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" ~" .' ., ". .~ :~ '-'I' " , ," ,, l .1 ;, ',~' 'MiTCHELL COlJNlY, GEORG'A~ , " .' I ~ I < . .' ' ,. ~ ', ....... ", .. " ~ ,,; I'': '-. . ' , " . 1 ' \ ' , I rt 'j ~ , .: , REPORT ON AUDIT ' " r. , /\ '. ' ,. " ::'" l i t I. _ , , , , ' "OF,THE FINANCIAL STATEMENTS, ' ," ,' ~~ l ", ", '., ~ ~ ,'J . . , ~ -, ,, ',' -. ,FOR,TH, E:F'-IS.,C...AL YEAR '.' ';' E- NDED JU, NE'30, ' 200J, .. . , , , " '. i " ". " .... ' , , .... ,, , I.', " : r, ", ,, ,', "" , '.' . , ,' , ," J, I~ : ',I ", r, .' ,, ... ,,"?- ," " " ", " ." ' . ~,1 ."'/ ". " . , . . - ", ' -- , . '-~ ,-~ ,, ,. --' , " .\ 'I " ,"~ '; _ .I .- . " ., , " " ', , , ," ," . ''''~ ", , , ...., . . " } , ' , ' -: -., , ~., ,, " Russeli W..iilnton '-, , ~. , t, State, Auditor' , " " . . ,, '. ,. ' ~- ... ., " ,, , .. ,, ...." , c, ., ',. " " " ," " .' " " " " " ," ., ,, ,' ," ', . ,, ,, , .I" " " ,, , , ", ", cm' OF PELHAM BOARD OF EDUCATION - MITCHELL COUNTY - Tf,I~[ E OF CONTENTS- SECTION I FINANCIAL INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS EXHIBITS GENERAL-PURPOSE FINANCIAL STATEMENTS COMBINED STATEMENTS - OVERVIEW A COMBINED BALANCE SHEET ALL FUND TYPES 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 xcruxt. (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS 7 D STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCES FIDUCIARY f1JND TYPE - NONEXPENDABLE TRUST FUND 8 E STATEMENT OF CASH FLOWS FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND 9 F NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS 10 ADDmONAL FINANCIAL INFORMATION COMBINING AND INDIVIDUAL FUND STATEMENTS SPECIAL REVENUE FUND G COMBINING BALANCE SHEET 22 H COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 24 CAPITAL PROJEcrs FUND I COMBINING BALANCE SHEET 26 J COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 28 FIDUCIARY FUND TYPES K COMBINING BALANCE SHEET 30 L STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUND 31 CITY OF PELHAM BOARD OF EDUCATION - MITCHELL COUND- TABLE OF CONTENTS - SECTION I FINANCIAL ADDITIONAL FINANCIAL INFORMATION SCHEDULES 1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 32 2 SCHEDULE OF STATE REVENUE 34 3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 37 ALLOTMENTS AND EXPENDIT1JRES GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) 4 BY PROGRAM 38 5 BY SITE 39 SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-B3 SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION I FINANCIAL w, Rl'\.'1:.11 Hn",To"ll STAT( AUDITOR /.0--) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washmgton Street. S W Suue 214 Atlanta, Georgia 30334-K4(KI March 13, 2002 Honorable Roy E Barnes, Governor Members of the General Assembly Members of the State Board of Education and Supenntendent and Members of the City of Pelham Board of Education INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATIONSCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Ladles and Gentlemen We have audited the accompanying general-purpose financial statements of the City of Pelham Board of Education, as of and for the year ended June 30, 200 I, as hsted In the table of contents These general-purpose financial statements are the responsibihty of the City of Pelham Board of Education's management Our responsibihty IS to express an opmion on these general-purpose financial statements based on our audit. We conducted our audit In accordance with audttmg standards generally accepted In the United Stales of Amenca and the standards apphcable to financial audits contamed In Govemment AuditIng Standards, ISSUed by the Comptroller General of the United States Those standards require that we plan and perform the audit to obtam reasonable assurance about whether the financial statements are free of matenal misstatement An audit Includes exarmrnng, on a test basis, evidence supporting the amounts and disclosures In the financial statements An audit also mcludes assessmg the accountmg pnnciples used and Significant estimates made by management, as well as evaluating the overall financial statement presentation We beheve that our audit provides a reasonable baSIS for our opimon As descnbed In the notes to the general-purpose financial statements, the Board of Education's financial statements have been prepared usmg certam accountmg practices and pohcies which, m our opmion, vary in some respects from generally accepted accountmg pnnciples These vanances are descnbed as follows 2001ARL-13 * The general-purpose financial statements of the Board of Educanon 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 pnnciples * School activity accounts maintained at the mdrvidual schools are not mcluded in the general-purpose financial statements To conform to generally accepted accountmg pnnciples, these accounts should be mcluded m the general-purpose financial statements * The Board of EducalJon did not recognize as expenditures, m the year ended June 30, 2001. a portion of salanes and the correspondmg employer's cost of related benefits earned for contractual services completed pnor to June 30, 2001. Also funds received, subsequent to June 30, 2001, from the Georgia Department of Education for the State's share of these unrecorded salanes and related benefits were not recorded as revenue in the year under review Conversely, the Similar expenditures and related revenues for contractual services completed pnor to June 30, 2000, were Improperly recorded in the year ended June 30, 2001 To conform to generally accepted accountmg pnnciples, 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 determmed, but are believed to be matenal In our opimon, except for the effects on the general-purpose financial statements of the matters referred to in the precedmg paragraph, the general-purpose financial statements referred to above present fairly, m all matenal respects, the financial positron of the City of Pelham Board of Education as of June 30, 2001, and the results of Its operations and the cash flows of Its nonexpendable trust fund for the year then ended, in conformity WIth accountmg pnnciples generally accepted in the United States of Amenca In accordance WithGovernment Audltmg Standards, we have also ISSUed our report dated March 13, 2002, on our consideration ofthe City ofPelham Board ofEducation's mternal control over financial reportmg and our tests of Its compliance WIth certam provisions oflaws, regulations, contracts and grants That report IS an mtegral part of an audit performed m accordance With Government Audltmg Standards and should be read m conjunction With thrs report in considenng the results of our audit Our audit was performed for the purpose of formmg an opimon on the general-purpose financial statements of the City of Pelham Board of Educauon taken as a whole. The accompanymg combmmg and individual fund statements (Exhibits G through L) and the financial schedules (Schedules I through 5), which mcludes the Schedule of Expenditures of Federal Awards as required by U S Office of Management and Budget Circular A-B3, Audas a/States. Local Governments, and Non-Profit Organizauons, are presented for purposes of additional analysis and are not a required part of the general-purpose financial statements Such mformauon has been subjected to the 2001ARL-13 auditing procedures applied In the audit of the general-purpose financral statements and In our OpInIOn, except for the effects of the matters referred to In the third paragraph, such Information IS fairly stated, In all matenal respects, In relation to the general-purpose financial statements taken as a whole A copy of this report has been filed as a permanent record In the office ofthc State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24 Respectfully submitted, ~~~ll.W.. J6 HInIOn )~~ ~ . State Auditor RWHgp 2001ARL-13 CITY OF PELHAM BOARD OF EDUCATION - MITCHELL COUNTY CITY OF PELHAM BOARD OF EDUCATION - MITCHELL COUNTY COMBINED BALANCE SHEET ALL FUND TYPES JUNE 30 2001 ASSETS Cash and Gash Equivalents Investments Accounts Receivable Prepaid Items Inventones Food Donated Commochtl8s Purchased Food GENERAL FUND GOVERNMENTAL FUND TYPES SPECIAL CAPITAL REVENUE PROJECTS FUND FUND S 1,143,n329 $ 120,922 23 S 889.82579 977,00000 820,00000 108.82433 195,098 52 305,76261 35,611 00 12,45570 2,760 03 Total Assets $ 2,265,208 62 $ 331,23648 S_~~~~," LIABILITIES AND FUND EaUITY LIABILITIES Accounts Payable Salanes Payable Contracts Payable Retalnages Payable Deferred Revenue Funds Held for Other,; Total Llabllibes FUND EaUITY Fund Balances Reserved For BuS Replacement Funds For EndoYJrnent Corpus For lnventones Food Donatad Commodltles Purchased Food For SPLOST Projects