Audit report, City of Trion Board of Education, Chattooga County, year ended June 30, 1999

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AUDITREPORT

CITY OF TRIONBOARD OF EDUCATION

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CHATTOOGA COUNfY, GEORGIA

YEAR ENDED JUNE30, 1999

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1
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STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

RECEIVED
JUL 2 1 ,200L! . Documents 'Lt~ l\ ~ , ~'" .' 7 ~ ~ .~~

cm OF TRION BOARD OF EDUCATION - CHAITOOGA COUNTY
- TABLE OF CONtENTS -

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS .-)
EXHIBITS

GENERAL fURPOSE 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, EXPENDmJRES AND

CHANGES IN FUND BALANCES - BUDGET AND Acrusr,

(NON-GAAP BASIS)

. GENERAL AND SPECIAL REVENUE FUNDS

7.

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

8

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

16

F

COMBINING STATEMENT OF REVENUES, EXPENDmJRES

AND CHANGES IN FUND BALANCES

17

CAPITAL PROJEGTS FUND

G

COMBINING BALANCE SHEET

18

H

COMBINING STATEMENT OF REVENUES, EXPENDmJRES

AND CHANGES IN FUND BALANCES

19

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.0

SCHEDULES 1 SCHEDULE OF EXPENDmJRES OF FEDERAL AWARDS

20

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2 SCHEDULE OF STATE REVENUE

22

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3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

23

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4 SCHEDULE OF EXPENDmJRES

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LOTTERY PROGRAMS

24

COY OF TRIONBOARDOF EDUCATION - CHAlTOOGA COUNTY - TABLEOF CONTENTS -

SECTION I

FINANCIAL

ADDmONAL FINANCIAL INFORMATION

SCHEDULES

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASICEDUCATION PROGRAMS

5

OVERALL

25

6

BY PROGRAM

26

SECI10NII
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVERFINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACHMAJORPROGRAM AND INTERNAL CONTROL OVERCOMPLIANCE IN ACCORDANCE WITHOMB CIRCULAR A-133

SECTIONm AUDITEE'S RESPONSE TO PRIORYEARFINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIORYEARFINDINGS AND QUESTIONED COSTS

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

SECflONI FINANCIAL

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w.. Suite 214 Atlanta. Georgia 30334-8400
May 10, 2000

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City ofTrion Board ofEducation

INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE
FINANCIAL STATEMENTS AND SupPLEMENTARY INFORMATION -
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

Ladies and Gentlemen:

We have audited the accompanying general purpose financial statements of the City of Trion Board of Education, as of and for the year ended June 30, 1999, as listed in the table of contents. These general purpose financial statements are the responsibility of the City of Trion Board of Education's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Goyernment Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

. As described in the notes to the general purpose financial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:

* The general purpose financial statements of the Board did not contain a General Fixed Assets

Account Group to account for property and equipment owned by the Board which should be

included to conform to generally accepted accounting principles.

.

99ARL-13

School activity accounts maintained at the individual schools are not included in the general purpose

financial statements. To conform to generally accepted accounting principles, these accounts should

be included in the general purpose financial statements.

.

The Board did not recognize as expenditures, in the year ended June 30, 1999, a portion of salaries ;' and the corresponding employer's cost of related benefits earned for contractual services completed
prior to June 30, 1999. Also funds received; subsequent to June 30, 1999, from the Georgia Department of Education for the State's share ofthese unrecorded salaries and related benefits were not recorded as revenue in the year under review.' Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1998, were improperly recorded in the year ended June 30, 1999. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.

The Board did not record the revenues and expenditures associated with Federal donated commodities in its general purpose financial statements. To conform to generally accepted accounting principles, these amounts should be recorded in the general purpose.financial statements.

The aggregate effects on the general purpose financial statements ofthese variances or omissions have not been determined, but are believed to be material.

In our opinion, except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements referred to above present fairly, in all. material respects, the financial position ofthe City ofTrion Board of Education as of June 30, 1999, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles.

