may be amended by State statute. A member is eligible for normal service retirement after 3 0 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 2 5 years of creditable service.

CITY OF JEFFERSON BOARD OF EDUCATION -JACKSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

Normal retirement (pension) benefits paid to members are equal to 2% of the average of the member's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 4 0 years. Early retirement benefits are reduced by the lesser of one-twelfth of 7% for each month the member is below age 6 0 or by 7% for each year or fraction thereof by which the member has less than 3 0 years of service. It is also assumed that certain cost-of-living adjustments, based on the Consumer Price Index, will be made in future years. Retirement benefits are payable monthly for life. A member may elect to receive a partial lump-sum distribution in addition to a reduced monthly retirement benefit. Death, disability and spousal benefits are also available.

Funding Policy. TRS is funded by member and employer contributions as adopted and amended by the Board of Trustees. Members become fully vested after 1 0 years of service. If a member terminates with less than 1 0 years of service, no vesting of employer contributions occurs, but the member's contributions may be refunded with interest. Member contributions are limited by State law to not less than 5% or more than 6% of a member's earnable compensation. Member contributions as adopted by the Board of Trustees for the fiscal year ended June 30, 2010, were 5.25% of annual salary. The member contribution rate will increase to 5.53% effective July 1,2010. Employer contributions required for fiscal year 2010 were 9.74% of annual salary as required by the June 30, 2007, actuarial valuation. The employer contribution rate will increase to 10.28% effective July 1, 2010.

Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

(This page left intentionally blank)

CIW OF JEFFERSON BOARD OF EDUCATION-JACKSONCOUNW GENERAL FUND
SCHEDULE OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL
YEAR ENDEDJUNE 30.2010

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Sewices Investment Earn~ngs Miscellaneous
Total Revenues
EXPENDITURES
Current Instruct~on Support Services Pup11Sew~ces Improvement of Instructional Servlces Educational Media Services General Administrat~on School Administration Business Admin~strat~on Maintenance and Operabon of Plant Student Transportation Services Central Support Services Other Support Setvices Enterprise Operat~ons Community Services Food Servlces Operation
Capltal OutJay
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES fUSES)
Transfers In Transfers Out
Total Other Flnanclng Sources (Uses)
Net Change In Fund Balances
Fund Balances - Beginning
Adjustments
Fund Balances - End~ng

NONAPPROPRIATED BUDGETS

ORIGINAL (1)

FINAL (1)

Notes to the Schedule of Revenues. Exoend~turesand Chanms In Fund Balances BudPet and Actual (1) Orlg~naal nd Final Budget amounts do not include budgeted revenues or expenditures of the varlous princ~paal ccounts. The accompanylng schedule of revenues, expenditures and changes In fund balances budget and actual 1s presented on the modlfied accrual bas~sof accountlng wh~chIS the basls of accountlng used In the presentation of the fund f~nanclasl tatements
See notes to the basic financial statements.

SCHEDULE "i"
ACTUAL AMOUNTS

CITY OF JEFFERSON BOARD OF EDUCATION -JACKSON COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDEDJUNE 30.2010

FUNDING AGENCY PROGRAW/GRANT
Agr~culture.U. S. Department of Ch~ldNutrltlon Cluster Pass-Through From Georg~aDepartment of Educatlon Food Servlces School Breakfast Program Natlonal School Lunch Program
Total U. S. Department of Agr~culture
Educat~onU, . S. Department of Education Technology State Grants Cluster Pass-ThroughFrom Georg~aDepartment of Education Education Technology State Grants
Spec~alEducauon Cluster Pass-ThroughFrom Georgla Department of Educatlon Spec~aEl ducat~on
ARRA - Grants to States ARRA - Preschool Grants
Grants to States Preschool Grants
Total Spec~aEl ducatlon Cluster
State F~scaSl tab~lizat~oFnund Cluster Pass-Through From Georg~aDepartment of Education ARRA Education State Grants
T~tleI. Part A Cluster Pass-Through From Georg~aDepartment of Educat~on ARRA- Tltle I Grants to Local Educat~onaAl gencles Tltle I Grants to Local Educat~onaAl genc~es
Total T~tleI. Part A Cluster
Other Programs Pass-ThroughFrom Georgla Department of Education Career and Technical Education - Basic Grants to States Engl~shLanguageAcquisltlon Grants ImprovingTeacher Quality State Grants Safe and Drug-Free Schools and Commun~tles- State Grants
Total Other Programs
Total U. S. Department of Educat~on
Wealth and Human Services, U. S. Department of Ch~ldCare and Development Fund Cluster Pass-Through From Bright From the Start: Georgia Department of Early Care and Learnlng ARRA- Ch~ldCare and Development Block Grant
Defense, U. S. Department of Direct Department of the Alr Force R.O.T.C. Program
Total Federal Flnanclal Asslstance
N/A = Not Available