For State Oaprtal Outlay PrOjects Unreserved Designated for Sett-lnavrance Undesiqnated Total Fund Equity $ 20,54509 $ 24,768 54 7,390 84 112,985 24 $ 381,443 40 65,53320 3184 S 27,93593 S 137,785 62 $ 446,97660 $ 12,455 70 2,760 03 $ 1.096,381 97 S 140,42715 2,096,845 54 $ 2,237.272 69 $ 178.23513 193,450 86 $ 472.22983 1,568.61160 Talaillab,litles and Fund Equity s 2,265,208 62 $ The notes to the general-purpose flnancJal statements are an Integral partof this statement -2- 331,238 48 $ 2,015.588 40 EXHIBIT "A" DEBT SERVICE FUND FIDUCIARY FUND TYPES TRUST AND AGENCY FUNDS TOTALS (Memorandum Only) JUNE 30, 2001 JUNE 30, 2000 S 000 S 4,82478 S 2,159,34609 S 6n.31831 20.000 00 1.817.00000 2.362.000 00 1.158 82 610,844 28 387,58200 35.611 00 29.52879 12,45570 2.760 03 3858 00 2,599 52 s 000 S 25.983 60 S 4,638,017 10 S 3,462,886 62 S 45.31363 S 30,226 90 120.37608 105.965 30 381.44340 65.53320 3184 S 11978 11978 11978 S 11978 S 612,817 93 S 138.311 98 S 28.995 00 S 20.000 00 S 20.00000 20.00000 12.455 70 2.760 03 1.096.381 97 3.858 00 2.599 52 728.311 56 32.14900 140,42715 122.80710 S 000 5.86382 2.753.17432 2.387.854 46 S 000 S 25.863 82 S 4.025.199 17 S 3.326,57464 s 000 S 3. CITY OF PELHAM BOARD OF EDUCATION - MITCHELL COUNTY COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BAlANCES ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30 2001 REVENUES Stale Funds Federal Funds Taxes Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media 8eMC8S General AdmlnlstratJon School Admtmstrabon Business AdmlnlSb'abon Ma,ntenance and Operaban of Plant Student Transportation Services Central Support Services Other Support Servrcee Food Services Qperaban Community Services Operatlons Capital Outlay Debt Service Principal Interest PaYing Agent Fees Total Expend,tures Excess01Revenues over (under) Expenditures OTHER FINANCING SOURCES (USES) Operating Transfers In Operatlng Transfers Out Total Other FinanCing Sources (Uses) Excess of Revenues and Other FinanCing Sources over (under) ExpendItures and OtherFinanCing Uses FUND BAlANCE JULY 1 Food Inventory- Net Change In Penoo Donated Commodities Purchased Food GENERAL FUND SPECIAL REVENUE FUND $ 8,002,003 64 $ 306,45562 39968 1,380,380 96 578,364 48 171,06782 110,62737 $ 8,751,83562 S 1,797,463 95 $ 6,045,372 29 $ 192,14617 178,10501 191,99703 148,15178 586,01900 131,860 32 567,69914 84,372 98 53,306 60 8,750 00 17,87551 30519 878,663 03 41,14250 53,911 84 3,50545 95,43998 13,694 12 24,565 84 689,11868 $ 8,205,961 02 $ 1,780,04142 $ 545,87460 $ 17,422 53 S S -683,04727 $ -683,04727 $ 2,70127 2,701 27 S -137,17267 $ 2,37444538 20,12380 164,568 85 8,59770 160 51 FUND BALANCE JUNE 30 $ 2,237,27269 $ _ _=19=3,=45:0:8;6:. The notes to the general-pul'?QSB finanCial statementsare an Integral part of this statement -4- EXHIBlrB" CAPITAL PROJECTS FUND DEBT SERVICE FUND TOTALS (Memorandum Only) YEAR ENDED JUNE 30, 2001 JUNE 30, 2000 s 270,39749 s 857885675 S 7,326,784 95 1,380,780 64 1,295,849 33 589,84816 $ 146,13590 1,314,34854 1,353,799 76 63,66278 345,35797 2n,11660 s 923,90843 s s 146,13590 S 11,619,343 90 10,253,550 64 S 6,924,03532 S 6,064,89303 S 797,14621 233 288 67 232,01685 195,50248 243,591 76 586,01900 131,860 32 581,39326 84,37298 53,306 60 33,31584 669,11866 17,87551 797,45140 350,491 38 185,758 69 174,87274 195,001 80 519,80054 115,nl03 520,72364 31,54516 48,25551 32,00291 612,586 59 9,57265 67,205 00 S 95,000 00 50,385 00 750 90 95,000 00 50,385 00 75090 130,000 00 55,99783 67571 S 797,14621 S 146,13590 S 10,929,284 55 S 9,115,15621 S 126,76222 S 000 S 690,05935 S 1,138,39443 S 680,34600 s 680,34600 S 807,10822 S 761,50358 s S 1,568,611 80 S 683,04727 S -683,04727 S 000 S -1,38381 1,38381 000 000 S 000 690,05935 S 3,300,51779 1,138,394 43 2,168,31431 8,59770 160 51 -3,32392 -2,86703 000 S 3,999,335 35 S 3,300,51779 -5- CITY OF PELHAM BOARD OF EDUCATION - MITCHELL COUNTY COMBINED STATEt\lfNT OF REyENVES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET N n ACTUAL - (N0tt-GAAP BASIS) GENERAh ) !~_:!. SPECIAL REyENUE FUNDS Ye.,,; ONpED JUNE 30 2001 EXHIBIT C GENERAL FUND ACTUAL (BUDGET BUDGET BASIS) REVENUES State Funds Federal Funds Taxes Other Funds $ 7,84240029 $ 8,002,00364 48.11200 399 88 484.00000 578.364 48 14.00000 171,06782 Total Revenues $ 8.388.51229 $ 8.751.63582 EXPENDITURES Current Instruction Support Services Pupil services Improvement of Instructional Services Educational Mecha services General AdmlnlstrabOn School Admuustratlon BuSiness AdmlnlStnrtlon Maintenance and Operation of Plant StudentTransportatlon 5eMCe& Central Support SeNIces Other Support servrcee Food SeN,,:eS Operation Community SeIVll:eSOperancns capllal Outlay s 6.475.706 00 $ 6.045.372 29 349.477 00 271.42400 190.581 00 178.125 00 834 280 00 180.67100 764.291 00 100.880 ()() 87.82100 12.200 00 192146 17 178.10501 191.99703 148.15178 586.01900 131.880 32 567.899 14 84.37298 53.306 80 8.750 ()() 19.000 00 17.87551 30519 Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES (USES) $ 9.244.056 00 S 8.205.981 02 S -855.54371 $ 545.87480 Other Sources Other Uses Total Other Flnandng Sources (Uses) S -91.73500 $ -683.047.27 $ -9' .735 00 $ -663.04727 Excess of Revenues and OtherFlnanang Sources over(under) Expenditures and Other Flnanong Uses S 947.27871 $ -137172 67 FUND BAlANCE JULy 1 2000 2.15852382 2.374.44536 Food Inventory - Net Change In Period Donated Commodities Purcnased Food FUND BAlANCE JUNE 30 2001 s s 1,211,24491 2,237:27269 SPECIAL REVENUE FUND ACTUAL (BUDGET BUDGET BASIS) $ 291.801 00 $ 306.45582 1.429 338 00 1 380.38098 112.80000 110.62737 S 1.833.93900 $ 1.797.463 95 S 917.20411 S 878.88303 44.186 00 56.00200 98.51051 41.14250 53.911 84 3.50545 95.43998 13.890 00 13.894 12 692.29500 25.114 ()() 24.56584 889.11888 $ 1.847.00162 $ 1.780.041 42 $ -13.06262 $ 17.42253 S 2.701.27 $ 2.701 27 $ 13.082 62 $ 20.12380 163.31141 164.568 85 8.59770 18051 $ 150,24879 S 193:450 B8 The notes to the general-purpose ftnanaal statements ere an l:ntegral partof ttns statement -7 - CITY OF PELHAM BOARD OF EDUCATION - MITCHELL COUNTY STATEMENT OF REVENUES EXPENSES ANp CHANGES IN FUND BALANCES FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND YEAR ENDED JUNE 30, 2001 EXHIBIT "0" OPERATING REVENUES Donations OPERATING EXPENSES Current Support Services Other Support SeMC8s Community Services Operations Total Operabng Expenses Operabng Income NONOPERATING REVENUES Interest Eemed Net Income FUND BALANCE JULY 1 FUND BALANCE JUNE 30 C M AND BERNICE C STRIPLING PELHAM FFA SCHOLARSHIP TRUST FUND TOTALS (Memorandum Only) YEAR ENDED JUNE 30, 2001 JUNE 30, 2000 $ 1,00000 $ 1,00000 $ 1,00000 S 2,44500 $ 2,44500 $ 2,234 00 43345 $ 2,44500 $ 2,44500 $ 2,66745 S -1,44500 S -1,44500 $ -1,66745 1,251 97 1,251 97 1,029 56 $ -19303 $ -19303 $ -63789 26,05685 26,056 85 26,694 74 $ 25,86382 $ 25,863 82 $~~==.-.. The notes to the genera~purpose financral statements are an Integral part of tms statement -8- CITY OF PELHAM BOARp OF EDUCATION - MITCHELL COUNTY STATEMENT OF CASH FLOWS FlpUCIARY FUND TYPE - NONEXPENpABLE TRUST FUND YEAR ENDED JUNE 30, 2001 EXHIBIT "E" Cash Flows from Operatmq Acnvines Cash Received from DonatIons Cash Paid for Scholarships Net Cash Provided (Used) by Operabng Activities Cash Flows from lnvestmq Acuvmes Interest ReceIved on Investments Net Cash Provided (Used) by lnvestmq Acbvltles Netlnerease (Decrease) In Cash Cash and Cash EquIValents JUly 1 Cash and Cesh EqUivalents - June 30 C M AND BERNICE C STRIPLING PELHAM FFA SCHOLARSHIP TRUST FUND TOTALS (Memorandum Only) YEAR ENDED JUNE 30, 2001 JUNE 30, 2000 $ 1,00000 S 1,00000 $ -2,44500 -2,44500 1,00000 -2,66745 $ -1,445 00 $ -1 ,445 00 $ $ 1,00274 $ s 1,00274 -1 ,667 45 1,16600 $ 1,00274 $ 1,00274 $ s -44226 $ -44226 $ 5,14726 5,14726 1,16600 -501 45 5,64871 $ 4,70500 $ 5,14726 The notes to the general-purpose financial statements are an Integral part of this statement -9- CITI' OF PELHAM BOARD OF EDUCATION - MITCHELL COUNTY EXHIBIT "1''' NOTES TO TI1E GENERAL-PURPOSE FINANCIAL STATEMEl\iS JUNE 30, 200 I Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY The City of Pelham Board of Education (School Distnct) was estabhshcd under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Supenntendent appointed by the Board The School District IS orgamzed as a separate legal entity and has the power to levy taxes Its budget IS not subject to approval by any other entity Accordingly, the School Distnct IS a pnmary government and consists of all the organizations that compose ItS legal entity FUND ACCOUNTING The School District uses funds to report on Its financial positron and the results of Its operations Fund accounting IS designed to demonstrate legal comphance and to aid