In accordance with GoYernment Auditing Standards, we have also issued our report dated May 10, 2000, on our consideration ofthe City ofTrion Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants.

Our audit was performed for the purpose of forming an opinion on the general purpose financial statements ofthe City ofTrion Board ofEducation taken as a whole. The accompanying combining statements (Exhibits E through H) and the financial schedules (Schedules 1 through 6), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are notarequired part of the general purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and in our opinion, except for the effects ofthe matters referred to in the third paragraph, such information is fairly presented in all material.respects in relation to the general purpose financial statements taken as a whole.

99ARL-13 ...

A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,
~M.Qq W.4:L
Russell W. Hinton State Auditor
RWH:gp 99ARL-13

COY OF TRION BOARD OF EDUCATION - CHATIOOGA COUNfY

CITY OF TRION BOARDOF EDUCATION - CHATTOOGA COUNTY COMBINED BALANCE SHEET ALL FUND TYPES JUNE 30,1999

ASSETS
cash and cash Equivalents
Investments
Accounts Receivable
Inventories
Food
Donated Commodities Purchased FoOd

GENERAL FUND

GOVERNMENTAL SPECIAL REVENUE FUND

$

954,850,37 $

65,691,06

173,706,80

98,946,83

6,088,49 4,060.n

Total Assets

$ 1,128,557.17 $ _ _.1..7...4..,.7...8.i7oi.o1ioi5ii_

Total Uabllitles and Fund Equity

$

The notes to the general purpose financial statementsare an Integralpart of this statement,

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1,128,557.17 $ _ _"1;";7,;;4...,:7.;;8;.;7,,,,;1,,,5:,;;~

FUNDTYPES CAPITAL
PROJECTS FUND
$ 1,434,680.80 $
21,136.91

DEBT SERVICE
FUND

TOTALS

(Memorandum Only)

JUNE 30,1999

JUNE 30, 1998

44,614.18 $ 2,499,836.41 $

595,403.09

300,000.00

84,547.66

378,338.20

296~372.00

6,088.49 4,060.n

4,599.03 3,914.44

$ 1,455,817.71 $ 129,161.84 $ 2,888;323.87 $ 1,200.288.56

$

7,748.22

$

7,748.22

$

105,973.81 $

50,241.16

4,876.88

86,482.94 45,967.24

$

161,091.85 $

132,450.18

$

$

129,161.84

8,428.07 $ 129,161.84

3,452.69

$ 1,292,355.35 155,714.14
0.00 $ 1,448,069.49 $

6,088.49 4,060.n 1,292,355.35 155,714.14

4,789.70

10,000.00

0.00

.1,116,633.66

129,161.84 $ 2,727,232.02 $

4,599.03 3,914.44
6,723.70 10,000.00 1,039,148.52 1,067,838.38

$ 1.455,817.71 $

129,161.84 $ 2,888,323.87 $ 1,200.288.56

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CITY OF TRION BOARD OF EDUCATION - CHATIOOGA COUNTY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 1999

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES .)
Current Instruction Support Services Pupil Services Imprpvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services central Support Services Food Services Operation
Capital Outlay
Total Expenditures
Excess of Revenues over (under) expenditures
OTHER FINANCING SOURCES (USES)
prpceeds from General Obligation Bonds Par Value
Operating Transfers In
_. Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

$ 4,705,267.92 $
944,887.53 123,457.36
$ 5,773,612.81 $

356,345,51 . 376,705.87
252,575.64
985,627.02

$ 4,208,370.06 $
219,302.57 159,001.50 159,363,59 120,306.34 386,841.19 105,929.62 337,255.11
1,300.08 6,015.08

480,981.09 50,001,33 53,221.20 3,993.00
6,852.46
379,979.09

$ 5,703,685.14 $

$

69,927.67 $

975,028.17 10,598.85

$

69,927.67 $

1,008,594.13

10.598.85 59,244.25
1,489.46 146.33

FUND BALANCE JUNE 30

-=_ $ 1,078,521.80 $ _ _..7..1...,.4..7..8.89

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

EXHIBIT"B"

CAPITAL PROJECTS
FUND

, DEBT SERVICE
FUND .