CFD A NUMBER

PASS THROUGH
ENTITY ID
NUMBER

EXPENDITURES IN PERIOD

CITY OF JEFFERSON BOARD OF EDUCATION -JACKSON COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30,2010
Notes to the Schedule of Exoend~tvrespf Federal Awards
(1) Includes the Federally asslgned value of donated comrnod~t~efosrthe Food Donat~onProgram In the amount of $57,955.89.
(2) Expendltures for the funds earned on the School Breakfast Program ($95,977.14w)ere not maintained separately and are Included In the 2010 Natlonal School Lunch Program.
Major Programs are identified by an asterisk (*) in front of the CFDA number.
The School D ~ s t r ~dc~t dnot prov~deFederal Assistance to any Subrec~p~ent
The accompanying schedule of expend~turesof Federal awards lncludes the federal grant actlvlty of the Clty of Jefferson Board of Education and 1s presented on the modified accrual basls of accounting whlch IS the basls fo accounting used In the presentation of the fund flnanclal statements.

SCHEDULE " 2

See notes to the bas~cfinancial statements.

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30,2010
AGENCY/ FUNDING
GRANTS Bright From the Start Georgia Department of Early Care and Learning Pre-Kindergarten Program
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 lntervent~on(1-3) Program
Upper Elementary Grades (4-5) Program Upper Elementary Grades - Early Intervention (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory( 9 1 2 ) Program Students with Disabilities
Category l Category II Category Ill Category IV Category V Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program 20 Days Additional Instruction Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Categorical Grants Pupil Transportation Regular Spars~ty Nursing Serv~ces Vocational Supervisors Education Equalization Funding Grant Food Services Vocational Education Amended Formula Adjustment Other State Programs Dual Enrollment
Georgia Special Needs Scholarship Fund - Reimbursement
Health Insurance National Teacher Certification Preschool Handcapped Program Teachers' Retirement V~rtuaSl chools Grant
Office of Treasuty and Fiscal Servlces Public School Employees Retirement
See notes to the basic financial statements.

SCHEDULE "3"
GOVERNMENTAL FUND TYPE GENERAL FUND

CITY OF JEFFERSON BOARD OF EDUCATION -JACKSON COUNTY SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDEDJUNE 30,2010

SCHEDULE " 4

PROJECT

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT YEAR (3)

AMOUNT EXPENDED IN PRIOR YEARS (3)

PROJECT STATUS

Paylng a portion of the debt service on the

outstanding Series 2000 General Obligation Bonds

previously issued by the City of Jefferson, Series

2004 General Obligation Bonds, Series 2005(A) and

Series 2005(8) General Obligation Bonds previously

issued by the City of Jefferson School D~strict.

$

9,996,000.00 $

9,996,000.00 $ 2,008,404.07 $

4,868,049.71

Ongoing

Acquiring, constructing and equipping new school build~ngsand other buildings or facilities useful or des~rablein connection therewith; including but not l~mitedto a new bus depot, acqulrlng new school equipment and school buses, school vehicles, and transportation equipment; acquiring land and any improvements thereon, and modifying those Improvementsas desired; adding to, renovating, repairing improving and equipping existing school buildings; acquiring any property necessary or desirable therefor, both real and personal; acquiring a portion of the psychoeducationalfacility: and acqu~ringtextbooks system-wide.