financial management by segregating transactrons related to certain governmental functions or acuvines A fund IS a separate accounting entity With a self-balancing set of accounts General FIxed Assets are recorded as expenditures In the vanous funds at the time of purchase A General FIXed Assets Account Group IS not presently mamtamed by the School District To conform to generally accepted accounting pnnciples, a General FIXed Assets Account Group should be rnamtamed for reporting the cost of assets acquired by governmental fund types Although "school activity accounts" are maintained at the mdrvidual schools, neither the assets, habihties 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 DIStnCt, In comphance WIth generally accepted accounting pnnciples apphcable to governmental uruts, unless otherwise disclosed In these notes Funds presented In this report are as follows GOVERNMENTAL FUND TYPES - are used to account for all or most of a School Distnct's educational acnvines Governmental Fund Types mclude GENERAL FUND - the fund used to account 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 SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restncted to expenditures for specified purposes These funds are received pnmanly from the Georgia Department of Education and from the Federal government to accomphsh specific educational objectives - 10 - cm' OF PELHAM BOARD OF EDUCATION - MITCHELL COUNTY EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINAl\;CIAL STATEMENTS JUJ"E 30. 2001 Note I SUMMARY OF SIGNIFICA!'H ACCOrn;'TING POLICIES CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for thc acquismon or construction of major capital facihnes DEBT SERVICE FUND - the fund used to account for the accumulatIon ofresources for, and the payment of, general long-term pnncipal, Interest and paying agent fees for the City of Pelham, Georgia, General Obhganon School Bonds, Senes 1993 FIDUCIARY FUND TYPES - the funds used to account for assets held by a government umt In a trustee capacity or as an agent for individuals, pnvate organizations, other government umts and/or other funds These funds Include NONEXPENDABLE TRUST FUND C. M. and Bernice C. Stripling Pelham FFA Scholarship Trust Fund - the fund used to account for an endowment of which the corpus IS to be Invested and preserved intact WIth the resultant Income to be used to provide a scholarship to the mostoutstandmg graduatIng student in the Agncu!tural Education (Future Farmers of Amenca) Program at Pelham High School AGENCY FUNDS - the funds used to account for assets held In a fiduciary capacity for other funds. governments, or mdrviduals 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 usmg a current financial resources measurement focus WIth this measurement focus, only current assets and current habihnes generally are Included on the balance sheet Operating statements ofthese funds present Increases (I e., revenues and other financing sources) and decreases (I e , expenditures and other financing uses) m net current assets their reported fund balance IS considered a measure of available spendable resources Lrabihties which are expected to be financed from available spendable resources are reported as habilmes In the governmental funds All nonexpendable trust funds are accounted for on a flow of econormc resources measurement focus With this measurement focus, all assets and habihues associated With the operauon of these funds are Included on the balance sheet Operatmg statements present increases (e g , revenues) and decreases (e g , expenses) In net total assets Agency funds are purely custodial In nature and do not Involve measurement ofresults ofoperations Governmental funds are accounted for USIng the modified accrual basis of accounting under which Revenues are recognized when susceptible to accrual (I e . when they become both measurable and available) "Measurable" means the amount of the transaction can be determined and "available" - 11 - CITY OF PELHAM BOARD OF EDUCATIO!\" - MITCHELL COUNTY EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE F])\;ANCIAL STATEMENTS JUNE 30. 2001 Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES means collectible within the current penod or soon enough thereafter to be used to pay habihues of the current penod The School Distnct considers receivables collected WIthin srxty days after yearend to be available and therefore susceptible to accrual Nonexchange transacnons, 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 recogruzed In the fiscal year m which all eltgibrhty requirements have been satisfied Expenditures are generally recognized when the related fund habrhty IS mcurred A departure from the above defimtrons IS the accounting treatment afforded the final two payments on General Fund teachers' and bus dnvers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts Dunng fiscal year 200 I, a substantial number ofpersonnel of the School Distnct were employed for a one hundred and mnety day penod begmmng In August 2000 and ending In early June 2001 Personnel contracts for this employment penod specify that compensation be paid in twelve equal monthly payments begmmng m September 2000 and ending m August 2001 State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the School Distnct in the same twelve months As of June 30, 2001, compensation under these employment contracts had been earned, but two of the 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 Distnct subsequent to June 30, 2001 Also, the State's portion of the compensation paid in July and August 2001 was received and recorded as revenue in the fiscal year subsequent to June 30, 2001 Conversely, the smular expenditures and related revenues for contractual services completed pnor to June 30, 2000, were recorded in the year ended June 30, 2001 Generally accepted accounting pnnciples require that revenues be recorded when available and measurable and that expenditures be recorded when mcurred, rather than when funds are received or disbursed The accrual basis of accounting, as required by generally accepted accounting pnnciples, IS utihzed by nonexpendable trust funds Under the accrual basis of accounting. revenues are recorded when earned and expenses are recorded at the time habihues are mcurred Agency funds are accounted for using the modified accrual basis ofaccounting in recogrnzmg assets and habihties BUDGET The City ofPelham Board ofEducation's budget IS a complete financial plan for the School Distnct's fiscal year and IS based upon estimates of expenditures together WIth probable funding sources. There IS no statutory prohibition regarding overexpenditure of the budget at any level The budget - 12 - CITY OF PELHAM BOARD or EDUCATION - MITCHELL COUNTY EXHIBIT "F" NOTES TO ruE GENERAL-PURPOSE FINA,NCIAL STATEME!\'TS JUNE 30, 2001 Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES for all governmental funds IS prepared by fund, function and object The legal level of budget control was estabhshed by the Board at the aggregate level The budget for governmental funds was prepared on a basis other than generally accepted accounting pnnciples The budget process begins when the School District's adrmmstration prepares a tentatrve budget for the Board's approval After approval ofthis tentative budget by the Board, such budget IS advertised at least once m a newspaper of general circulation m the locality At the next regular meeting of the Board after advertisement, the Board receives comments on the tentalIve 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 Educallon The Board may increase or decrease the budget at any lime dunng the year All unexpended budget authonty 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 ongmal matunties of three months or less from the date of acqursition m authonzed financial msntunons Georgia Laws OCGA 45-8-14 authonze the School Distnct to deposit Its funds in one or more solvent banks or Insured Federal savings and loan associations INVESTMENTS COMPOSITION OF INVESTMENTS Investments made by the School Distnct in nonparncipatmg mterest-eammg contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating mterest-earmng contracts and money market investments WIth a matunty at purchase ofone year or less are reported at amortized cost Both parncipatmg interest-earmng contracts and money market investments With a matunty at purchase greater than one year are reported at fair value The Official Code of Georgia Annotated Section 36-83-4 authonzes the School Distnct to invest Its funds In selecting among options for investment or among mstrtutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the followmg (1) Obhgauons