TOTALS
(Memorandum Only)
YEAR ENDED JUNE 30,1999 JUNE 30,1998

$ 5,061,613.43 $ 4,469,057.05

376,705.87

259,368.67

$

174,072.84 $

129,161.84

1,248,122.21

878,617.86

2,550.85

378,583.85

378,513.76

$

176,623.69 $

129,161.84 $ 7.065,025.36 $ 5,985,557.34

$

5,986.17 $

0.00 $ 4,695,337.32 $ 4,223,854.62

9,000.00 .. 13,568.03

269,303.90 212,222.70 163,356.59 120,306.34 386,841.19 114,929.62 344,107.57
1,300.08 6,015.08 379,979.09 13,568.03

223,213.04 173,081.70 151,270.69 113,250.33 349,662.34 96,070.35 369,547.45
3,045.38 5,715.22 367,463.74 15,461.26

$

28,554.20 $

0.00 $ 6,707.267.51 $ 6,091,636.12

$

148,069.49 $

129,161.84 $

357,757.85 $ -106,078.78

$ 1,300,000.00 $ 1,300,000.00

$ 1,300,000.00 $
$ 1,300,000.00 $

18,400.00 -18,400.00
0.00

$ 1,448,069.49 $ 0.00

129,161.84 $ 0.00

1,657,757.85 $ 1,067,838.38

-106,078.78 1,181,220.05

1,489.46 146.33

-5,473.59 -1,829.30

$ 1,448,069.49 $

129,161.84 $ 2.727,232.02 $ 1,067,838.38

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CITY OF TRION BOARDOF EDUCATION - c14ATtOOGA COUNTY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUNDBALANCES
BUDGET AND ACTUAL.-.(N0N~GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE30,1999

EXHIBIT"c"

FUND BALANCE JUNE 30, 1999

$ 631,340.13 $ 1,078,521.80

$ 71,053.25 $ 71,478.89

The notesto the general purpose financial statements are an integral part of this statement.
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CITY OF TRION BOARD OF EDUCATION - CHAUOOGA COUNTY
NOTES TO TIlE GENERAL PURPOSE FINANCIAL sTATEMENTs
JUNE 30. 1999

EXHlBIT"D"

Note 1: SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES

REPORTING ENTITY
The City of Trion Board of Education (Board) Was established under the laws of the State of Georgia and
operates under the guidance of a school board 'elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes. Accordingly, the Board is a primary government and consists of all the organizations that compose its legal entity.

FUND ACCOUNTING

The Board uses funds to report on its financial position and the results of its operations. Fund accounting is

designed to demonstrate legal compliance and to aid financial management by segregating transactions related

to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing

set of accounts.

'

General Fixed Assets are recorded as expenditures in the various funds at the time ofpurchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted
accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of
assets acquired by governmental fund types.

Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements.

The general purpose financial statements account for all State, Federal, Taxes and Other funds under control ofthe Board, in compliance with generally accepted accounting principles applicable 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 ofa Board's educational activities. Governmental Fund Types include:

GENERAL FUND - the fund used to account for all financial resources ofthe Board 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 ofspecific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department ofEducation and from the Federal government . to accomplish specific educational objectives.
CAPITAL PROJECTS FUND -the fund used to account for financial resources to be used for the acquisition or construction ofmajor capital facilities.

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CITY OF TRION BOARD OF EDUCATION - CHAuooGA CQUNfY
NOTES TO mE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30;1999

EXHIBIT"D"

Note 1; SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.

BASIS OF ACCOUNTING

The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.

Liabilities which are expected to be financed from available spendable resources are reported as liabilities

in the governmental funds.