12,306,000.00

26,370,000.00

462,113.01

18,524,425.98 Ongoing

(1) The School District's original cost estimate as specified in the resolution caliingfor 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 basic financial statements.

(This page left intentionally blank)

CITY OF JEFFERSON BOARD OF EDUCATION - JACKSON COUNTY
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES- BY PROGRAM YEAR ENDED JUNE 30.2010

SCHEDULE "5"

DESCRIPTION
D~recItnstructional Programs Kindergarten Program Kindergarten Program-Early Intervention Program Primary Grades (1-3) Program Pr~maryGrades-Early lntervention (1-3) Program Upper ElementaryGrades (4-5) Program Upper ElementaryGrades-Early lntervention (4-5) Program Middle School ( 6 8 ) Program High School General Education (9-12) Program Vocat~onaLl aboratory (9-12) Program Students with Disabilities Category I Category Ill
Gifted Student - Category VI
Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL)
TOTAL DIRECT INSTRUCTIONAL PROGRAMS
Media Center Program Staff and ProfessionalDevelopment
TOTALQBE FORMULA FUNDS

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)( 2 )

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

(1) Compr~sedof State Funds plus Local Five Mill Share. (2) Allotments do not include the impact of the State amended formula adjustment.

See notes to the basic f~nanciasl tatements.

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENOTF AUDITSAND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
August 1 1 , 2 0 1 1

Honorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Jefferson Board of Education
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MAlTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENTAUDlTING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of City of Jefferson Board of Education as of and for the year ended June 30, 2010, which collectively comprise City of Jefferson Board of Education's basic financial statements and have issued our report thereon dated August 11,2011. 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.
Internal Control Over Financial Re~orting
In planning and performing our audit, we considered City of Jefferson Board of Education's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressingour opinions on the financial statements, but not for the purpose of expressingan opinion on the effectiveness of the City of Jefferson Board of Education's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City of Jefferson Board of Education's internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis.
Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. However, we consider item FS-7791-10-01, described in

the accompanying Schedule of Findings and Questioned Costs to be a significant deficiency in internal control over financial reporting. A significant deficiency is a deficiency, or combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Com~lianceand Other Matters

As part of obtaining reasonable assurance about whether City of Jefferson Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, 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 or other matters that are required to be reported under Government Auditing
Standards.

We noted certain matters that we have reported to management of City of Jefferson Board of Education in a separate letter dated August 11, 2011.

City of Jefferson Board of Education's response to the finding identified in our audit is described in the accompanying Schedule of Management's Responses. We did not audit City of Jefferson Board of Education's response and, accordingly, we express no opinion on it.

This report is intended solely for the information and use of management, members of the City of Jefferson Board of Education, others within the entity, 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,

I

*

usd dell W. Hinton, CPA, CGFM
State Auditor

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENOTF AUDITSAND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
August 11,2011

Honorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Jefferson Board of Education
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WlTH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WlTH OMB CIRCULAR A-133
Ladies and Gentlemen:
Compliance
We have audited City of Jefferson Board of Education's compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of its major Federal programs for the year ended June 30, 2010. City of Jefferson Board of Education'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 of Jefferson Board of Education's management. Our responsibility is to express an opinion on City of Jefferson Board of Education's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Au& of States, local Governmen&, and Nun-Profit Organiza~ons.Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the City of Jefferson Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on City of Jefferson Board of Education's compliance with those requirements.
In our opinion, the City of Jefferson Board of Education complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major Federal programsfor the year ended June 30,2010.

Internal Control Over Com~liance

Management of City of Jefferson Board of Education is responsible for establishing and maintaining effective internal control over compliance with the 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 the requirements that could have a direct and material effect on a major Federal program to determine the 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, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City of Jefferson Board of Education's internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a Federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a Federal program will not be prevented, or detected and corrected, on a timely basis.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above.

This report is intended solely for the information and use of management, members of the City of Jefferson Board of Education, others within the entity, 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,

.