Issued by the State of Georgia or by other states, (2) Obligations Issued by the United States government, (3) Obhgations fully insured or guaranteed by the United States government or a Umted States government agency. (4) Obhgations of any corporallon of the United States government, - 13- CITY OF PELHAM BOARD OF EDUCATION - MITCHELL COUNn' EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note I SUMMARY OF SIGNIFICAI\'T ACCOUNTING POLICIES (5) Pnme banker's acceptances, (6) The Local Government Investment Pool adrmrnstered by the State of Georgia, Office of Treasury and Fiscal Services, (7) Repurchase agreements, and (8) Obhgations 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 mforrnanon available Receivables are recorded when either the asset or revenue recogmtion cntena 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 uncolleclible receivables PROPERTY TAXES The City of Pelham fixed the property tax levy for the 2000 tax year (calendar year) on September 18,2000 (levy date), Taxes were due on December 20,2000 (lien date) Taxes collected within the current fiscal year or withm 60 days after year-end are reported as revenue in fiscal year 2001 The City of Pelham City Clerk bills and collects the property taxes for the School Distnct Property tax revenues dunng the fiscal year ended June 30, 2001 for maintenance and operations amounted to $211,07026 The tax rmllage rate levied for the 2000 tax year (calendar year) for the City of Pelham Board of Educanon was as follows (a mill equals $1 per thousand dollars of assessed value) SchooI Operations ~mllls 'SALES TAXES Local Option Sales Tax revenue dunng the fiscal year amounted to $367,294 22 and was recorded m the General Fund Local Option Sales Tax IS to be used for the maintenance and operation of the School Distnct Special Purpose Local Option Sales Tax IS to be used for capital outlay for educational purposes and debt service Special Purpose Local Option Sales Tax revenue dunng the fiscal year amounted to $735,984 06 and was recorded in the Capital Projects and Debt Service Funds The State will term mate collection of this tax once an additional $978,131 18 has been collected or on June 30, 2002, whichever occurs first - 14 - crn OF PELHAM BOARD OF EDUC AnON - MITCHELL COUNTY EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001 Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES INVENTORIES FOOD INVENTORIES Inventones of donated food commodities used in the preparation of meals are reported on the Combmed Balance Sheet at their Federally assigned value Purchased foods mventones are reported on the Combined Balance Sheet at cost (first-m, first-out) Donated food commodiues are recorded as revenues and expenditures at the lime commodity Items are received Purchased foods inventones are recorded as expenditures at the lime ofpurchase The mventones reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which mdicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets PREPAID ITEMS Payments made to vendors for services that Will benefit penods subsequent to June 30, 2001, are recorded as prepaid Items LONG-TERM DEBT AGREEMENT The City ofPelham, Georgia (City Government) ISSUed General Obhgation Bonds to provide funds for the acqutsttion and construction of major capital facilities The general obhganon bonds are direct obhgations and pledge the full faith and Credit of the City Government In accordance WIth the bond vahdation (CIvil Action FIle No 93-V-743)" the City ofPelbam shall provide for the assessment and collection of an annual tax sufficient m amount to pay the pnncrpal ofand interest on said debt by the levy of an annual tax upon all property subject to taxation for school bond purposes withm the corporate limits of the City .. " Although not required by formal agreement to do so, dunng fiscal year 200 I, the Board paid $146,135.90 for debt service on the City Government's general obhgation bonds However, as discussed above, the debt associated With those general obhgation bonds IS the liability of the City Government, therefore that debt IS not recorded on the financial statements of the CIty of Pelham Board of Education INTERFUND TRANSACTIONS The School District has the followmg types ofmterfund transactions Reimbursements of expendItures/expenses mrttally made from a fund that are properly applicable to another fund are recorded as expenditures/expenses in the reimbursmg fund and as reductions of expenditures/expenses in the fund that IS reimbursed Operating transfers are recorded for all mterfund transactions other than reimbursements - 15 - CITY OF PELHAM BOARD OF EDUCATION - MITCHELL COUNTI" EXHIBIT "F" NOTES TO THE GE!'iERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30.2001 Note I' SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES MEMORANDUM ONLY - TOTAL COLUMNS Total columns on the general-purpose financial statements are captioned "Memorandum Only" to mdicate that they are presented only to facilitate financial analysis Data in these columns do not present financial position, results ofoperations or cash flows m conformity Withgenerally accepted accountmg principles Neither are such data comparable to a consolidation. Interfund ehmmanons have not been made in the aggregation of this data Note 2 DEPOSITS COLLATERALIZAnON OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any lime in any depository for a tune longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee of Insurance, orby collateral. The aggregate of the face value of such surety bond and the market value of secunties pledged shall be equal to not less than 110 percent ofthe pubhc funds bemg secured after the deduction ofthe amount ofdeposit msurance If a depository elects the pooled method (OCGA 45-8-13 1) the aggregate ofthe market value ofthe secuntres pledged to secure a pool ofpubhc funds shall be not less than 110 percent ofthe dailypool balance OCGA Section 45-8-11 (b) provides an officer holdmg pubhc funds may, m his discretron, waive the requirement for secunty in the case ofoperatmg funds placed in demand deposit checkmg accounts Acceptable secunty for deposrts consists of anyone of or any combmation of the following: (1) Surety bond SIgned by a surety company duly qualified and authorized to transact busmess withm the State of Georgia, (2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, (3) Bonds, bills, notes, certificates ofmdebtedness or other direct obhgations of the Umted States or of the State of Georgia, (4) Bonds, bills, notes, certificates of mdebtedness or other obhgations of the counties or municipalIlles of the State of Georgia, (5) Bonds of any pubhc authority created by the laws of the State of Georgia, providmg that the statute that created the authonty authonzed the use of the bonds for this purpose, (6) Industnal revenue bonds and bonds of development authonties created by the laws of the State of Georgia, and - 16 CITY or PELHAM BOARD OF EDUCATION - MITCHELL COUNTY EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 3D. 2001 Note 2 DEPOSITS (7) Bonds, bills, notes, certificates of Indebtedness, or other obhgations of a subsidiary corporation of the Umted States government, WhICh are fully guaranteed by the Umted States government both as to pnncipal and Interest or debt obhgations 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 $4,443,852.77 The amounts ofthe total bank balances are classified Into three categones of credit nsk Category I - 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 secunties held by the pledging financial mstitunon's trust department or agent 10 the School District's name. Category 3 - Uncollaterahzed deposits. (TIns Includes any bank balance that IS collateralized With secunties held by the pledgmg financial msntution, or by Its trust department or agent but not In the School Distnct's name) The School Distnct's deposits are classified by nsk category at June 30, 2001, as follows: RIsk Category Bank Balance I 2 3 Total $ 400,15982 1,370,28776 2,673,405 19 s 4 443,852,77 Note 3. NON-MONETARY TRANSACTIONS The School DIStnCt receives food commodrties from the Uruted States Department of Agnculture (USDA) for school breakfast and lunch programs. These cornmodiues are recorded at their Federally assigned value. See Note 1 - Inventories Note 4. RISK MANAGEMENT The School DIStnCt IS exposed to vanous nsks of loss related to torts, theft of, damage to, and destrucnon of assets, errors or ormssions, Job related Illness or mjunes to employees, natural disaster and unemployment compensation - 17 - CITY OF PELHAM BOARD OF EDUC ATION . MITCHELL COUNTY EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001 Note 4 RISK