'

Governmental funds are accounted for using the modified accrual basis of accounting under which:

Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income.

Expenditures are generally recognized when the related fund ,liability is incurred.

A departure from the above definitions isthe accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 1999, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1998 and ending in early June 1999. Personnel contracts for this employment period specify that compensation
be paid in twelve equal:monthly payments beginning in September 1998 and ending in August 1999. State
grants to fund the State's share ofthese contracts were disbursed from the Georgia Department ofEducation to the Board in the same twelve months. As of June 30, 1999, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 1999, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1999. Also, the State's portion of the compensation paid in July and August 1999was received and recorded as revenue in the fiscal year subsequent to June 30, 1999. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1998, were recorded in the year ended June 30, 1999. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.

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CITY OF TRION BOARD OF EDUCATION - CHATIOOGA COUNTY
NOTES TO TIIE GENERAL PURPOSE FINANCIAL STATEMENtS JUNE 30. 1999

EXHIBIT"D"

Note 1; SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUDGET
The City of Trion Board of Education's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level ofbudget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted . accounting principles.
The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
CASH AND CASH-EQUIVALENTS
COMPOSmON OF DEPOSITS, Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building 'and loan associations.
RECEIVABLES
Receivables consist ofgrant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded. when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
PROPERTY TAXES
The City of Trion fixed the property tax levy for the 1998 tax year (calendar year) on September 20, 1998 (levy date). Taxes were due on December 20. 1998. The lien date for property taxes was January1, 1998. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1999. The City ofTrion City Clerk bills and collects the propertytaxes for the Board of Education and remits the taxes collected to the Board.

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CITY OF TRION BOARD OF EDUCATION - citAIToOGA COJJNfY' NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
.ruNE 30. 1999

EXHIBIT "0"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The tax millage rate levied for the 1998tax year (calendar year) for the City ofTrion. Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

~mills

SALES TAXES

Local Option Sales Tax collectedby the State,remittedto the CityofTrion and forwarded to the Board during the fiscal year amounted to $630,128.27 and was recorded in the General Fund. Local Option Sales Tax is to be used for the maintenance and operation of the Board.

Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. SpecialPurpose LocalOption Sales Tax revenueduringthe fiscalyear amountedto $303,234.68 and was recorded in the Capital Projects and Debt ServiceFunds. The State will terminate collection of this tax once an additional $1,696,765.32 has been collected or on December 31,2003, whichever occurs first.

The City ofTrion (City Government) sold general obligation bonds to provide advance funding for Capital Outlay Projects associated with issuance ofa Special Purpose Local Option Sales Tax (SPLOST).

INVENTORIES
FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined .Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in,first-out). The Boarduses the purchases method to account for inventories of ..purchased foods whereby expenditures .are recorded at the time of purchase. Both the donated food commoditiesinventoryand the purchasedfoods inventory reportedon the balance sheet are equally offset by reservations of fund balance which indicates that they do not constitute "available spendableresources" even though they are a componentofnet currentassets. The Federally assigned value ofdonatedcommodityitems received and consumedhas not been reflected as revenues and expenditures in the general purpose financial statements. To conform to generally accepted accountingprinciples, these amounts should be recorded in the general purpose financial statements.

INTERFUND TRANSACTIONS
The Board has the following types ofinterfund transactions:
Reimbursements ofexpenditures initiallymade from a fund that are properlyapplicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
Operating transfers are recorded for all interfund transactionsother than reimbursements.

