City of Pelham Board of Education, Mitchell County, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2002

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CITY OF PELHAM ,SOARD OF EDUCATION '"

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FISCAL

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YEAR

ENDED '.JUNE 30, 2002 '
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cm" OF PELHAM BOARD OF EDUCATION MITCHELL COU1'.'TY

-TABLE OF CONTENTS-

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATIONSCHEDULE 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 ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

7

D

STATEMENT OF REVENUES, EXPENSES AND

CHANGES IN FUND BALANCES

FIDUCIARY FUND 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

11

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 PROJECTS 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

cm" OF PELHAM BOARD OF EDUCATION - MITCHELL COUNTY
- TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDmONAL FINANCIAL INFORMATION

SCHEDULES

I SCHEDULE OF EXPENDfTIJRES OF FEDERAL AWARDS

32

2 SCHEDULE OF STATE REVENUE

34

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

35

ALLOTMENTS AND EXPENDfTIJRES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

36

5

BY SITE

37

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 AUDmNG STANDARPS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133

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

SECTIONN FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

Rl/'i.~"ll W. HIr>-rOi'o
STATE AUDITOR
(404l~2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washrngton Street, S W Suuc 214 Atlant Gcorgra 30334-8400
February 7, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Supenntendent and Members of the City ofPelbam Board ofEducanon
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 accompanymg general-purpose financial statements of the City of Pelbam Board of Education, as of and for the year ended June 30, 2002, as hsted in the table of contents These general-purpose financial statements are the responsibility of the City of Pe1bam Board of Education's management. Our responsibility IS to express an opmion on these general-purpose financial statements based on our audit
We conducted our audit m accordance With auditmg standards generally accepted m the United States ofAmenca and the standards apphcable to financial audits contained m Government AuditIng Standards, ISSUed by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmatenal misstatement. An audit includes exammmg, on a test basis, evidence supporting the amounts and disclosures in the financial statements An audit also mcludes assessmg the accountmg pnnciples used and sigruficant estimates made by management, as well as evaluatmg the overall financial statement presentation. We beheve that our audit provides a reasonable basis for our opinion
As descnbed m the notes to the general-purpose financial statements, the Board of Education's financial statements have been prepared using certain accounting practices and policies which, m our opuuon, vary m some respects from generally accepted accountmg pnnciples These vanances are descnbed as follows:

2002ARL-13

The general-purpose financial statements of the Board of Education did not contam a General Fixed Assets Account Group to account for property and equipment owned by the Board of Educallon which should be Included to conform to generally accepted accountmg pnncrples

School activity accounts maintained at the individual schools are not Included In the general-purpose financial statements To conform to generally accepted accountmg pnnciples, these accounts should be Included In the general-purpose financial statements

The Board of Education did not recogrnze as expenditures, In the year ended June 30, 2002, a portion of salanes and the corresponding employer's cost of related benefits earned for contractual services completed pnor to June 30, 2002 Also funds received, subsequent to June 30, 2002, 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 sirmlar expenditures and related revenues for contractual services completed pnor to June 30, 2001, were Improperly
recorded in the year ended June 30, 2002 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 vanances or omissions have not been determmed, but are beheved to be matenal.

In our OpInIOn, except for the effects on the general-purpose financial statements of the matters referred to In the preceding paragraph, the general-purpose financial statements referred to above present fairly, In all matenal respects, the financial position of the CIty of Pelham Board of Education as of June 30, 2002, and the results of Its operatIons and the cash flows of ItS nonexpendable trust fund for the year then ended, In conformity WIth accountIng prmciples generally accepted m the Uruted States of America,

In accordance WIth Government AuditIng Standards, we have also ISSUed our report dated February

7, 2003, on our consideration of the CIty of Pelham Board of Education's mternal control over

financial reportmg and our tests of Its comphance WIth certam provisions of laws, regulations,

contracts and grants That report IS an mtegral part of an audit performed In accordance WIth

Government AudIting Standards and should be read in conjunction WIth this report in considering the

results of our audit.



Our audit was performed for the purpose of forrmng an opimon on the general-purpose financial statements of the City of Pelham Board of Educanon taken as a whole The accompanymg combmmg and mdrvidual fund statements (Exhibits G through L) and the financial schedules (Schedules I through 5), which Includes the Schedule ofExpenditures ofFederal Awards as required by U S Office of Management and Budget Circular A-133, Audits ofStates. Local Governments. and Non-Profit Organtzanons, are presented for purposes of additional analysis and are not a required part ofthe general-purpose financial statements Such mformatIon has been subjected to the