MANAGEMENT The School District has obtained commercial Insurance for nsk of loss associated with torts and assets The School Distnct has neither significantly reduced coverage for these nsks nor Incurred losses (settlements) which exceeded the School Distnct's Insurance coverage In any ofthe past three years The School District has elected to self-Insure for all losses related to natural disaster In addinon, the School DIstrict has elected to self-Insure for errors or orrussions, which Includes, among other nsks, nsks for sex ual harassment and discnrrunanon The School District has not expenenced any losses related to these nsks In the past three years The School District IS self-Insured Withregard to unemployment compensation claims A premium IS charged when needed by the General Fund to each user fund on the basis of the percentage of that fund's payroll to total payroll In order to cover estunated chums budgeted by management based on known claims and pnor expenence The School District accounts for cl3.1IDS With expenditure and habihty bemg reported when It ISprobable that a loss has occurred, and the amount of that loss can be reasonably estimated Changes In the unemployment compensation claims habihty dunng the last two fiscal years are as follows 2000 2001 Begmnmg of Year Liabihtv Claims and Changes in Estimates Claims Paid End of Year Llablhty $ 000 $ 36016 $ 36016 $ 000 $ 000 s 000 S 000 $ 000 The School District parncipates In the Georgia Education Workers' Compensation Trust, a pubhc entity nsk pool organized on December I, 1991, to develop, Implement and adnumster a program of workers' compensation self-msurance for Its member organizations The School District pays an armual premium to the Trust for ItS general Insurance coverage Additional Insurance coverage IS provided through an agreement by the Trust WIth the Umted 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 The School District has purchased surety bonds to provide additional Insurance coverage as follows - 18 - CITY OF PELHAM BIJ'\RD OF EDUCATION - MITCHELL COU1'<'TY EXHIBIT "F" NOTES TO THE GENFRAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 4 RISK MANAGEMENT POSition Covered Amount Supenntendent Each Pnncipal Office ManagerlBookkeeper PersonneVPayroll Clerk Accounts Payable Clerk SecretarylBookkeeper S 100,00000 $ 5,00000 s 5,00000 s 5,00000 $ 5,000.00 s 5,00000 Note 5 ON-BEHALF PAYMENTS The School Distnct has recognized revenues and expenditures m the amount of S115,726 50 for health msurance and retirement contnbutlons paid on the School Distnct's behalf by the followmg State Agencies Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance ofNon-Certified Personnel In the amount of $94,241 50 Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of$8,615.00 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 6 SIGNIFICANT COMMITMENTS The followmg IS an analysis ofSignificant outstanding constructIon or renovation contracts executed by the School District as of June 30, 2001, together WIth fundmg available Protect 01 LW/00S-784-008 New Tenms Courts Unearned Executed Contracts S 934,441 39 63,600 00 Funding Available From State $ 31,43851 s $ 998041 39 31,438,51 The amounts descnbed m tlus note are not reflected in the general-purpose financial statements - 19 - CITY OF PELHAM BOARD OF EDUCATION MITCHELL COUNTY EXHffilT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001 Note 7 CONTINGENT LIABILITIES Amounts received or receivable principally from the Federal govenunent 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 Distnct believes that such disallowances, If any, WIll be immatenal to ItS overall financial posmon Note 8- SUBSEOUENT EVENTS On November 6, 2001, the voters of Mitchell County voted In favor of a Special Purpose Local Option Sales Tax ofone percent to be Imposed on all sales and uses In MItchell County for a penod of time not to exceed 20 calendar quarters, beginning upon the termmanon ofthe current such sales and use tax, to raise not more than $12,250,00000 A portion ofthe proceeds from the tax are to be used for the benefit of the City of'Pelharn Board ofEducation as stated In part on the Official Ballot of MItchell County as follows: "the repayment of pnncipal and Interest on outstanding City of Pelham General Obligation School Bonds, Senes 1993, commg due on February I, 2003, and thereafter, the maximum amount ofsuch repayment ofpnncipal and mterest not to exceed $250,000 and the acquisinon, construction and equipping of capital outlay projects for the Pelham City School System consisting of the renovation of Pelham CIty HIgh School and additions. expansions, Improvements, renovations, modifications and equipping of exisnng school facihtres of the Pelham School System, including the acquismon of all necessary property, both real and personal, necessary therefor, in an amount not to exceed $4,290,000 " Note 9 RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) TRS PLAN DESCRIPTION Substantially all teachers, admimstranve and clencal personnel employed by local school districts are covered by the Teachers Retirement System of'Georgia (TRS), which IS a cost-shanng multiple employer defined benefit pension plan TRS provides service retirement, disabihty 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 contnbute 5% of their gross earmngs to TRS The School Distnct makes monthJy employer contnbunons to TRS at rates adopted by the TRS Board ofTrustees in accordance WIth State statute and as advised by their mdependent actuary The required employer contribution rate IS 11.29% and employer contributions for the current fiscal year and the precedmg two fiscal years are as follows - 20- CIlY OF PELHAM BOARD OF EDUCATION - MITCHELL COUN1Y EXHIBIT'T" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 :'ole 9 RETIREMENT PLANS Fiscal Year 2001 2000 1999 Percentage Contnbuled 100% 100% 100% Required ConlnbullOn s 707,65974 $ 628,68234 s 631,106.21 - 21 - CITY OF PELHAM BOARD OF EDUCATION - MITCHELL COUNTY COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 2001 ASSETS Cash and Cash EqUivalents Accounts Receivable Inventones Food Donated Commodltles Purchased Food Total Assets LIABILITIES AND FUND EQUITY LIABILITIES Cash Overdraft Accounts Payable Salanes Payable Deferred Revenue Total LIabilities FUND EQUITY Fund Balances Reserved For Inventones Food Donated CommodrtJes Purchased Food Unreserved Undeslgnated Total Fund Equity Total Llabrllties and Fund Equrty SCHOOL FOOD SERVICES FUND LOTIERY PROGRAMS S 219,24127 S 25,27834 4,61638 12,45570 2,76003 s 234,45700 $ =_.f;:!2,9.,,8g9g4;7~2"- s 5,89394 $ 35,11220 $ 41,00614 $ 6,02264 23,87208 29,894 72 s 12,455 70 2,76003 178,23513 $ 000 $ s 193,450 86 000 $ 234 ,457 00 $ ~_,g,,:2:9:,8:9;4~i7.2. See notes to the genera\-purpose finanCIal statements - 22- EXHIBIT "G" FEDERAl PROGRAMS TOTALS JUNE 30, 2001 JUNE 30, 2000 $ 244,51961 $ 216,23279 s 190,48214 195,09852 127,56022 12,455 70 2,76003 3,858 00 2,59952 $ 190:48214 $ 454,83386 $ ~...3.5.0.:25;0=5~3~ $ 123,59738 $ s 123,59738 52,17315 12,851 96 24,76854 29,343.23 54,000 96 112,98524 104,16530 3184 3184 $ 190,48214 $ 261,38300 $ 185,68168 $ $-----"00-0~ $ 000 s 12,45570 $ 2,76003 3,858 00 2,59952 178,23513 158,11133 193:450 86 s_---1'6=4,=56-8"8"5- $ 190:48214 $ 454,833 86 $~~=~.::;;:.. - 23- CITY OF PELHAM BOARD OF EDUCATION - MITCHELL 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 Instructron Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration Maintenance and Operabon 01Plant Other Support Services Food Services Operallon Debt Service Pnnclpal Interest Total Expendrtures Excess of Revenues over (under) Expendrtures OTHER FINANCING SOURCES Operating Transfers In Excess of Revenues and Other FinanCIng Sources over (under) Expendrtures FUND BALANCE JULY 1 Food mventorv- Net Change In Period Donated Commodities Purchesed Food FUND BALANCE JUNE 30 See notes to the genera~purpose financial sla1ements - 24- SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS $ 50,59200 $ 255,86362 528,02309 110,62737 s s 689,24246 255,86362 $ 202,881 05 27,30700 4592 13,294 00 13,694 12 $ 689,11866 $ 669,11866 $ 257,222 09 $ 20,12380 $ -1,358 47 $ s 20,12380 164,566 85 8,59770 16051 1,358 47 000 000 $ 193,45086 $ ...0..0:0~~ EXHIBIT "H" FEDERAL PROGRAMS TOTALS YEAR ENDED JUNE 30, 2001 JUNE 30, 2000 $ 306,45562 $ 319,67319 $ 852,35787 1,380,380 96 1,288,71042 110,62737 107,41893 $ 852,35787 $ 1,797,46395 $ 1,715,802 54 $ 675,78198 $ 878,663 03 $ 819,629 98 13,83550 53,86592 3.50545 82,14598 24,56584 41,14250 53,91184 3.50545 95,43998 13,694 12 24,56584 669.11866 33,38172 57,07928 58.820 22 12,12229 21,944 35 612,586 59 40.00000 1,92283 $ 853.70067 $ 