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CITY OF IRION BOARD OF EDUCATION - CHATIOOGA CQUNfY -NOrES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30.1999

EXHIBIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING P0J;JCIES

MEMORANDUM ONLY - TOTAL COLUMNS

Totalcolumnson the generalpurposefinancial statements are captioned "Memorandum Only" to indicate that they are presentedonly to facilitate financial analysis. Data in thesecolumns do not presentfinancial position or results of operations in conformitywith generallyaccepted accounting principles. Neither are such data comparableto a consolidation. Interfund eliminations have not been made in the aggregationof this data

Note 2: DEPOSITS

COLLATERALIZATION OF DEPOSITS Official Code of GeorgiaAnnotated (OCGA) Section45-8-12providesthat there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by suretybond, by guarantee ofinsurance, or by collateral. The aggregate of the face value of such surety bond and the marketvalue ofsecurities pledgedshall be equalto not lessthan 110 percentofthe public funds being securedafterthe deductionof the amountofdeposit insurance. OCGASection45-8-11(b) providesan officer holdingpublic fundsmay, in his discretion, waivethe requirement for security in the case of operating funds placed in demand deposit checking accounts.

Acceptablesecurity for deposits consists of anyone ofor any combination of the following:

(1) Surety bond signed by a suretycompanyduly qualified and authorizedto transact business within the State of Georgia,

(2) Insurance on accountsprovided by the FederalDepositInsurance Corporation,

(3) Bonds, bills, notes, certificates ofindebtedness or otherdirectobligations of the United States or of . the State of Georgia,

(4) Bonds, bills, notes, certificates ofindebtedness or otherobligations ofthe counties or municipalities of the State ofGeorgia,.

(5) Bonds ofany public authority created by the lawsof the Stateof Georgia, providing that the statute that created the authorityauthorized the use ofthe bonds for this purpose,

(6) Industrial revenue bonds and bonds ofdevelopment authorities createdby the laws of the State of

Georgia, and

.

(7) Bonds,bills, notes, certificates ofindebtedness, or other obligations of a subsidiarycorporationof the United States government, which are fullyguaranteed by the United States governmentboth as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home

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CITY OF TRION BOARD OF EDUCATioN -cHAtroOGA COUNTY
NOTES TO TIlE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30.1999

EXHIBIT "0"

Note 2: DEPOSITS

Loan Bank, the.Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

CATEGORIZATION OF DEPOSITS At June 30, 1999, the bank balances were $2,663,469.77. The amounts of the total bank balances are classified into three categories of credit risk:

Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities

held by the Board or by the Board's agent in the Board's name.

;.

Category 2 - Cash collateralized with securities held by the pledging financial institution's trust

department or agent in the Board's name.



Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized With

securities held by the pledging financial institution, or by its trust department or agent but

not in the Board's name.)

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

Risk Categoxy

Bank Balance

1

$ 244,649.60

2

577,362.06

3

1.841.458.11

Total

$ 2.663,469,77

Note 3: NON-MONETARY TRANSACTIONS

1

I

The Board receives food commodities from the United States Department ofAgriculture (USDA) for school

breakfast and lunch programs. See Note 1 - Inventories

\

Note 4: RISK MANAGEMENT

The Board is exposed to various risks ofloss related to torts; theft of, damage to, and destruction of assets; errors or omissions; Job related illness or injuries to employees; natural disaster and unemployment compensation.

The Board hasobtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions and job related illness or injuries to employees. The Board has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any ofthe past three years.

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CITY OF TRION BOARD OF EDUCATION - CHA'ITOOGACQUNTY NC>1pS TO TIlE GENERAL PURPOSE FINANCIAL STATEMENTS
ruNE 30, 1999

EXHIBIT"D"

Note 4: RISK MANAGEMENT

. The Board has elected to self-insure for all losses related to allnatural disasters, except flood coverage. The .Board hasnot experienced any losses related to these risks in the past three years.

The Board is self-insured with regard to unemployment compensation claims. The Board accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated.

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

Beginning o f Year
Liability

Claims and
Changes in Estimates

Claims Paid

' -EndofYear
Liability

1998

s

0,00 $

s 0,00

s 0.00

0,00

1999

s

s 0,00

1,934,00 $

s 0,00

1,934.00

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

Position Covered Surerintendent AI Other Employees Note 5: ON~BEHALF PAYMENTS

Amount
s 5,000.00 s 10,000.00

The Board has recognized revenues and expenditures in the amount of $70, 163.62 for health insurance and

retirement Contributions paid on the Board's befby the following State Agencies, .