~ u & e l lW. Hinton, CPA, CGFM State Auditor

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 30,2010

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-7791-08-01 FS-7791-09-01

Further Action Not Warranted Partially Resolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DlSBURSEMENTS Inadequate Internal Control Procedures over School Activity Accounts Finding Control Number: FS-7791-09-01

Processes have been adjusted to provide additional level of controls to the financial process at the High School. Bank reconciliations are completed by another bookkeeper and/or Financial Officer. Reports are provided on a monthly/quarterly basis and discussed with the principal.

PRIOR YEAR FEDERAL AWARD FINDINGS AND OUESTIONED COSTS

No matters were reported.

SECTION IV FINDINGS AND QUESTIONED COSTS

CITY OF JEFFERSON BOARD OF EDUCATION -JACKSON COUNlY SCHEDULE OF FINDINGS AND QUESTIONEDCOSTS YEAR ENDED JUNE 30,2010

I SUMMARY OF AUDITOR'S RESULTS

Financial Statements

Type of auditor's report issue: Governmental Activities; General Fund; Capital Projects Fund; Debt Service Fund; Aggregate Remaining Fund Information

Internal control over financial reporting: Material weakness identified? Significant deficiency identified?

Noncompliance material to financial statements noted:

Federal Awards

Internal Control over major programs: Material weakness identified? Significant deficiency identified?

Type of auditor's report issued on compliance for major programs: All major programs
Any audit findings disclosed that are required to be reported in accordance with OMB Circular A-133, Section 510(a)?

Identification of major programs:

CFDA Number(s)

Name of Federal Program or Cluster

Title I, Part A Cluster Special Education Cluster State Fiscal Stabilization Fund Cluster

Dollar threshold used to distinguish between Type A and Type B programs: Auditee qualified as low-risk auditee?

Unqualified N 0 Yes
No None Reported
Unqualified

CITY OF JEFFERSON BOARD OF EDUCATION -JACKSON COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30,2010
II FINANCIALSTATEMENT FINDINGSAND QUESTIONEDCOSTS
CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDlTURES/LIABILlTlES/DlSBURSEMENTS Inadequate Internal Control Procedures over School Activity Accounts Significant Deficiency Finding Control Number: FS-7791-10-01
Condition: This is a repeat finding (FS-7791-09-01, FS-7791-08-01, and FS-7791-07-01) for the fiscal years ended June 30,2009, June 30, 2008, and June 30, 2007, respectively. The accounting procedures of the School District were insufficient to provide adequate internal controls over the school activity accounts.
Criteria: The School District's management is responsible for designing and maintaining internal controls that provide reasonable assurance that transactions are processed according to established procedures and provide assurance of proper separation of duties. Such internal controls would limit any one individual's access to both physical assets and the related accounting records.
Questioned Cost: N/A
Information: The School Activity Accounts' procedures manual was reviewed and tests were performed to determine if controls were in place and operating effectively. Results of testing performed on the cash, revenues/receipts, and expenditures activities indicated that procedures developed by the School District were not being followed by all schools.
Cause: These deficiencies were the result of weaknesses in the monitoring of internal controls at the school level.
Effect: Errors, irregularities and misappropriation of assets may not be detected in a timely manner.
Recommendation: Management should monitor controls to verify that each school is recording and processing transactions according to established procedures.
Ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.

SECTION V MANAGEMENT'S RESPONSES

CITY OF JEFFERSON BOARD OF EDUCATION -JACKSON COUNTY SCHEDULE OF MANAGEMENT'S RESPONSES YEAR ENDED JUNE 30,2010

Finding Control Number: FS-7791-10-01

We concur with this finding. We have implemented a new process in 2008-09 that provides an additional review of the monthly bank reconciliations and financial reports. This third party review and sign off will enable us to achieve a higher level of financial accountability. This process in conjunction with annual external audits will provide a detailed assessment of our processes and procedures. The administrative staff is committed to supporting this effort to achieve a greater level of internal control.

Contact Person: Telephone: Fax: Email:

Kimberly Navas, Financial Director (706) 367-2782 (706) 367-2291 knavas@jeffcityschools.org