1,780,04142 $ 1,657,48926 s -1,34280 $ 17,422 53 $ 58,33328 1,34280 2,70127 98881 $ 000 $ 20,12380 $ 59,322 09 000 164,56885 111,43771 8,59770 160 51 -3,32392 -2,88703 $ 000 $ 193,450 86 $_.....:==.::::.. - 25- CITY OF PELHAM BOARD OF EDUCATION - MITCHELL COUNTY COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30 2001 ASSETS Cash and Cash EQUivalents Investments Accounts Receivable REGULAR GEORGIA STATE FINANCING AND INVESTMENT COMMISSION $ 94,95996 s 269,56320 370.00000 7.26987 177,41340 Total Assets $ 472,229 83 $ ~_=:.::.:.::.:::~ L1ABILmES AND FUND EQUITY LIABILITIES Contracts Payable Retamages Payable Total l.rablhtres FUND EQUITY Fund Balances Reserved For SPLOST Projects For State Capital Outlay Projects Unreserved Undeslgnated Total Fund Eqully Total lIabli,hes and Fund EQUIty $ 381,44340 65,53320 $ 446.97660 $ 472,229 83 $ 000 $ 472.22983 $ 000 $ 472.229 83 $~_=:.4:46:..9:76.6~0~ See notes to the genera~purpose financial statements - 26- EXHIBIT "I" SPECiAl PURPOSE LOCAL OPTION SALES TAX TOTALS JUNE 30, 2001 JUNE 30, 2000 $ 525,30263 $ 889,82579 $ 146,20847 450,00000 820,00000 483,000 00 121,07934 305,76261 132,29511 s $ 1,096,381 97 761,50358 $ 381,44340 65,53320 $ 446,97660 $ 1,096,38197 $ 1,096,381 97 $ 728,311 56 32,14900 000 472,229 83 1,04302 $ 1,096,381 97 $ 1,568,61180 $_....7.6.1.,5.0!3~5~8~ $ 2:015,588 40 $ _ _~~:::,,;;:::. - 27- CITY OF PELHAM BOARD OF EDUCATION - MITCHELL COUNTY COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BAlANCES CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 2001 REVENUES State Funds Taxes Other Funds Total Revenues EXPENPITURES Caprtal Outlay BUlldln9 and BUIlding Improvements Excess of Revenues over (under) Expendrtures OTHER FINANCING SOURCES (USES) Operatlnq Transfers In Operabng Transfers Out Total Other FinanCing Sources (Uses) Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses FUND BALANCE JULY 1 FUNp BALANCE JUNE 30 REGULAR GEORGIA STATE FINANCING AND INVESTMENT COMMISSION $ s 12,500 00 257,89749 12,37733 s s 24,877 33 257,89749 s 64,17686 $ 732,96935 $ -39,29953 $ -475,071 86 $ s 510,48634 $ s 510,48834 s 471,18681 $ 1,04302 442,922 86 442,922 86 -32,14900 32,14900 $ 472 ,229 83 $~_~_~ 00_ 0 See notes to the general-purpose finanCIal stalements - 28- EXHIBIT"J" SPECIAL PURPOSE LOCAL OPTION SALES TAX TOTALS YEAR ENDED JUNE 30, 2001 JUNE 30, 2000 $ s 589,84816 51,28545 s_--=,-,-8,-4,"1=,1=3-"3:"6:1,,,, $ 270,39749 589,84816 $ 63,66278 923,908 43 $ 592,350 15 17,81809 610,16824 s ==-",,- 000 s 797,14621 $ _ _ 44,000 00 s 841,13361 $ 126,762 22 $ _---'~5'6_6',1_6"8l~2!4- $ 953,409 20 $ $ -273,06320 -273,08320 $ -273,06320 $ s 680,34600 33,16876 -32,79376 37500 $ 368,07041 $ 807,10822 $ 566,54324 728,311 56 761,50358 194,980 34 $ s 1,096,381 97 1,568,611 80 $_~:.;:.7:,6=1;:;5,0.3::5;8;~ - 29- em OF PELHAM BOARD OF EDUCATION - MITCHELL CauNTt COMBINING BALANCE SHEET FIDUCIARY FUND TYPES JUNE 3D 2001 EXHIBIT "K" ~ Cash and Cash EqulVBionts , _ Hald byTrustea Accounts Receivable NONEXPENDABLE TRUST FUND ENDOWMENT FUND C M AND BERNICEC STRIPLING PELfiAM FFA SCHOLARSHIP TRUST FUND AGENCY FUND TOTALS JUNE 30, 2001 JUNE 30, 2000 S 4,705 00 S s 11978 s 4,82478 5,26704 20,00000 20,00000 20,00000 1,15882 1,15882 90959 Total As..ts $ 25,863 82 S 11978 $ 25,983 60 $ 26.17663 L1ABIL!IlES AND FUND EQUITY UABIL!IlES Funda Held torOthoro -FUND EQUITY Fund Bala..... For Endowment Corpus $ Unlll8Bl'V8d UndasognatBd Totll Fund Eqllty $ Total UabIIltles and Fund EqlIty $ $ 20,00000 5,863 82 $ 25,863 82 $ 25:86382 $ s 11978 11978 $ 11978 $ 000 000 $ 20,00000 $ 5,863 82 25,86382 $ 20,00000 6,056 85 26,05685 11978 $ 25[983 60 S 26.17663 sea notal to the ~ ftnanclal &tatemonts 30 CITY OF PELHAM BOARD OF EDUCATION MITCHELL COUNTY STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FIDUCIARY FUND TYPE - AGENCY FUND YEAR ENDED JUNE 30, 2001 EXHIBIT "L" REMEMBRANCE GIFT FUND ASSETS Cash and Cash Equivalents LIABILITIES Funds Held for Others BAlANCE JULY 1, 2000 ADDITIONS DEDUCTIONS BALANCE JUNE 30, 2001 $ 11978 $ 000 s 000 $ 11978 $ 11978 $ 000 s o00 $_~~~1:19:78. See noles to the genera~purpose financial S1alements - 31 - CITY OF PELfiAM BOARD OF EDUCATION MITCHELL COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30 2001 SCHEDULE "1' FUNDING AGENCY PROGRAM/GRANT AgnaJllUre. U S Department of Ch,ld Nutrlbon Cluster Pass-Through From Georgia Department 01 Educabon FOOd and Nutrition Program Food ServIces School Breakfast Progrem Nabonal School Lunch Program TOOlI Child NutnbOn Cluster Other Programs Pass-Through From Georgia Department 01 Educabon FOOd and Nutntion Program FOOd Dl$1l'1butlon Program (1) Total U S Department 01AgncuIturo Educabon. U S Department 01 SpeaaJ Educabon Clu_ P....TIYough From CleorlJa Dopa b'Mli'1 01Edueatlon IndMCIuais _ DlsabiUba. Education10d Part B Special education Flow Through PraschooI Part C - SpecIal Education SpecIal Educabon Capaaly BuIldingImprtMllllllnl Total SpecIa1 EducatIon CluotBr Other Programs DlI8Ct ImpaclAid Pass-Through From Georgia Department 01 Education Elamantary and 5econdary Education 10d TIlial Grants III Local _ , Agondao TrtIa 11 EIsenhowar Profosslonal DevoIopmart TIlIaIII TocI'noIogy LrtarecyChaI1anga FLnd Grants Tl11eVI ImovalMl Educa_ Program Strategies Class Sa8 Reduction GoeI.2000 State .nd Local education SystomrcImprovomont Grants Vocational Education 1la6lc Grants III Stal8S HI9h School Program Ba6lcGrant Pass-Through From MllchaU County Boartl of EduCatIon Elamenlllry.nd 5econdary Education 10d TIlIaI Grants III Local educational Agorde$ Total U S Department 01Educabon CFDA NUMBER PASSTHROUGH ENTITY ID NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD 10553 10555 NlA S 104.253 50 NlA 374.719n S S 47891327 S (2) 620,068 64 (3) 620.068 84 10SSO NlA 49.04982 S 528,02309 S 49.04982 669.11866 64 027 64173 64173 NlA S 151.08496 S NlA 17.426 00 NlA 3.633 00 S 172.14396 S 152,256 53 (3) 17,426 00 3.63300 173.31553 64041 39968 (4) 64010 NlA 64 281 NlA 64 318 NlA 64 298 NlA 64 340 NlA 64276 NlA 64046 NlA 179.176 99 15.392 49 125.000 00 9.18000 29.91300 92.91043 3127000 179.25173 (3) 15.392 49 125.040 61 (3) 9.164 69 (3) 29.91300 92.934 57 (3) 3129705 (3) 64010 NlA 197.371 00 S 852.757 55 S 197,37100 853,700 67 Total Fedoral Financial A6&16Ulnco NlA= Not AV8llabie 32- S 1,380.780 64 S 1.522,819 33 CITY Of PELHAM BOARD OF EDUCATION MITCHELLCOUNTY SCHEDULEOF EXPENDITURESOF FEDERAL AWARDS YEAR ENDED JUNE 30 2001 SCHEDULE .,. Notes to the SChedyle of ExPendrn.JrJls of Fedoral Awards (1I The emounts s"","", for the Food DlStributJon Program represents the F-.ally assigned value of nonmonetary Bssmlance for donatedcommodities receIVed andlOl" consumed bY the system during theo..nrent fi5Cal year (2) Expendrtures for the School Breakfast Program - e not mau"alned separately end are lIlduded In the 2001 Nabonal School Lunch Program (3) Expenditures for this program Include State. and/or Other Funds Expendrtures are not malntar.ned by fund source (4) Funds earned on this program do not require reporbng of expenchtures rl Major Program. ere identified by an astonsk In fror1t of the CFDA number no' The School D,stnel did proVode Federal Asslsla11C8 to any Subr8aplenl The aCCOiilpaii)'tng Khedme of expendItures of Federalawards tndudes \he Federalgranlactivity of the City of Pelham Board of Educabonand Is presented on the modJlied acaualOO&lsof accountmg",tudlls the 00... of accounllng used In the presentabon of the general-purposerna""al statements See notes to the general-purpose finanaaJ statemenlIl 33 CITY OF PELHAM BOARD OF EDUCATION _MITCHELL COUNTY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 2001 SCHEDULE "2" AGENCY/FUNDING GOVERNMENTAL FUNDTYPES SPECIAL CAPITAL GENERAL REVENUE PROJECTS FUND FUND FUNO TOTAL GRANTS Community Affairs Georgaa Department of Governor's Emergency Funds (1) $ 1250000 $ 12.500 00 Education Georgia Department of QualityBaSIC Educatloo DIrect lnstrucuonal Coat Kindergarten Program KUldergarten Program - Eartylntsrvenuon Program PnmaryGrades (1-3) Program PnmaryGradeS - EertyIntervenlJOn (1-3) Program Upper Elementary Grades (4-5) Program Mrddle School (6-8) Program H'llh School General Educabon (9-12) Program Vocational Laboratory (9-12) Program Student5 with DISObll1le6 Category I Category II Category III Gifted Student- Category VI Remed.ral EducatIOn Program Alternative Educatlon Program English Speakers of Other Languages IESOl) MedICI Center Program Steff end Pn>fesslonel Development Indirect Coot Categorical Grants Pupil Tranaportabon Regular Bus Replacement NUrBn19 Services Pnncpal Supplements Vocational SUpelVlSOfS Mid-termAdjustment Hold-Hermtess Education Equellzabon Funding Grant Food ServIces VocabonalEducabOn