.

Georgia Department ofEducation Paid to the State Merit System of Personnel Administration For Health Insurance ofNon-Certified Personnel In the.amount of $57,708.62

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 $12,455.00

.

Note 6: COmINQENT LIABlllTIES

Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The Board believes that such disallowances, ifany, will be immaterial to its overall financial position.
.~ 14-

,'1.' ::. ... ,

CITYQF~BQARDQFEDUCATION-cHAIioQGACQUNTY

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

.TUNE 30. 1999

.

EXHIBIT"D"

Note 7: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Board who are covered by IRS are required by State statute to contribute 5% oftheir gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. The required employer Contribution rate is 11.95% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

1999 1998 1997

100% 100% 100%'

$ 483,971.70 $ 430,307.78 $ 388,823.09

'.1 .

...... _----------

- 15 -

CITY OFTRION BOARD OF EDUCATION CHATTOOGA COUNTY COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30,1999

EXHIBIT"E"

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

FEDERAL PROGRAMS

TOTALS JUNE 30, 1999 JUNE 30, 1998

$ 68,271.20 $ 47,842,61

$ 116,113.81 $ 111,118.42

4,153.83 $ 94,793.00

98,946.83

120,270.00

6,088.49 4,060.77

6,088.49 4,060.77

4,599.03 3,914.44

$ 78,4~~,46 $ 51,996.44 $ 94.793.00 $ 225,209.90 $ 239,901.89

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Continuation of Federal Programs For Inventories Food Donated Commodities Purchased Food Unreserved Designated for Equipment Purchases Undesignated
Total Fund Equity

$ 965.60 $
14,404.04

$
13,397.61 34,445.00
4,153.83

50,422.75 $
33,827.01 1,392.12 723.05

$ 15,369.64 $ 51,996.44 $ 86,364.93 $

50,422.75 $
48,190.22 50,241.16
4,876.88
153,731.01 $

108,523.42 26,166.98 45,967.24
180,657.64

$ 6,088.49
4,060.77
10,000.00
42,901.56 $
$ 63,050.82 $

$ 8,428.07 $

8,428.07 $

3,452.69

0,00
0.00 $

0.00
8,428.07 $

6,088.49 4,060.77
10,000.00 42,901.56
71,478.89 $

4,599.03 3,914.44
10,000.00 37,278.09
59,244.25

Total LlabOitiesand Fund Equity

$ 78,420,46 $ 51,996,44 $ 94,793.00 $ 225,209.90 $ 239,901.89

See notes to the general purpose financial statements.

. -16-

CITY OF TRIONBOARD OF EDUCATION - CHATTOOGA COUNTY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUNDBALANCES
SPECIAL,REVENUE FUND . YEAR ENDED JUNE 30 1999

EXHIBIT-P

SCHOOL FOOD
SERVICES FUND

LOTTERY

FEDERAL

PROGRAMS . PROGRAMS

TOTALS YEAR ENDED JUNE 30, 1999 JUNE 30,1998

REVENUES

State Funds Federal Funds Other Funds

$ 31,398,00 $ 324,947,51

$

101,628,92

$ 275,076,95

252,575,64

356,345.51 $, 358,5n.14

376,705,87

224,216.07

252,575,64

259.188.15

Total Revenues

$ 385,602.56 $ 324,947,51 $ 275,076,95 $ 985,627.02 $ 841,981.36 .