2002ARL-13

auditmg procedures applied In the audit of the general-purpose financial statements and In our opiruon, 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 oftins report has been filed as a permanent record In the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24
Respectfully submitted,
~~~~ Russell W. HInton State Auditor RWH:as 2002ARL-13


CTIY OF PELHAM BOARD OF EDUCATION - MITCHELL COUNTY

CITY OF PELHAM BOARR OF epUCATION - MITCHELL COUNTy COMBINEQ BAlANCE SHEET ALL FUNQ TYPES JUNE 3Q 2002

Cash and cash EqUivalents Investments Accounts ReceIVable Prepaid Items Inventories
Food Donated Commodities Pun:hased Food
Total Aa88ts

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

S

884.93248 S 1286497Q S 1.744.58906

1.227.000 00

112.19379

255.93777

125.74749

32.536 22

12.286 14 2.783 34

$ 2.256:662<49 $ 399,655 95 S 1,870,336 55

LIAILmES AND FUND EQUITY
LIABILITIES
Accounts Payable SaIanee Payable Contraeta Payable Ratalnagoa Payable Deferred Revenue Funds Hold for Others
TotalLJabilltlas
FUNQEQUITY
Fund Balances Reaarved For Bus Beplacement Funds For Endowment Corpus For Inventories Food
Pro_ Donated Commodities
Purchased Food For SPLOST lhYeIerved Dealgnatad fer 5a~~nsurance Undealgnalad
Total Fund Equity
Total Llabllrtlas and FU1d Equity

S

2.31517 S

53.77866

3.905 91

12Q.932 Q1

S

134.884 40

25.571 50

S

8.221 08 S 174.71Q 87 S

180.22590

S

8.81400

S
184.58844 2.087,258 97
S 2.250.44141 S

12,286 14 2.783 34
S

919.40242

209.8788Q
224._28 S

790.708 23 1.71Q.11Q 85

$ 2,256,662 <49 $ 399.858 95 S 1,870:336 55

The notesto the genen!ll-purpoae ftnBnclaI statements are an rrtegral part of thla atatl!!lment -2-

EXHIBIT "A"

DEBT SERVICE
FUND

FIDUCIARY FUND TYPES TRUST AND AGENCY FUNDS

TOTAlS
(Memorandum amy>

JUNE 30, 2002

JUNE 30, 2001

$

000 $

711378 $ 2,765,28502 $ 2.159.304609

20.000 00

1.247,000 00

1.817.000 00

1,783 01

495.68206

81084428

32.538.22

35.811 00

12.288 14 2,783 304

12455 70 2,760 03

$

000 $

28,898 79 $ 4.555:55278 $

$

58.09383 $

45.31383

124.83792

120.37608

1304.654 40

381,44340

25.571 50

65.533 20

3184

$

1304 78

1304 78

11978

$

1304 78 $

3041,292 43 $

812,817 93

$

6.61400

$

20,000 00

20.00000 $

20,000 00

12.28814 2783304
919.402 42

12,45570 2,760 03
1.098.381 97

154.!588 44

140.427 15

$

000

8.762 01

3,0ll6.606 01

2,753.174 32

$

000 $

28,76201 $ 4,214,260 35 $ 4,025,199 17

$

000 $

28,896 79 $ 4,555,!5S2 78 $ 4,638[017 10

-3-

CITY Of pELHAM BOARD Of EDUCATION - MITCHELL COUNTY
COMBINEO STATEMENT OF REVENUES EXPEND'TURES ANO CHANGES IN FUNO BAlANCES ALL GO\IERNMENTAL FUND TYpES YEAR ENDED JUNE 30 2002

REVENUES
State Funds Federal Funds Taxe. Other Fund.
Total Revenues
EXpENDITURES
Gunent InstructIOn Support serveee PupU 5e1VlC8S Improvement of Instructlonal SeNtC89
Educabonal Mecha 8eMcea
General Admmlslnltlon Sd100IAdminIStration BusIness Ad~n Ma,ntenance and QperatJon of Plant StUdent Transportabon 5ervloos
Conlnll Support Servlces Other Support 5eN":'"
Food 5erv1C88 QpeTllllon Community 5eMCllll OpeT1lbonS Copltol Outlay Debt 5eIVlCB Prtndpal Interest Paying Agent Fees
Total EJcpenddu.....
Excess of Revenues over (undert EJcpendrtures
OTHER FINANCING SOURCES (USES)
0p0TlItmg Trans",", In 0pera1mg Transfers OUt
Total Other Rnanang Sources (Use.)
Excess of Revenues and Other Flnanang Sources over (under) ExpendItures and other Financing Uoea
fUND BALANCE JULY 1
eomm_ Food IlMlIltOl'( - Net ChangoIn Period Doneled _Food
FUND BALANCE JUNE 3Q

GENERAL FUND

SPECIAL REVENUE
FUND

$ 8,870,54342 $

368,29819

844849

1 390,186 60

602,62538

107,42915

110,13573

$ 9,589,046 44 $ , ,868,620 52

$ 6354,120 54 $
237,24593 209,232 03 215,88934 154,06735 637,47559 182,87038 671,11422
33,28161 53,02960 14,27000

930,28134 43,11012 85,92512 82,530 78
15,26169
2745086 653,094 72

$ 8,762,596 59 $ 1,837,654 63

$

826,44985 $

30,96589

$

$

-813,28113

$

-813,281 13 $

67578 67578

$

13,166 72 $

2,237.27269

31,64167 193,4!50 86

-16956 23 31

$ 2,250,441 41 $ _....:~.:;::~:.

Tho note. to !he goneral-ptnpose finencIaJ stetsments 8T1I en Inlegrol part of this sletement
-4-

EXHIBIT 'B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS (Memorandum Ontyl
YEAR ENDED JUNE 30, 2002 JUNE 30, 2001

$

168 832 51

$ 9,407.67412 $ 8,57885675

1,398,63509

1,380,780 64

569,103 91 $

147,19340

1,318,92269

1.314,34854

26,870n

244,43565

345,35797

$

764,80719 $

147,19340 $ 12,369,66755 $ 11,619,34390

$ 1,435,91369 $
$ 1,435,91389 $ S -671,108 50 S

$ 7,284.401 88 $ 6,924,03532

280,356 05 295,15715 215,88934 236,59813 637,47559 182,87038 686,37591 33,28161 53,02960 41,720 86
n 653,094
1,435.91369

233,28867 232,01685 195 502 48 243591 76 586 019 00 131,880 32 561,39326 84,37298 53,30660 33,31584 669,11866
17,87551 797,45140

100,000 00 48,44250
75090

100,00000 48,44250
750 90

95.000 00 50.385 00
75090

147,19340 S 12,183,358 31 S 10,929,284 55

000 S

186,309 24 S

690,05935

S

812,605 35

S

812,60535

S

141,498 85 S

1.568,611 80

$

813,28113 S

683,04727

-813,28113

-683,04727

$

000 S

000

000 $ 000

186,309 24 S 3,999,335 35

690,08935 3,300,517 79

-18956 2331

8,59770 18051

s 1,710,11065 S

....;O~OO::.. S 4,185,49834 S 3,999,33535

-5-

CITY OF PELHAM BOARD OF EDUCATION MITCHELL COUNTY COMBINER STATEMENT OF RElIENUES EXPENDITURES AND CHANGES IN FUNR BALANCES
BUDGET AND ACTUAL (NDNGAAP BASIS)
GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30 2002

EXHIBIT "C.

GENERAL FUND

BUDGET

ACTUAL

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 8,86532400 $ 8870,54342

8,404349

484 000 00

802,62538

14,00000

107,42915

Total Revenues

$ 9,383,32400 $ 9,589,046 44

EXPENDITlJRES

Current InstruClJOn Support SeMCM Pupil SeMC8& Improvement of InstnJdional SaMoaS Educational Mecha Servlces GeneralAdrmmstratlcn School Admltustratfon Business Administration Maintenance and Operation of Plant Student Transportation serwcee Central Support services Other Support Services Food SaNa! Operabon Community Services Operatkms

$ 7,311,82300 $ 6,354,120 54

270,230 00 299,98700 217,33000 190,82000 721,57800 228205 00 8298noo
4853500 71,540 00 12,30000

237,24593 209,232 03 215,88934 154,06735 837,47559 182,87038 871,11422
33,28161 53,02980 14,27000

21,000 00

Total ExpenclLtures

$ 10,323,02500 $ 8,762,598 59

Excess of Revenues over (under) Expenditures

$ -959,701 00 $ 828,44985

OTHER FINANCING SOURCES (USES)

Other Sources Other Uses

$ -813,281 13

Total Other FinanCing Sources (Ules)

$ -813281 13

Excess of Revenues and Other FInancing Sources

over (under) Expenditures and Other Financing

uses

$

-959,701 00 $

13,186 72

FUNp BALANCE JULY 1 2001

2,038,064 28

2,237,272 89

Adjustments
Food Inventory - Net Change In PerIod
Donated Commod_
Purchesed Food

002

fUND BAlANCE JUNE 30 2002

S '.078:363 28 S 2,250, .... ' 4'

SPECIAL REVENUE FUND

BUDGET

ACT!JAL

5 313,38700 $ 388,298 19

1 355,27600

1,390,18680

111,44500

110,13573

$ 1,780,108 00 $ 1,868,820 52

$ 828,05900 $ 930,281 34

50,303 00 98,9nOO

43,11012 85,92512

5834200

82 530 78

9,75000

15,28169

28,84100 70583600

27,450 86 853,094 72

$ 1,780,108 00 $ 1,837,654 63

$

000 $

30,985 89

$

87578

$

67578

$

000 $

31,84187

193 482 44

193,450 86

-1,483 70

-18958 2331

S 192.01874 S 224,904628

The notesto the general-purpose ftnanc:lal statements are an Integral pari of this statemenl -7-

CITY OF PELHAM BOARD OF EDUCATION - MITCHELL COUNTY STATEMENT OF REVENUES EXPENSES AND CHANGES IN FUND BALANCES
FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND YEAR ENDED JUNE 30, 2002

EXHIBIT "D"

OPERATING REVENUES Donations Other Funds Total Operabng Revenues
OPERATING EXPENSES Current Support SeMces Other Support SeMC8s Operating Income
NONOPERATING REVENUES Interest Earned 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, 2002

JUNE 30, 2001

$

1,000 00 $

1,00753

S

2,00753 $

1,00000 $ 1,00753
2,00753 $

1,000 00 1,000 00

$

000 $

000 $

2,44500

$

2,00753 $

2,00753 $

-1,44500

89066

89066

1,251 97

$

2,898 19 $

2,898 19 $

-19303

25,86382

25,88382

26,056 85

$

28?6201 $

28?62 01 $ _.....2~ 5,8~ 638~ 2

The notes to the genera~purpose finanoal statements are an Integral part of thiS statement -8-

CITY OF PELHAM BOARD OF EDUCATION - MITCHELL COUNTY STATEMENT OF CASH FLOWS
FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND YEAR ENDED JUNE 30, 2002

EXHIBIT "E"

Cash Flows from Opera1mg Aenvmes Cash Received from Donations Cash Paid for Scholarships
Net Cash Provided (Used) by Opera1tng ActMlJes
Cash Flows from Invesbng ActJVrt,es
Interes1 Received on Investments
Net Cash Provided (Used) by Invesbng AclJvitJes
Net Increase (Decrease) In Cash
Cash and Cash EqUivalents - July 1
Cash and Cash EquNalems - June 30

C M AND BERNICEC STRIPLING PELHAM FFA SCHOLARSHIP TRUST FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$

1,00000 S

1,000 00 $

1,00000

-2,44500

S

1,000 00 $

1,000 00 $

-1,44500

$

1,27400 $

1,27400 $

1,00274

S

1,27400 $

1,27400 $

1,00274

S

2,27400 S

2,27400 S

-44226

4,705 00

4,70500

5,14726

s

6 ,979 00 S _ _..4;,:7.~0.5:0::0:.

ReconCIliation of Operetlng Income to Net Cash Provtded (Used) by Opera1tng ActNrtles Operabng Income (loss) Increase m Accounts Receivable

s

2,00753 S

2,00753 $

1,44500

-1,00753

1 ,00753

Net Cash Provided (Used) by Opera1ing ActlVJbes

s

1,000 00 S

1,000 00 $ _ _..;.:.~;:.:;:::..

The notes to the genera~purpose finanClel statemems are an ,megral part of this statement -9-

CITY OF PELHAM BOARD OF EDUCAnON - MITCHELL COUNn' EXHffiIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30. 2002
Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The CIty ofPelham Board of Education (School DIStnCt) was estabhshed under the laws ofthe 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 DIStnCt IS orgaruzed 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 orgaruzations that compose Its legal entity.
FUND ACCOUNTING
The School Distnct uses funds to report on ItS financial posmon and the results of Its operations Fund accounting IS designed to demonstrate legal comphance and to aid financial management by segregatmg transactions related to certain governmental functions or acnvines 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 DIStnCt To conform to generally accepted accounting principles, a General FIXedAssets Account Group should be mamtamed for reportmg the cost of assets acquired by governmental fund types
Although "school activrty accounts" are mamtamed at the individual schools, neither the assets, habrhnes and fund equrty, 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 compliance With generally accepted accounting principles apphcable to governmental units, 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 the School DIStnCt'S educational activtties Governmental Fund Types include-
GENERAL FUND - the fund used to account for all financial resources of the School DIStnCt 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
- 11 -

CITY OF PELHAM BOARD OF EDUCAnON - MITCHELL COUNTY EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30, 2002
Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facihties
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 Obhgation School Bonds, Senes 1993
FIDUCIARY FUND TYPES - the funds used to account for assets held by a government unit m a trustee capacity or as an agent for individuals, pnvate orgamzanons, 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 most outstanding graduating student in the Agncultural Education (Future Farmers of Amenca) Program at Pelham High School
AGENCY FUND - the funds used to account for assets held in a fiduciary capacity for other funds, governments, or mdividuals
BASIS OF ACCOUNTING
The accountmg and financial reportIng treatment applied to a fund IS detennmed by Its measurement focus AJI governmental funds are accounted for usmg a current financial resources measurement focus WIth tlus measurement focus, only current assets and current hahilines generally are mcluded on the balance sheet Operating statements of these funds present increases (i.e., revenues and other financmg sources) and decreases (i.e., expenditures and other financing uses) in net current assets Their reported fund balance IS considered a measure of available spendable resources
Lrabihties which are expected to be financed from available spendable resources are reported as habrhties 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 habilrties associated WIth the operation ofthese funds are included on the balance sheet. Operatmg statements present increases (e.g, revenues) and decreases (e g , expenses) in net totaJ assets
Agency funds are purely custodial in nature and do not mvolve measurement ofresults ofoperations
Governmental funds are accounted for using the modified accrual basis ofaccountmg under which:
- 12 -

CITY OF PELHAM BOARDOF EDUCATION - MITCHELL CQUNTY EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30, 2002
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reveuues are recognizedw hen susceptible to accrual (I e., whenthey become both measurableand available) "Measurable" means the amount of the transaction can be determmed and "available" means collectible withm the current penod or soon enoughthereafterto be used to pay habilmes of the current period The SchoolDismct considers receivables collectedwnhm SIXty days after yearend to be available Property taxes, sales taxes and Interest are considered to be susceptible to accrual Nonexchange transactions, In which the School Distnct gives (or receives) value WIthout directly receiving (or grvmgj equal value In exchange, Include property taxes, local option sales taxes, intergovernmental grants and donations Revenue forpropertytaxesIS recogruzed Inthe fiscal year for which the taxes are levied Revenue from sales taxes IS recogmzed in the fiscal year the resourcesare receivedor susceptibleto accrual Revenue from grants anddonations IS recogruzed In the fiscal year in which all elrgibthty requirements have been satisfied.
Expenditures are generallyrecognized when the related fund habihty IS incurred.
A departure from the above defimtrons IS the accounting treatmentaffordedthe final two payments on General Fund teachers' and bus drivers'contracts,and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 2002, a substantial number ofpersonnelofthe SchoolDistnct were employed for a one hundredand rnnety day penod begmrung In August 2001 and ending In early June 2002 Personnelcontracts for this employmentpenod specifythat compensation be paid m twelveequalmonthlypayments begmrung in September 2001 and endmg In August 2002. 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, 2002, compensation under these employment contracts had been earned, but two of the twelve monthlypayments, due for July and August2002, had not been made. Payments for these two months were made and recorded as expenditures by the School Distnct subsequentto June 30,2002 Also,the State'sportionof the compensationpaid m July and August 2002 was received and recorded as revenue In the fiscal year subsequent to June 30, 2002. Conversely, the Similar expenditures and related revenues forcontractual services completed prior to June 30, 2001, were recorded m the year ended June 30, 2002 Generally accepted accounting pnncrples requirethat revenuesbe recordedwhenavailable andmeasurable and thatexpenditures be recorded when incurred. rather than when funds are received or disbursed
The accrual basis ofaccounting, as required by generally accepted accounting principles,IS utihzed by nonexpendabletrust funds. Under the accrual basis of accounting, revenuesare recorded when earned and expenses are recorded at the time habihnes are incurred.
Agency funds are accounted for usingthe modified accrual basts ofaccounnng m recogmzmg assets and liabihtres
- 13 -

I I I I I
I I I I I
I I I I I
I I I I I
I I I I I
I I I

CITY OF PELHAM BOARD OF EDUCAnON - MITCHELL COUNTY EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30. 2002
Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUDGET
The City ofPelham Board ofEducauon's budget IS a complete financial plan for the School District's fiscal year and IS based upon esl1mates of expenditures together WIth probable funding sources There IS no stalutory prohibinon regarding overexpenditure of the budget at any level The budget for all governmental funds IS prepared by fund, function and object The legal level of budget control was established by the Board at the aggregate level The budget for governmental funds was prepared on a basis other than generally accepted accountmg pnnciples