Other State Program15 AI-RilSk Summer Schoof Program Health Insurance lnnovauve Programs Mentorlng Program Preochool Handicapped Program Remedfal SummerSChool Teachers' Renremant Lottery Programs Computers In the Classroom S 315.57800 87.94700 95724900 136.12100 589912 QQ 907.41400 650.604 00 323,316 QQ 6.14400 316,12800 449.17300 92.85500 90,11800 66.989 00 19.87400 158,162 00 44.04000 1.122.moo 27.355 00 3,194 00 49.533 00 6.11100 12,095 QQ 10,560 00 1.351.88700 $ 12.466 00 2,450 60 94,241 50 5,00000 1.96285 19.481 QQ 2.61589 8.61500 50,59200 34,286 00 315.57800 87,94700 957.24900 136,121 00 589.912 QQ 90741400 650.604 00 323.31600 6.144 00 316,12800 449.773 QQ 92,85500 90.11800 66,98900 19.87400 158.762 00 44.04000 1,122.7T2 00 27.35500 3794 00 4953300 6.711 00 12.09500 1056000 1.351.68700 50.59200 12.466 00 2,450 60 94.241 50 5.000 00 1.96285 19.48100 2,61589 8.61500 34.286 00 Georgia State Fn13TlCUlQ and Investrnttnt ccmmlescn Reimbursement on Construebon Protects 251.89749 257,89749 Officeof School Readiness Pre-KJndergarten Program otrlCB of Treasuryend Fiscalseveee Pubuc School EmplOyeeS Retll'ement 221,577 62 1287000 221.577 62 12,87000 34- CITY OF PELHAM BOARD OF EDUCATION. MITCHELL COUNTY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 3D 2001 SCHEDULE "2" AGENCYIFUNDING CONTRACTS Education. GeorgIa Department of Georg.... Readmg Challenge Reading Firat Program GOVERNMENTAL FUND TYPES SPECIAL CAPITAL GENERAL REVENUE PROJECTS FUND FUND FUND TOTAL $ 21.03300 23.93700 $ 21.033 00 23.93700 s S 8,002[00364 S 306,45562 S 270.39749 8[578.856 75 (1) Tho purpooo of tho funds Is for tho Polhom High S<:hooIIPolham CIty Middle School to resurface the tennls courts see notes to the general-purpose finallCJal statements - 35- CITY OF PELHAM BOARD OF EDUCATION - MITCHELL COUNTY SCHEDULE OF APPROYED LOCAL OPTION SALES TAX PROJECTS YEAR ENDED JUNE 30 2001 SCHEDULE "3" PROJECTS The repayment of pnnClpal and , Intereston outstanding Cityof Perham General Obhgabon Bonds, series 1993, coming due on February 1, 1998 and semaannually thereafter as set forth In Exhibit "B" attached hereto and, by this reference thereto, Incorporated herein, the maXImum amount of debt to be reured not to exceed 51,612,300 00 The acquisition, construcaon and eqUipping of capital outtay prtlJects for the Pelham School System consisting of a new pre.kJndergarten bUildIng on the campus of the Pelham Elementary School and addltlons, expansions. Improvements, renovabons, modfficatlons and eqUipping of exlstlng schoollaClhtles of the Pelham School System, In an amount no1to exceed $2,121,273 00 ORIGINAL ESTIMATED COST (1) CURRENT ESTIMATED COSTS (2) AMOUNT EXPENDED IN CURRENT YEAR (3) AMOUNT EXPENDED IN PRIOR YEARS (3) PROJECT STATUS $ 1,612,30000 $ 1,612,30000 $ 146,135 90 $ 440,11394 Ongomg 2,121,27300 2.121,27300 732,969 35 648,066 68 Ongomg (1) The School Dlslrtcfs 01191031 cost _mate as speclfIed In 1l1e rasoIubon calling tor 1l1e Imposition 0I1l1e Local Opbon Sales Tax (2) The School Dlslrtcfs current estimate 01to1aI cost tor the projects Indudes all cost from project Inceptlon to complebon (3) The voters of City of Pelham approved 1l1e Imposlbon 01a 1% sales tax to fimd!he above projects Amounts expended ler these projects may Indude sales tax proceeds, state, local property texes and/or other Iunds over !he life of the P'O!ects See notes to the general-purpose ftnanaal statements - 37. CITY OF PELHAM BOARD Of EDUCATION ~ MITCHELL COUNTY GENERAL FUNQ - QUALID' BASIC EDUCATION PROGRAM (aBE) ALLOTMENTS AND EXPENDITURES. BY PROGRAM YEAR ENDED JUNE 30 2001 SCHEDULE -4- DESCRIPTION DirectInstrucuonal Programs Kindergarten Program Kindergarten Program-Earty Intervention Program Pnmary Grades (1-3) Program Pnmary Grades-Earty Intervention (1-3) Program Upper Elementary areeee (4-5) Program Middle School (6-8) Program H,gh SChool General Education (9-12) Program vocanorer Laboratory (9-12) Program Students 'MIh DlSablhtles Category II Calegory III GIfted Student - category VI Remedial Education Program Attematlve EducabOn Program En9USh Speek8!1l of Qlher Languages IESOL) TOTAL DIRECT INSTRUCTIONAL PROGRAMS Media GenterProgram Stan and ProfesaionBl Development ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) ELIGIBLE aBE PROGRAM COSTS SALARIES OPERATIONS TOTAL $ s s 32160000 314.471 35 s 6.76237 321.233 72 89.62500 128.88385 50233 12938618 97551500 986 440 72 2271529 1.009156 01 138.71800 149.91321 66977 150.562 98 601.16900 564,132 72 25.88109 59001381 924.729 00 1,121.27628 1800203 1.139.27831 663.01900 866.526 86 40,D8628 906,61314 329.486 00 306,78864 103.70501 410.49365 786.77700 461.37802 9.73286 471.11088 263.26218 9.492 19 272.75407 94.62700 44,450 80 5.97006 50 420 86 91.838 00 114,41386 1.677 59 116.09145 68.26700 103871 01 40594 104.27695 20.253 00 13.799 15 22879 14.02794 $ s 5.105.623 00 $ 5.439.808 65 245.831 60 S 5.685.440.25 181,791 00 44.88000 156.53757 5,63149 31.62721 39.28717 188.364 78 44.91866 TOTAL aBE FORMULA FUNDS $ s 5,312.294 00 $ 5,601,m 71 316,94598 $ 5.91872369 (1) Comprilled of State Funds plus Local FIve Mil Shara See notes to the genetal-purposefmancial statementa - 38 CITY OF PELHAM BOARD OF EDUCATION MITCHELL COUNTY GENERAL FUND QUALITY BASIC EDUCATION PROGRAM laBEl ALLOTMENTS AND EXPENDITURES BY SITE YEAR ENDED JUNE 30 2001 SCHEDULE "5" Pelham High School Pelham City Middle School Pelham Elementary School Central Office (Alternative Educabon Program) TOTAL (1) Cornpnsed of State Funds plus Local FIVe MlII Share ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) ELIGIBLE QBE PROGRAM COSTS $ s 1.264.096 00 1,564,553 58 1,218,351 00 1,326.030 08 2,554,909 00 2.690,560 72 68,26700 104,29587 $ 5,105,623 00 $~....;;=5;;,,6:8,;5",,4;4;;0;.2;5;= See notes to the genera~purpose financial statements - 39 SECTION II COMPLIANCE AND INfERNAL CONlROL REPORTS RU'>.\EII W. H"",,, sr ...re A.UD\iO~ r4Q.l) 656-21;'': DEPARTMENT OF AUDITS AND ACCOUNTS 254 W.t...hmgton Street. S Vi suue ; 14 Atlanta, Georg ra 30334-8400 March 13, 2002 Honorable Roy E Barnes, Governor Members of the General Assembly Members of the State Board of Education and Supenntendent and Members of the City of Pelham Board of'Education REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE~HGOVERNMENTAUDnITNGSTANDARDS Ladles and Gentlemen: We have audited the financial statements ofCity ofPelham Board ofEducation as ofand for the year ended June 30, 2001, and have ISSUed our report thereon dated March 13,2002 This report was quahfied for VarIOUS departures from generally accepted accounting pnnciples, as rdentified In the auditor's report on the general-purpose financial statements We conducted our audit In accordance WIth audrtmg standards generally accepted In the Uruted States of America and the standards apphcable to financial audits contained In Government AuditIng Standards, ISSUed by the Comptroller General of the Uruted States Comphance As part of obtammg reasonable assurance about whether City of Pelham Board of Education's financial statements are free ofmatenal misstatement, we performed tests of Its comphance WIth certain provisions oflaws, regulations, contracts and grants, noncomphance With winch could have a direct and matenal effect on the determmanon of financial statement amounts However, providmg an oprruon on comphance WIth those provrsions was not an objective of our audit, and accordingly, we do not express such an opinion The results ofour tests disclosed no Instances ofnoncomphance that are required to be reported under Goverrunent AuditIng Standards Internal Control Over FInanCIal Reporting In planrung and performmg our audit, we considered CIty of Pelham Board of Education's Internal control over financial reporting In order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the Internal 2001YB-40 control over financial reportmg However, we noted a certam matter mvolvmg the mternal control over financial reportmg and Its operation that we consider to be a reportable condiuon Reportable conditions involve matters commg to our attention relatmg to Significant deficiencies m the design or operation ofthe mternal control over financial reportIng that, m our Judgment, could adversely affect City of Pelham Board of Education's ability to record, process, summanze and report financial data consistent with assertions of management in the financial statements The reportable condition IS descnbed m the accompanymg Schedule ofFmdmgs and Questioned Costs as Item FS- 7841-01-01 A matenal weakness IS a condmon m wluch the design or operation of one or more of the mtemal control components does not reduce to a relatively low level the nsk that misstatements in amounts that would be matenal m relation to the financial statements being audited may occur and not be detected withm a timely penod by employees m the normal course of performmg their assigned functions Our consideration of the mternal control over financial repornng would not necessanly disclose all matters m the internal control that might be reportable condinons and, accordingly, would not necessanly disclose all reportable conditrons that are also considered to be matenal weaknesses However, the reportable condmon descnbed above IS considered to be a matenal weakness This report IS intended solely for the mformation and use ofthe management, members ofthe City of Pelham Board ofEducation, Federal awarding agencies and pass-through entities and IS not intended to be and shouJd not be used by anyone other than these specified parties RespectfulIy submitted, ~~elI..WcHinQton Q.W.