EXPENDITURES

Current Instruction SupportServices Pupil Services Improvement of Instructional Services Educational MediaServices Maintenance and Operation of Plant Food ServicesOperation

$ 3'...1~. 8, ,095.05 $ 162,886.04 $

$ 379,979.09

6,852.46

50,001.33 53,221.20 3,993.00

480,981.09 $
50,001.33 53,221.20 3,993.00 6,852,46 379,979.09

445,n3.94
18.12 18,243.45 3,824.00 2,610.94 367,463.74

Total Expenditures

$ 379,979.09 $ 324,947.51 $ 270,101.57 $ 975,028.17 $ 837,934.19

Excessof Revenues over (under)Expenditures

$ 5,623.47 $

0.00 $ 4,975.38 $ 10,598.85 $

4,047.17

OTHER FINANCING SOURCES

Operating Transfers In

18,400.00

Excessof Revenues and Other Financing Sources

over (under) expenditures

$ 5,623.47 $

0.00 $ 4,975.38 $ 10,598,85 $ 22,447.17

FUND BALANCEJULY 1

55,791.56

0.00

3,452.69

59,244.25

44,099.97

Food Inventory- Net ChangeIn Period Donated Commodities Purchased Food

1,489.46 146.33

1,489.46 146.33

-5,473.59 -1,829.30

FUND BALANCE JUNE 30

$ 63,050.82 $

0.00 $ . 8,428.07 $ 71,478.89 $ 59,244.25

See notes to the generalpurposefinancialstatements.

-17 -

, CITYOF TRION BOARD OF EDUCATION -CHAUOOGACOUNIY
COMBINING'BAtANcESHEET
CAPITAIS'FiROJECTSFUND JUNE~30,' 1'999

EXHIBIT"G"

ASSETS Cashand Cash Equivalents Accounts Receivable
Total Assets

BOND PROCEEDS

SPECIAL PURPOSE LOCALOPTION SALESTAX

TOTALS

JUNE 30,1999

JUNE 3D, 1998

$

1,2~2,355.35 $

142,325.45 $ 1,434,680.80 $

0.00

21,136.91

21,136.91

$ 1,292,355.35 $

163,462.36 $ 1,455,817.71 $

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

LIABILITIES AND FUND EQUITY
LIABILITIES .. .- , ~

.Accounts Payable

FUND EQUITY

Fund Balances

ReselVed

'\.

For Purposes of Bond Issue

For SPLOSTProjects

UnreselVed

Undesignated

Total Fund Equity
..

$
$ 1,,292,355.35 $
0.00 $ 1,292,355.35 $

7,748.22 $

7,748,22 .

$ 155,714.14
0.00
155,714,14 $

1,292,355.35 155,714.14
0.00' $
1,448,069.49 $

Totall,iabllities and FundEquity

$ 1,292,355,35 $

163.462.36 $ 1,455,817.71 $

0.00 0.00
0.00

See notesto the generalpurposefinancial statements.

-18-

CITY OF TRION BOARD OF EDUCATION - CHATTOOGA COUNTY COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL pROJECTS FUND YEAR ENDED JUNE 30.1999

EXHIBIT "H"

FUNP BALANCE JUNE 30

$ 1,292,355.35 $

155,714.14 $ 1,448,069.49 $

..0...0-0;~

Seenotesto the general purpose financial statements.

-19-

CITY OF TRION BOARD OF EPUCATION - CHATIOOGA COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENPEDJUNE 30. 1999

FUNDING AGENCY " PROGRAM/GRANT

"
CFDA
NUMBER

PASSTHROUGH
ENTITY 10
' NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Agriculture, U. S. Departmentof Child Nutrition Cluster Pass-Through From GeorgiaDepartmentof Education Food and Nutrition Program Food Services School BreakfastProgram 1999 Grant National School Lunch Program 1999 Grant

10.553 10.555

NJA $ NJA

14,013.72 87,615.20 $

(2) 379,979.09 (3)

Total Child Nutrition Cluster '

$

101,628.92 $

379,979.09

Other Programs

Pass-Through From Georgia Departmentof Education

Food and.NutritionProgram

Food DistributionProgram

10.550

NJA

(1)

(1)