The budget process begms when the School District's admuustranon prepares a tentative budget for the Board's approval After approval oftJus tentative budget by the Board, such budget IS advertised at least once In a newspaper of general circulation In the locality At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revrsions as necessary and adopts a final school budget TIus final budget IS then submitted, In accordance WIth provisions of the Quality Basic Education Act, OCGA Section 20-2-167(c), to the Georgia Department of Education. The Board may Increase or decrease the budget at any tune dunng the year AU 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 maturities of three months or less from the date of acquisinon In authonzed financial mstrtuuons, Georgia Laws OCGA 45-8-14 authonze the School Distnct to deposit ItSfunds In one or more solvent banks or msured Federal savings and loan associanons.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the School Distnct In nonparncipanng mterest-earnmg contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost Parncipatmg mterest-earrung contracts and money market Investments With a matunty at purchase ofone year or less are reported at amortized cost Both participating mterest-eammg contracts and money market Investments WIth a matunty at purchase greater than one year are reported at fair value. The Official Code ofGeorgia Annotated Section 36-83-4 authonzes the School Distnct to Invest Its funds and In selecl1ng among options for investment or among msl1lutional bids for deposits, the lughest rate ofreturn shall bethe objectrve, given equivalent conditions of safety and hquidity Funds may be Invested In the followmg:
(I) Obhgations ISSUed by the State of Georgia or by other states,
(2) Obligations Issued by the Umted States government,
- 14-

CITY OF PELHAM BOARD OF EDUCATION - MITCHELL COUNTY EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30. 2002

Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(3) Obhgations fully Insured or guaranteed by the United States government or a United States government agency,

(4) Obhgations of any corporation of the United States government,

(5) Pnme banker's acceptances,

(6) The Local Government Investment Pool adrmmstered by the State of Georgia, Office of Treasury and FIscal Services,

(7) Repurchase agreements, and

(8) Obligations of other pohtical subdivisions of the State of Georgia

RECEIVABLES

Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognrtion 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 uncollectible receivables

PROPERTY TAXES

The CIty of Pelham fixed the property tax levy for the 2001 tax digest year (calendar year) on October IS, 2001 (levy date) Taxes were due on December 20,2001 (lien date). Taxes collected withm the current fiscal year or WIthin 60 days after year-end on the 2001 tax digest are reported as revenue In fiscal year 2002 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, 2002 for maintenance and operations amounted to $255,088 52.

The tax nullage rate levied for the 2001 tax year (calendar year) for the CIty of Pelham Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

~mil1s

SALES TAXES

Local Option Sales Tax revenue dunng the fiscal year amounted to $347,536 86 and was recorded In the General Fund Local Opuon Sales Tax IS to be used for the maintenance and operation of the School District

- IS -

CITY OF PELHAM BOARD OF EDUCAnON - MITCHELL COUNTY EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 3D. 2002
Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Special Purpose Local Option Sales Tax revenue dunng the fiscal year amounted to $716,297 31 and IS to be used for capital outlay for educational purposes and debt service. This sales tax was authonzed by local referendum and the sales tax must be reauthonzed at least every five years
INVENTORIES
FOOD INVENTORIES Inventones of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods mventones are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the nme commodity Items are received. Purchased foods mventones are recorded as expenditures at the time 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, 2002, are recorded as prepaid Items
LONG-TERM DEBT AGREEMENT
The City ofPelham, Georgia (City Government) ISSUed General Obligation Bonds to provide funds for the acquisition and construction of major capital facihties. The general obligation 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 of Pelham shall provide for the assessment and collection ofan annual tax sufficient m amount to pay the pnncrpal ofand mterest on said debt by the levy of an annual tax upon all property subject to taxation for school bond purposes within the corporate limits of the City... ",
Although not required by formal agreement to do so, during fiscal year 2002, the School Distnct paid $147,193.40 for debt service on the City Government's general obhgatron bonds. However, as discussed above, the debt associated With those general obhgation bonds IS the liabihty of the City Government, therefore that debt IS not recorded on the financial statements of the CIty of Pelham Board of Education.
INTERFUND TRANSACflONS
The School Distnct has the following types ofmterfund transactions'
- 16 -

cm' OF PELHAM BOARD OF EDUCAnON - MITCHELL COUNTY EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30. 2002
Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reimbursements of expenditures/expenses minally made from a fund that are properly applicable to another fund are recorded as expenditures/expenses m the reimbursmg fund and as reducuons of expenditures/expenses m the fund that IS reimbursed
Operating transfers are recorded for all mterfund transactions other than reimbursements
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general-purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data m these columns do not present financial positron, results ofoperations or cash flows in confonruty WIthgenerally accepted accountmg pnncrples Neither are such data comparable to a consohdanon Interfund ehrmnanons have not been made in the aggregation oftlus data
Note 2: DEPOSITS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time m any depository for a time longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee of Insurance, or by collateral The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe pubhc funds bemg secured after the deduction ofthe amount ofdeposit Insurance. If a depository elects the pooled method (OCGA 45-8-13. I) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe dailypool balance OCGA Section 45-8-11 (b) provides an officer holdmg public funds may, m Ius discretion, waive the requirement for security m the case ofoperatmg funds placed in demand deposit checkmg accounts.
Acceptable secunty for deposits consists of anyone of or any combmanon of the followmg
(I) Surety bond SIgned by a surety company duly qualified and authonzed to transact business withm the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of mdebtedness 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 mumcipahnes of the State of Georgia,
(5) Bonds of any public authonty created by the laws of the State of Georgia, providing that the statute that created the authonty authorized the use of the bonds for this purpose,
- 17 -

CITY OF PELHAM BOARD OF EDUCATION - MITCHELL COUNTY EXHIBIT "F"
NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30, 2002

Note 2 DEPOSITS

(6) Industnal revenue bonds and bonds of development authonnes 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 Uruted 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, 2002, the bank balances were $4,508,479.26. 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 secunues held by the School Distnct or by the School Distncr's agent In the School District's name.
Category 2 - Cash collateralized With secunties held by the pledging financial msurution's trust department or agent In the School Distnct's name.
Category 3 - Uncollaterahzed deposits (TIus Includes any bank balance that IS collaterahzed WIth secunnes held by the pledging 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, 2002, as follows

RIsk Category

Bank Balance

I

$ 308,43601

2

160,420.96