~ State Auditor RWHgp 200 IYB-40 RII..." .. II \\1. Hrs ro"'ll STATE A.UDITor 'ACA; 656-2 .."" DEPARTMENT OF AUDITS AND ACCOUNTS 21)4 Wachmgton SlrCC[ S W SUlte:!.4 AII"",a, Georgia 10314K400 March 13, 2002 Honorable Roy E Barnes, Governor Members of the General Assembly Members of the State Board of Education and Supenntendent and Members of the City of Pelham Board of Education REPORT ON COMPLIANCE WITH REOUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 Ladles and Gentlemen Compliance We have audited the compliance ofCity ofPelham Board ofEducanon WIth the types ofcompliance requirements descnbed In the US Office of Management 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 of Pelham Board of Education's major Federal programs are Identified In the Summary of Audnor'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 Pelham Board of Education's management Our responsrbihty IS to express an oprmon on City of Pelham Board of Education's compliance based on our audit We conducted our audit of compliance In accordance With auditing standards generally accepted In the Uruted States ofAmenca, the standards applicable to financial audits contained In Government Auditing Standards, ISSUed by the Comptroller General of the Umted States, and OMB Circular A133, Audas of States, Local Governments. and Non-Profit Orgamzattons 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 matenal effect on a major Federal program occurred An audit Includes exammmg, on a test basis, evidence about the City of Pelham Board of Education's compliance With those requirements and performmg such other procedures as we considered necessary In the circumstances We believe that our audit provides a reasonable basis for our opmron Our audit does not provide a legal deterrmnation on City of Pelham Board of Education's compliance With those requirements 2001SA-10 In our oprruon, the City of Pelham Board of Education complied, m all matenal respects, with the requirements referred to above that are applicable to each of ItS major Federal programs for the year ended June 3D, 2001 Internal Control Over Comphance The management of City of Pelham Board of Education IS responsible for estabhshmg and mamtammg effective mternal control over compliance With requirements of laws, regulations, contracts and grants applicable to Federal programs In plannmg and performing our audit, we considered City ofPelham Board of Educatron's mternal control over compliance WIthrequirements that could have a direct and matenal effect on a major Federal program m order to determme our auditing procedures for the purpose of expressmg our opimon on compliance and to test and report on mternal control over compliance m accordance With OMB Circular A- I33 Our consideranon ofthe internal control over compliance would not necessanly disclose all matters m the mternal control that might be matenal weaknesses A matenal weakness IS a condition m which the design or operation of one or more of the mternal control components does not reduce to a relatively low level of nsk that noncompliance With applicable requirements oflaws, regulations, contracts and grants that would be matenalrn relanon to a major Federal program bemg audited may occur and not be detected withm a timely penod by employees m the normal course of performing their assigned functions We noted no matters mvolvmg the internal control over compliance and Its operation that we consider to be matenal weaknesses Tins report IS mtended solely for the mformatron and use of the management, members ofthe CIty of Pelham Board ofEducanon, Federal awarding agencies and pass-through entines and IS not mtended to be and should not be used by anyone other than these specified parties. Respectfully submitted, - - ~~~~ ..... Rus II W. Hinton State Auditor RWH:gp 200ISA-IO SECTION ill AUDITEE'S RESPONSE TO PRJOR YEAR FINDINGS AND QUESTIONED COSTS CITY OF PELHAM BOARD OF EDUCATION - MITCHELL COUNTY AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 2001 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS FS-7841-98-01 FS- 7841-99-0 I FS-7841-00-0 I FS-7841-00-02 Further Action Not Warranted Further Action Not Warranted Previously Reported Corrective Action Implemented Unresolved - See Corrective Action/Responses CORRECIlVE ACflONIRESPONSES GENERAL FIXED ASSETS Failure to Mamtam General FIxed Assets Account Group Findmg Control Number' FS-7841-00-02 Due to current staffing lnmtanons and budgetary considerations prolnbitmg the lunng of additional adrmmstrative staff, the School District has decided not to pursue the recording of general fixed assets on the financial statements SECl10NN FINDINGS AND QUESTIONED COSTS CITY OF PELHAM BOARD OF EDUCATION - MITCHELL COUNTY SCHEDULE OF FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 2001 I SUMMARY OF AUDITOR'S RESULTS I Type of Report Issued on the Fmanclal Statements The auditor's opmion on the CIty of Pelham Board of Education's financial statements was quahfied for vanous departures from generally accepted accountmg principles 2 Reportable CondItions m Internal Control DIsclosed by the AudIt of the Fmanclal Statements The audit report for the CIty of Pelham Board of Education disclosed a financial statement reportable condmon related to the followmg control category General FIxed Assets The reportable condinon descnbed above IS considered to be a matenal weakness 3 Noncomphance Matena] to the FmancIaI Statements The audit ofthe CIty ofPelham Board of'Educanon disclosed no instances ofnoncomphance that were deemed to be material to the financial statements. 4 Reportable CondItions m Internal Control Over MaJOr Programs The audit report for the CIty of Pelham Board of'Educanon did not disclose any reportable condItIons m internal control over major programs 5 Type of Report Issued on Comphance for MaJor Programs The auditor's opmion on the CIty ofPelham Board ofEducation's report on comphance WIth requirements apphcable to major programs was unqualified. 6 AudIt Fmdmgs RequIred to be Reported by SectIon .51Q(a) of OMB CIrcular A-133 The CIty ofPelham Board ofEducation's audit did not disclose audit findings required to be reported by section 5IO(a) ofOMB Circular A-133. 7 MaJOr Programs Federal awards audited as major programs are as follows' 10.553 Food and Nutnuon Program - Food Services - School Breakfast Program 10 555 Food and Nutntion Program - Food Services - National School Lunch Program 8 Type nAn Program Dollar Threshold The dollar threshold for type nAn programs was $300,000.00 9 Low RIsk Audltee The CIty of Pelham Board of Education qualified as a low nsk auditee based on a waiver granted by the U S Department of Educanon -I - CITY OF PELHAM BOARD OF EDUCATION - MITCHELL COUNTY SCHEDULE OF FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 2001 II FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Matenal Weakness Repeated From Pnor Year Finding Control Number FS-7841-01-0I The City of Pelham Board of Education did not mamtam a system-wide General Fixed Assets Account Group WIthin the formal accounting records as required by generally accepted accounting principles This condiuon results In the general-purpose financial statements ofthe School Distnct being Incomplete and not In accordance Withgenerally accepted accountmg principles Appropnate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group These subsidiary records should Include an Inventory of land, buildings and equipment owned by the School Distnct and should Include, but may not be limned to, date acquired, acquisinon cost, estimated replacement cost, locanon and descnption. Detailed records should be maintained ofall addrtions and deletions to the General Fixed Assets Account Group ill FEDERAL AWARD FINDINGS AND OUESTIONED COSTS No matters were reported -2-