3

4,039,622 29

Total

$ 4,508.479.26

Note 3 NON-MONETARY TRANSACTIONS

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

- 18 -

CITY OF PELHAM BOARD OF EDUCATION - MITCHELL COUNTY EXHIBIT "Fo NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30, 2002
Note 4 RISK MANAGEMENT
The School Distnct IS exposed to VariOUS nsks of loss related to torts, theft of, damage to, and destruction of assets, errors or omissions, Job related Illness or mjunes to employees, acts of God and unemployment compensation The School Distnct has obtamed commercial msurance for nsk of loss associated WIth torts and assets The School Distnct has neither sigruficantly reduced coverage for these nsks nor mcurred losses (settlements) which exceeded the School Distnct's msurance coverage many ofthe past three years The School District has elected to self-Insure for all losses related to acts of God In addition, the School District has elected to self-Insure for errors or ormssions, which mcludes, among other nsks, nsks for sexual harassment and discnmmation The School District has not expenenced any losses related to these nsks in the past three years
The School District IS self-msured Withregard to unemployment compensation chums A premium IS charged when needed by the General Fund to each user fund on the basis ofthe percentage ofthat fund's payroll to total payroll m order to cover estimated claims budgeted by management based on known claims and prior expenence The School District accounts for claims WIth expenditure and liability being reported when It IS probable that a loss has occurred, and the amount of that loss can be reasonably estimated. The School DIstrict has not mcurred any habihtres for unemployment compensation dunng the past two fiscal years.
The School Distnct participates in the Georgia Education Workers' Compensation Trust, a pubhc entity nsk pool organized on December I, 1991, to develop, Implement and adrmruster a program of workers' compensation self-Insurance for Its member orgamzanons, The School Distnct pays an annual premium to the Trust for ItS general msurance coverage, Addinonal Insurance coverage IS provided through an agreement by the Trust WIth the United States Fidehty and Guaranty Company to provide coverage for potential losses sustamed by the Trust in excess of $350,000,00 loss per occurrence, up to $2,000,000 00,
The School District has purchased surety bonds to provide addmonal msurance coverage as follows:
- 19 -

CITY OF PELHAM BOARD OF EDUCAnON - MITCHELL COUNTY EXHffiIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30. 2002

Note 4 RISK MANAGEMENT

PosItIon Covered

Amount

Supermtendent Each Principal Office ManagerlBookkeeper Each PersonnellPayroll Clerk Accounts Payable Clerk SecretarylBookkeeper All School Nutrition Managers

$ 100,000.00 $ 5,00000 $ 5,000.00 $ 5,000.00
s 5,00000 s 5,00000 s 10,00000

Note 5 ON-BEHALF PAYMENTS

The School Distnct has recognized revenues and expenditures in the amount of $105,080 55 for health insurance and retirement contnbutions paid on the School Distnct's behalfby the following State Agencies

Georgia Department of EducatIon Paid to the Georgia Department of Comrnuruty Health For Health Insurance of Non-Certified Personnel 1nthe amount of$95,117.55

Office of Treasury and Fiscal Services Paid to the Pubhc School Employees Retirement System For Pubhc School Employees Retirement (PSERS) Employer's Cost 1nthe amount of $9,963.00

Note 6' SIGNIFICANT COMMITMENTS

The following IS an analysis of sigrnficant outstanding constructIon or renovation contracts executed by the School Distnct as of June 30, 2002'

ProJect
Pelham High School Reroofing Pelham Elementary School
Kindergarten Renovation

Unearned Executed Contracts
s 8,14974
15.326.54

$ 23,476,28

The amounts described In this note are not reflected in the general-purpose financial statements

- 20-

CITY OF PELHAM BOARD OF EDUCAnON - MITCHELL COUNTY EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30, 2002

Note 7 CONTINGENT LIABILITIES

Amounts received or receivable pnncipally from the Federal government are subject to audit and review by grantor agencies This could result In requests for reimbursement to the grantor agency for any expenditures wluch are disallowed under grant terms. The School Distnct believes that such disallowances, If any, will be immatenal to Its overall financral position

Note 8 RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all teachers, admuustrative 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, disabilrty 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 Distnct who are covered by TRS are required by State statute to contnbute 5% of their gross earnings to TRS The School District makes monthly employer contribuuons to TRS at rates adopted by the TRS Board of Trustees In accordance With State statute and as advised by their Independent actuary. The required employer contnbution rate IS 9 24% and employer contributions for the current fiscal year and the precechng two fiscal years are as follows:

Fiscal Year

Percentage Contnbuted

Required Contribution

2002 2001 2000

100% 100% 100%

$ 595,822 18 $ 707,659.74 $ 628,682.34

- 21 -

CITY OF PELHAM BOARD OF EDUCATION - MITCHELL COUNTY COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 2002

ASSETS Cash and Cash EqUIvalents Accounts Receivable Inventones
Food Donated Commodtties Purchased Food
Total Assets

SCHOOL FOOD
SERVICES FUND

LOTIERY PROGRAMS

$

227,64142 $

8.06128

25,63734

49,686 82

12.28614 2.78334

$

268,348 24 $ _ _~5~7.,.7:4.8:1:0..

LIABILITIES ANP FUNp EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payabla Daferred Revenue
Total b1abllrties
FUND EQUITY
Fund Balances Reserved For Inventorias Food Donated ccmrnecmes Purchased Food Unreserved Undeslgnated
Total Fund Equity
Total b1ab,lrtJas and Fund Equrty

$

6,534 28 $

31,44992

36,86768

26,29818

$

43.40196 $

57,748 10

$

12,286 14

2,78334

209,87680 $

000

$

224.946 28 $

000

$

268,348 24 $ _ _.::.:...:.;:;;:..:,::.,

See notes to the general-purpose finanoal statements -22-

EXHIBIT"G"

FEDERAL PROGRAMS

TOTALS

JUNE 30, 2002

JUNE 30, 2001

$

235,70270 $

244,51961

$

180,61361

255,937n

195,098 52

12,286 14 2,78334

12,45570 2,76003

$

180,61361 $

506,709 95 $_..4.5;4,:83=3~86~

$

107,053 00 $

107,05300 $

123,59738

15,794 46

53,n866

24,768 54

57,766 15

120,932 01

112,985 24

3184

$

180,61361 $

281,76367 $

261,383 00

$

$ ----"-"'0''0-0-

$

000 $

12,286 14 $ 2,78334

12,455 70 2,760 03

209,87680

178,23513

224,946 28 $_---1'9=3,=45:0=86..

$

180,61361 $

506,709 95 $_.....4=5=4,:8:3.3:::8:6..

- 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, 2002

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instrucbon Support Services Pupil Services Improvement of Instructional SeMces Educabonal MedIa SeMceS General AdmInistration Maintenance and Operation of Plant Othar Support SaMces Food SeMces Operabon
Total Expenditures
Excess of Ravenuas ovar (undar) Expenditures
OTHER FINANCING SOURCES
Operating Transfers In
Excess of Revenues and Other FinanCln9 Sources over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory - Net Change In Pened Donated CommodrtJes Purchased Food
FUND BALANCE JUNE 30

SCHOOL FOOD
SERVICES FUND

LOTIERY PROGRAMS

$

52,204 00 $

316,094 19

521,85936

110,13573

$

684,19909 $

316,094 19

$

259,622 44

28,553 78

12,501 00 15,261 69

$

652,55742

53730

$

652,55742 $

316,47621

$

31,64167 $

-38202

$

31,64167 $

193,450 86

169 56 2331

38202
000 000

$

224,946 28 $

.....:;0:,0.::0::,.

See notes to the genera~purpose financral statements 24

EXHIBIT"H"

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$

368,298 19 $

306,45562

$

868,32724

1,390,18660

1,380,380 96

110,13573

110,62737

$

868,32724 $_--,1-,,8,6=8=,6,2,0-=52,- $ 1,797,463 95

$

670,65890 $

930,28134 $

878,663 03

14,556 34 85,92512
70,02978
27,45088

43,11012 85,92512
82,53078 15,26169 27,45088 653,094 72

41,14250 53,91184
3,50545 95,43998 13,694 12 24,565 84 689,11866

$

868,62100 $ 1,837,654 63 $ 1,780,04142

$

-29376 $

30,96589 $

17,422 53

29376

67578

2,70127

$

000 $

31,84167 $

20,123 80

000

193,45088

164,568 85

-16956 2331

8,59770 160 51

$

000 $

193,450 86

- 25-

CITY OF pELHAM BOARD OF EDUCATION - MITCHELL COUNTY COMBINING BALANCE SHEET CAPITAL pROJECTS FUND JUNE 30 2002

ASSETS Cash and Cash Equivalents Investments Accounts ReceIVable
Totel Assets

REGULAR

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

s

s 950,934 13

000

$

950 ,934 13 s ~_ _~ 00~ 0

L1ABILmES AND FUNp EQUITY
L1ABILmES Contracts Payable Retelnages Peyable Totel Llablhtles
FUND EQUITY Fund Balances ReseNed For SPLOST Projects unreserved UndeSlgnated Totel Fund Eqully
Totel LlBb,hbes and Fund Eqully

S

134,654 40

25,571 50

$

160,22590

s

790,708 23 $

000

S

790,708 23 S

000

s

950 ,934 13 $ ~_ _...:0:.,0:;0:::.

See notes to the general-pUrpose finanCIal stetements 26

EXHIBIT "I"

SPECIAL PURPOSE LOCAL OPTION
SALES TAX

TOTALS

JUNE 30, 2002

JUNE 30, 2001

$

793,654 93 $ 1,744,58906 $

669,62579

620,000 00

125,74749

125,74749

305,76261

$

919,40242 $

$

134,654 40 $

381,44340

25,57150

65,53320

$

160,225 90 $ _--""",4-,4,-6,,-9,=7,6-6,,0,,-

$

919.40242 S

000

790,70823

472,22983

$

919,40242 $ 1,710,11065 S 1,568,611 80

$

919,40242 S

2,015,58640

- 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 2002

REVENUES State Funds Taxes Other Funds Total Revenues
EXPENDITURES Capital OuUay Building end BUilding Improvements
Excess of Revenues over (under) Expendllures OTHER FINANCING SOURCES IUSES)
Operellng Transfers in Operating Transfers Out
Total O1her F,nanang Sources (Uses) Excess pf Revenues and Other FinanCing Sources
over (under) Expendrtures and O1her Financing Uses FUND BALANCE JULY 1
FUNP BALANCE JUNE 30

REGULAR

GEORGIA STATE FiNANCING AND
INVESTMENT COMMISSION

$

20,00000 $

148,832 51

10,294 23

$

30,294 23 $

148,83251

$

419,74747 $ 1,016,16622

$

-389,453 24 $

-867,333 71

$

707,93164 $

667,33371

$

707,93164 $

667,33371

$

318,47840 $

000

472,22983

000

$

790,708 23 $_=~.....:0~0:0.

See notas to the general-purpose finanCIal statemen1s - 28-

EXHIBIT "J"

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$

168.83251 $

270,39749

$

569,10391

569.103 91

589,84816

16,57654

26.87077

83,66278

$

585,68045 $

764,80719 $_--,=92=3,"90-8,,4,3,-

$

000 $ 1.435.91369 $_--7,97~,1~4~ 6 2"1-

$

585,68045 $

-e71.106 50 $ _ _1'-2"'6<,07=6.2.2..2,,-

$ 1.575.265 35 $

953,409 20

$

-762,660 00

-762.660 00

273,063 20

$

-762,660 00 $

812.60535 $

680,346 00

$

-176,97955 $

141,498 65 $

1,096,381 97

1,568,611 80

807,108.22 761,50358

$

919.40242 $

1:710,11065 $ 1,568,611 80

29

CITY OF PELHAM BOARD OF EDUCATION - MITCHELL COUNTY COMBINING BALANCE SHEET FIDUCIARY FUND TYPES JUNE 30 2002

EXHIBIT"K"

ASSETS Cash and Cash EqUIValents Investments Held by Trustee Accounts ReceIVable

NONEXPENDABLE TRUST FUND
ENDOWMENT FUND C M AND BERNICEC STRIPLING
PELHAMFFA SCHOLARSHIP TRUST FUND

AGENCY FUND

TOTALS JUNE 30, 2002 JUNE 30, 2001

s

6,97900 S

134 78 S

7,11378 S

482478

20,00000

20,00000

20,00000

1,78301

1,783 01

1,15882

Total Assets

S

28:76201 S

134 78 S

LIABILmES AND FUND EQUITY

LlABlLmES

Funds Heldfor Others

FUNp EQUITY

Fund Balances

RoaoMld

For Endowment Corpus

S

Unreserved

Undoslgnaled

Total Fund Equity

S

Total LIBblhlles and Fund Equity S

S

134 78 S

134 78 S

11978

20,000 00
8,762 01 S 28,76201 S
28,762 01 S

S
000
000 S

20,000 00 S
8,76201
28,76201 S

20,00000 5,86382
25,86382

_-=-==::.. 134 78 S

28,896 79 S

25,98360

see notes to the goneral-purpose linandalstatemonts

- 30-

CITY OF PELHAM BOARDOF EDUCATION - MITCHELLCOUNTY STATEMENTOF CHANGES IN ASSETS AND L1ABILmES FIDUCIARY FUNDTYPE - AGENCY FUND YEAR ENDED JUNE 30 2002

EXHIBIT "L"

REMEMBRANCE GIFT FUND ASSETS
Cash and Cash EqUivalents
LIABILITIES Funds Held lor Othern

BALANCE JULY 1, 2001

ADDmONS

DEDUCTIONS

BALANCE JUNE 30, 2002

$

11978 S

75 00 $

6000 $

134 78

s

11978 S

75 00 $

6000 $

1~ 34 ~ 78

See no1es to the general-purposeflnanClal statemen1s

- 31 -

Cm OF pELHAM BOARD OF EDUCATION. MITCHELL COUNTY SCHEDULE OF EXPENDIDJRES OF fEDERAL AWARDS YEAR ENDED JUNE 30 2002

SCHEDULE "'"

FUNDING AGENCY pROGRAMIGRANT
Agncuttura U S Department 01
Child Nutnnon Cluster
Paae-Through From GeorgIa Departmllllt of Education
food 8nd NutrItion Program food ServiceS School Breakfast Program NabonBl School Lunch Program
Totsl Child NutntJon Cluster
Other Programs PsssThrough From GeOfgl8 Department of Edueatlon food 8nd NutntJon Progrllm Food Dlstrlbutton Program (1)
T018I U S Department of Agriculture
Educabon. U S Department of SpeCIal EdUC8tlon Cluster P8SS-Through From Georgia Department of EdUCBtJon
-IndlVldUBIs with DlS8b1~beS EducabOn Ad Pert B Speasl Educatton Flow Through
Pert C - Speclal Education S~I Edl..le-bon Cl!lpaaty Bullchng tmproveml!lnt
Total SpeclaJ EdUCl!ltlonCluster
Other Programs Dned Impact AId P8uThrough From GeorgI8 Department of EducabOn Elementary and Secondary EducabOn N::t nth!! I Accountability Grant Grants to Local Educational Agenaea Trtle II Elaenhower Pro1eIIIOI\BI Development Trtlelll Technology Lrteracy Challenge Fund Grants Tlue VI IMOVlIlIYe Educabon prog... m su.teg1n Class SIZe Reduction GOBls 2000 State and Local Educ:atlon SyaterTllC Improwment Orenta VocatIOnsI educatIOn Basic GllIInta to SWta High School Program B8SlC Grant
Pall-ThrOugh From MltcheD County BOlird 01Edueatkln
Elementary end Secondary EducabOn Ad Title I
Grants to Locel EducabOnBl AgertCIH
Total U S Department of Education

CFDA NUMBER

PASSTHROUGH
ENTITY 10
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

10553 10555

NlA

S 108 221 51

NIA

372 409 68 S

S 480631 19 S

(2) 61132925 (3)
61132Q25

10550

NlA

41,22817

S 521,e5936 S

41,22817 652,55742

Bot 027 Bot 173
84 173

NlA S 16945833 S

NlA

17 714 72

NlA

425200

S 191,42505 S

16945833 17,71472
4,25200
191,42505

84 041

844849

(4)

84 348

N/A

84 010

N/A

84 2e1

N/A

84 3t8

NlA

84 29"

NlA

84 340

NlA

84 276

NlA

84 049

NlA

64 969 00 186 ee1 87
664875 12500000
e e01 00 37,009 00
1,558 57
36 687 00

85084 82 (3) 186 88187
664875 12501984 (3)
8908 98 (3) 37009 00
1 588 21 (3)
35 729 49 (3)

84010

N/A

209,34700

S 87677573 S

209,34700 se8,62100

TotBl Feeleral Flnenclal Asslstance N1A II Not Available

- 32

S 1,398,63509 S

1,521 17842

CITY OF PELHAM BOARD OF eDuCATION. MITCHELL COUNTY SCHEDULE OF EXPENPI!URES OF FEDERAL AWARDS YEAR ENDED JUNE 30 2002

SCHEDULE "1"

Not'" 10 !h0 Schftdule of Exoendrtura, of Fedoral Awards
(1) Tho amounts shown torthe Food Dlstnbubon Program represents the Federally IlSllgned value of nonmonetary
eesetence tor donated commodrttes recelV8d BOdJorconsumed by the system dunng the current fiscal year
(2) Expenditures for the School Breakfast Progl'8m were not malntBlt'l8d
eepetately and are Induded r.n the 2002 Natlonal School Lunch Program (3) ExpendItures for thiS progl'8m Include State, end/or Other Funds
Expenditures are not maintained by fund source
(4) Funds earned on ttus program do not require reportlng of expendItures
MeJOr Programs are ldenbfied by an aatensk (e) In front of the CFDA number
The School D1stnd did not provlde Fedel'8l Aur:atanc:e to any Subrecplent
The accompanYIng schedule of expenchtures of Federal Awards Includes the Federal Grant AdJY1tyof the City of Pelham Board of Educatlon and IS presented on the modified acaual baSIS of accounting whICh IS the baSIS of accounlJng uaecl In the presentation of the general-purpoae flnanaal statements

See notes to the general-purpose finanaal statements

" 33-

CITy OF PELHAM POMp OF EDUCATlON _MITCHELL COUNTY SCHEPULE OF STATE REVENUE YEAR ENDED JUNE 30 2002

SCHEDULE 7 '

AGENCY/FUNDING

GOVERNMENTAL FUND TYPES

SPECIAl

CAPITAl

GENERAL

REVENUE PROJECTS

FUND

FUND

FUND

TOTAL

GRANTS

Educabon Georg18 Department of

Quality BalK: Education

Drreet In&tructlonal Cost

Klfldergarten Program

S 400 249 00

Kindergarten Program - Earty b1terventlon Program

123 82g 00

Pnmary Grades (1-3) Program

97005700

Primary Grades - ElirtyInterventIOn (1-3) Program

18775200

Upper Elementary Grtldes (4-5) Program

597 ()olJ8 00

Upper Elementary Grades (4-5) ~ tntervenbOf'l Proglllllm

41754 00

Middle School (6-6) Program

g35,84700

H'Oh School General Education (9-12) Proglllllm

8n11300

VocatlOnal18bollllltory (9-12) Program

340,36500

Students with D....bliltle.

GalegO<'j II
GalegO<'j m

303,92900 481920 00

Gifted Student - CategO<'j VI

137,004 00

Remed18.1 Educalton Program

87,mOO

Altemabve Educalton prog.ram

72,05700

EnglJlh Speakers of Other Languagea (ESOL)

13,70700

Media center Progrtlm

16640800

Stan and PrcfeuJonlll Development

30857 00

Indnct Cost

1,18753900

Twenty Days AddrbOnallnatruc:bOn

5O,41g 00

Cateooneal GllIIInta

Pup'1 TfW\SllOf1OlIon

Regular

3274200

Bu. Replacement

881400

Sparsrty

20,000 00

Nnng SeMce.

49,18500

P"napa! Supplements

6,85500

VOC8bOf\III SupervllCW'S

1246600

EducatIOn Equllllzabon Funding Grant

1781,39200

Food 5ef'VIOl!s

S

VocabOnal Educabon

9,029 19

Other State Programs

Hellth Insurance
....a Statewide After School Progrtlm

95117155 18128 00

K-3 Sta~ Reading Proglllllm Preschool Hl!lndicapped Program

2223088
:ze 70e 00

Lottery Programs

Alltstlve Technology

Computers In the CIIi room

52204 00
5,nSOO 73,500 00

S 40024900
123 82g 00 g70 057 00 16775200 597,04800
41,754 00 g35 647 00 87711300 34036500
30392900 481 92000 137004 00
87,86500 72,05700 13,70700 166 408 00 30,65700 1,187,53900 SO,41g 00
32,74200 861400
2000000 4918500
8 8S5 00 12 4e8 00 1,781,392 00 52,204 00
9,02919
9511715S 18,12800 22 230 86 26,708 00
snsoo
73,50000

Georg18 State Fmanong end Investment CommosslOn RelnY.MJraement on Construction Protedl

S 148,83251

1"8,83251

On-teeof SChOOl Reldlness Pre-Kw1l18fgar1lln Program

238 81g 19

238 819 19

On-teeof Trusury and FISCal Services PublIC SChool Employees Retirement

9,983 00

gge300

OTHER
Community Arran, Georgia Department of
Local Aa.latlincll Gnlnts

1500000

2000000

35,00000

S 8:870.54342 S 388 129819 S 186 163251 S 9140787412

see notes sothe general-purpose mandalltatementl

- 34-

CITY OF pELHAM BOARp OF EPUCATlON - MITCHEll COUNTY SCHEPUlE OF APPROVED lOCAL OPTION SAlES TAX PROJECTS
YEAR ENDED JUNE 30 2002

SCHEDULE 0"

PROJECTS

ORIGiNAl ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS (3)

PROJECT STATUS

The repayment of principal and Interest on outstanding Cityof Pelham General ObhgabonBonds, Senes 1993. coming due on February 1, 1998, and semiannually thereafter 8S set forth m Exh,brt"8" attached hereto and, by thiS reference thereto, Incorporated herein, the maximum amount of debt to be rebrad not to exceed $1,612,300 00

$ 1,612,300 00 $ 1,612,300 00 $

147,1934Q $

566,24964 OngDUlg

The 3~ulSmon, construction and equ,pp,ng of caprtBl outlay projects for the Pelham SChool System
constsUng of 8 new p~ergarten bullchng on the campus of the Pelham
EJemen1ary School and addrbons, expanSions, improvements. renovations modIfications and eqUipping of exlsbng school faalrbes of the Pelham School System, m an amount nolto exceed $2,121,27300

2,121,27300 2,121,273 00 1,016,16622 1,581,036 03 Ongo,ng

$ 3:733,573 00 $ 3,733,573 00 $ 1,163,35962 $ 2,167,285 87
(1) The School DlSlncl's ong,nel costesbmate .. apeclfled m the resolution calhngfor the imposition of the local Opbon Sales Tax
(2) The School D,stnel's current estlmata of total cost for the projects Indud.. all costfrom prated ,noeptlonto compIebon
(3) The vote.. of Crty of Pelham appn:ryed the Irnpoolbon of a 1% sales tax to fund the _ projOClS Amounts e_nded for these Prateds may ,ndude sales tax proceeds, slats, local property taxes and/or other lunds D1Ier the hfe of the Protects

See notasto the general-purpose IlnanCl3I statements

- 35-

CITY Of PELHAM BOARD OF EDUCATION - MITCHELL COUNTY
GENERAL FUND - OUALITY BASIC EDUCATION PROGRAM rOBEl ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 39 2002

SCHEDULE "4"

DESCRIPTION

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (11

ELIGIBLE aBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

Dlf8d InstrudJonal Programs

Kmdergarten Program

$

Klrldl!!lrgarten Program-Early Intervention Program

Pnmary GradeS (1-3) Program

Pnmary GradaS-Early InteJV8l1bOn (1-3) Program

Upper Elementary Grades (4-5) Program

Upper E1.mentary Gradas-Early Intervention (4-5)

Program

M,ddl. School (~) Program

High School Goneral Educabon (9-12) Program

Vocational boboratory (9-12) Program

Students wtth otaabliities

Category II

Category III

GIItod Student - Cata90ry VI

Remedial Edueabon Program

Alternative Educ:atJon Program

English Speakera of Othar bonguoga. (ESOL)

407.565 00 $ 313733 &I $

125.88900

149909 58

987.788 00 1,039.18756

179.81800

152 388 87

697.911 00

579.993 87

42.565 00 952.74900 689.48900 346.586 00 800.21300
13950809 89.471 09 73.37409 13.958 00

45.61623 1.118.74248
908,44772 350.m23
512,52066 263.97764
48,25146 45.85392 94,13959
8.81272

993771 $ 391 19
43.265 62 2.&1947
25.703 45
1.000 00 36.12883
roo.rra se
54.64295
5.83371 8.17026 3.51496 1.&10 97
1017 21568

322,771 55 141,300 68 1.973,45318 15533834 _.79712
46.61623 1.154.87111 1.909.221 69
405,41428
518 J504 37 272.14799
4976642 47.7&189 94.14976
8,82840

TOTAL DIRECT INSTRUCTIONAL PROGRAMS

$

5.447.884 00 $ 5.611.248 17 $ 293.57766 $ 5_.82583

Media center Program
Staff and ProfeS51onal Devetopment

169.44900 31.421 00

185.12312 3.82448

48.51531 39,41119

21383843 43.23565

TOTALOBEFQRMULAFUNDS

$

5.648,754 00 S 5,78O,1957!5 S 381.504 16 $ 6.161.699 91

(1) COmprised of Stat. Funds plus Local Five Mil Share

See notes to the general-purpose flnBndal statements

- 36-

CITY OF PELHAM BOARD OF EDUCATION - MITCHELL COUNTY GENERAL FUND - aUALITY BASIC EDUCATION PROGRAM (aBEl
ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2002

SCHEDULE "5"

Pelham HI9h School Pelham City Middle School Pelham Elementary School Central Office (Altemative Educa1lon Pro9ram) Psychoeducallonal Program
TOTAL
(1) Compnsed of State Funds plus Local Frve MIll Shara

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE aBE PROGRAM COSTS

$

1,333,867 00 $

1,685,285 77

1,295,676 00

1,361,33844

2,744,96700

2,749,98258

73,37400

93,65735

14,58169

$

5,447 ,884 00 $_...5:,9;0=4=,8~2;5;83.

See notes to the general-purpose finanCIal statements - 37-

SECIlONII COMPLIANCE AND INTERNAL CONTROL REPORTS

RL".,III W. HIN roN
STATF AUDITOI-l
(4~1 6"0 .:'17..

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washmgton Street, S W SUIlC 214
Atlanta Georgia 303 >4-l\4(KJ
February 7, 2003

Honorable Sonny Perdue, 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 WITH GOVERNMENT AUDITING STANDARDS
Ladles and Gentlemen
We have audited the financial statements ofCity ofPelham Board ofEducatIon as ofand for the year ended June 30, 2002, and have ISSUed our report thereon dated February 7, 2003 This report was quahfied for vanous departures from generally accepted accountmg principles, as Identified m the auditor's report on the general-purpose financial statements. We conducted our audit m accordance WIth auditmg standards generally accepted m the Uruted States of Amenca and the standards applicable to financial audits contamed m Government Audltmg 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 certam provisions oflaws, regulations, contracts and grants, noncomphance WIth wluch could have a direct and matenal effect on the determmation offinancial statement amounts However, providing an opmion on comphance WIth those provisrons was not an objective of our audit, and accordmgly, we do not express such an opmion The results ofour tests disclosed no mstances ofnoncomphance that are required to be reported under Government Auditing Standards
Internal Control Over Fmanclal Reportmg
In planrung and perfomnng our audit, we considered City of Pelham Board of Education's mternal control over financial reporting in order to determme our audrtmg procedures for the purpose of expressmg our opiruon on the financial statements and not to provide assurance on the mternal
2002YB-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 condition Reportable conditions mvolve matters commg to our attention relatmg to sigruficant deficiencies m the design or operation of the mternal control over financial reportmg that, ill 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 in the accompanymg Schedule ofFmdmgs and Questioned Costs as Item FS- 7841-02-0 I.
A matenal weakness IS a condition in which the design or operation of one or more of the mternal 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 in the normal course of performmg their assigned functions Our consideranon of the mternal control over financial reportmg would not necessanly disclose all matters m the mternal control that might be reportable conditions and, accordmgly, would not necessarily disclose all reportable condinons that are also considered to be matenal weaknesses However, the reportable condition descnbed above IS considered to be a matenal weakness
This report IS mtended solely for the mformanon and use of management, members of the City of Pelham Board ofEducation, Federal awardmg agencies and pass-through ennties and IS not mtended to be and should not be used by anyone other than these specified parties.
-- ~~.:-k Respectfully subrmtted, ....
R sell W Hmton State Auditor
RWH:as 2002YB-40

RU"'~I:L1 W. HI'TO'
STA"'[ AlJrJITQR
14041656-217 ..

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Waxhmgton Street S W Suite 214 Atlanta, Georgld 3U33-H<4lKJ
February 7,2003

Honorable Sonny Perdue, 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 REQUIREMENTS 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 ofEducation 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 of Its major Federal programs for the year ended June 30, 2002 City of Pelham Board of Education's major Federal programs are identified in the Summary of Auditor's Results Section of the accompanymg Schedule of Fmdmgs and Questioned Costs Compliance WIth the requirements of laws, regulations, contracts and grants applicable to each of Its major Federal programs IS the responsibihty of City of Pelham Board of Education's management Our responsibrhty IS to express an opiruon 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 Umted States of Amenca; the standards applicable to financial audits contamed m Government AuditIng Standards, ISSUed by the Comptroller General ofthe Umted States; and OMB Circular A133, Audits of States, Local Governments, and Non-Profit Orgamzations Those standards and OMB Circular A-I33 require that we plan and perform the audIt to obtam 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 audrt mcludes exarmrung, on a test basis, evidence about the City of Pelham Board of Education's compliance WIth those requirements and performing such other procedures as we considered necessary m the circumstances. We believe that our audit provides a reasonable basis for our opimon Our audit does not provide a legal determmanon on City of Pelham Board of Educanon's compliance With those requirements
2002SA-IO

In our opmion, the City of Pelham Board of Education comphed, m all matenal respects, with the requirements referred to above that are apphcable to each of Its major Federal programs for the year ended June 30, 2002
Internal Control Over Comphance
The management of CIty of Pelham Board of EducatIon IS responsible for estabhslnng and mamtammg effective Internal control over comphance WIth requirements of laws, regulations, contracts and grants apphcable to Federal programs In plannmg and perforrnmg our audit, we considered CIty ofPelham Board of Education's mternal control over comphance WIthrequirements that could have a direct and matenal effect on a major Federal program in order to deterrmne our audmng procedures for the purpose of expressmg our opinion on comphance and to test and report on mternal control over comphance in accordance WIth OMB Circular A-133.
Our consideration ofthe Internal control over comphance would not necessanly disclose all matters m the Internal control that might be matenal weaknesses A matenal weakness IS a condinon m winch the design or operation ofone or more ofthe Internal control components does not reduce to a relatively low level of nsk that noncomphance WIth apphcable requirements of laws, regulations, contracts and grants that would be matenal m relalIon to a major Federal program bemg audited may occur and not be detected WIthin a tunely penod by employees m the normal course of performmg their assigned functions. We noted no matters mvolvmg the mternal control over comphance and Its operatIon that we consider to be matenal weaknesses.
TIns report is mtended solely for the Information and use of management, members of the CIty of Pelham Board of Education, Federal awarding agencies and pass-through entities and is not Intended to be and should not be used by anyone other thanthese specified parties.
- - ~.~~ Respectfully subnutted,
Rus ell W. Hinton Sta e Auditor
RWHas 2002SA-IO

SECTION ill AUDITEE'S RESPONSE TO PRIOR 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, 2002

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-7841-00-02 FS-7841-01-0l

Further Action Not Warranted Unresolved - See Corrective Action/Responses

CORRECTIVE ACfIONIRESPONSES

GENERAL FIXED ASSETS Failure to Mamtam General Fixed Assets Account Group Finding Control Number. FS-7841-01-0l

We concur WIththis recommendatIon The School Distnct IS in the process ofpreparmg to record general fixed assets on the financial statements in unplementmg GASB Statement 34

SECTIONN FINDINGS AND QUESTIONED COSTS

CITY OF PELHAM BOARD OF EDUCATION - MITCHELL COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2002
I SUMMARY OF AUDITOR'S RESULTS
Type of Report Issued on the Financial Statements The auditor's opimon on the CIty of Pelham Board of Education's financial statements was qualified for vanous departures from generally accepted accountmg principles
2. Reportable Condluons In Internal Control Disclosed by the Audit of the Fmanclal Statements The audit report for the CIty of Pelham Board of'Educanon disclosed a financial statement reportable condition related to the following control category
General Fixed Assets
The reportable condrtion descnbed above IS considered to be a matenal weakness
3 Noncompliance Matenal to the Fmanclal Statements The audit ofthe CIty ofPelham Board of'Educanon disclosed no instances ofnoncompliance that were deemed to be matenal to the financial statements
4 Reportable Condluons m Internal Control Over MaJor Programs The audit report for the City of Pelham Board of'Educauon did not disclose any reportable conditions in mternal control over major programs,
5 Type of Report Issued on Comphance for Malor Programs The auditor's opimon on the City ofPelham Board of'Educanon's report on compliance With reqwrements applicable to major programs was unqualified.
6 Audit Flndmgs ReqUired to be Reported by SectIon .51Oea) of OMB Circular A-133 The City ofPelham Board ofEducation's audit did not disclose audit findings required to be reported by section ,51O(a) ofOMB Circular A-133.
7 MalOr Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10,555 Food and Nutntion Program - Food Services - National School Lunch Program
8 Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00
9 Low RIsk Audltee The City ofPelham Board of Education qualified as a low nsk auditee as defined by Section .530 ofOMB Circular A-133.
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CITY OF PELHAM BOARD OF EDUCAnON - MITCHELL COUNTY SCHEDULE OF FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30. 2002
II FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintam General Fixed Assets Account Group Reportable Condition - Matenal Weakness Repeated From Pnor Year Fmdmg Control Number. FS-7841-02-01 The City of Pelham Board of Education did not mamtam a system-wide General Fixed Assets Account Group withm the formal accountmg records as required by generally accepted accountmg prmciples. This condition results in the general-purpose financial statements ofthe School District bemg mcomplete and not In accordance With generally accepted accountmg pnnciples Appropnate action should be taken by the School District to establish accountmg controls and procedures to provide for maintenance ofa General Fixed Assets Account Group These subsidiary records should mclude an mventory of land, buildings and equipment owned by the School DIStnCt and should mclude but may not be hrmted to date acquired, acqursition cost, estimated replacement cost, location and descnption Detailed records should bemamtamed ofall addmons and deletions to the General Fixed Assets Account Group Management's Response: We concur WIth this recommendation. The Board IS in the process ofprepanng to record general fixed assets on the financial statements in implementing GASB Statement 34 ill FEDERAL AWARD FINDINGS AND OUESTIONED COSTS No matters were reported.
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