Total U. S. Departmentof Agriculture

$

101,628.92 $

379,979.09

Education, U.S. Departmentof Special EducationCluster ' Pass-Through From Georgia Departmentof Education Individualswith DisabilitiesEducation Ad. Part B - Special Education Flow Through 1999 Grant Preschool 1999 Grant CapacityBuilding Improvement 1999 Grant

84.027 84.173 84.173

NJA $ NJA NJA

58,650.00 $ 9,450.00 3,188.00

58,650.00 9,450.00 3,188.00

Total Special EducationCluster

$

71,288.00 $

71,288.00

Other Programs

, Pass-Through From,Georgla Departmentof Education

Elementaryand SecondaryEducationAd.

Title I

Grants to Local Educational Agencies

1998 Summer

84.010

NJA

1999 Grant

84.010

NJA

1999 Summer

84.010

NJA

TiUe II

EisenhowerProfessional Development

1999 Grant

84.281

NJA

TiUeVi

Innovative EducationProgram Strategies

1999 Grant

84.298

NJA

TiUeX

Public Charter SChools

1999 Grant

84;282

NJA

22,019.00 5,000.00
17,n6.95
3,993.00
100,000.00

3,452.69 22,019.00
3,182.67
'17,n6.95
3,993.00
93,389.26

20

't,"
CITY OF TRION BOARD OF EPUCATION CHATTOOGA COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE30; 1999

SCHEDULE -1-

FUNDING AGENCY PROGRAM/GRANT
Education, U. S. Department of Other Programs Pass-Through From Georgia Department of Education Goals 2000 State and Local Education Systemic Improvement Grants 1999 Grant
Vocational Education BasicGrantsto States
Tech-Prep Education 1999 Grant
Total U. S. Department of Education

CFDA NUMBER

PASSTHROUGH
ENTITY .
10 NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

84.276 84.243

N/A $

50,000.00 $

50,000.00

NJA $

5,000.00 275,076.95 $

5,000.00 270,101.57

Total FederalFinancial Assistance

$

376,705.87 $

NJA = Not Available

Notesto the Schedule of Expenditures of Federal AwardS
(1) Commodities valued In the amountof $13,801.80 were received duringthe currentfiscalyear
and were not recorded In the Board'sfinancial statements. (2) Expenditures for the SchoolBreakfast Program were not maintained
separatelyand are Induded In the 1999 National School LunchProgram. (3) Expenditures for this programIndude State,and/orOtherFunds.
Expenditures are not maintained by fund source.
r) Major Programsare Identified by an asterisk In front of the CFDAnumbel:.

The Board did not provide Federal Assistance to any Subreclpient

The accompanying scheduleof expenditures of Federal awards Includes the Federal grant aetMtyof the City of Trion Board of Education and Is presented on the modified accrual basisof accounting which Is the basis of accounting used in the presentation of the general purpose financial statements.

650,li0iO8iIO0_.6_6

See notes to the general purposefinancial statements.

- 21 -

.----------------------~---~------------~~.-~~-~-~~~-~~

CITY OF TRION BOARD OF EDUCATION - CHATIOOGA COUNTY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30,1999

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Quality Basic Education General and career Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost . Middle School Incentive Program In-School Suspension Counselors Grades 4 and 5 Technology Specialist Local Five Mill Share Educational Equalization Funding Grant Food Services Other State Programs At-Risk Summer School Program Health Insurance Innovative Programs Preschool Handicapped Program Remedial Summer School Program Student Record Count Year 2000 Project Grant Lottery Programs Computers in the Classroom
Office of School Readiness . Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement
CONTRACT Education, Georgia Department of Reading First Program

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 3,036,250,00 341,608.00 44,432,00 122,388,00 31,211.00 785,351.00 111,137.00 47,037.00 12,002,00 28,842,00 -360,723.00 366,649.00 $
1,922.79 57,708.62
5,000.00 18,753.00 2,166,01
925,50 14,992.00

$ 31,398.00 24,763.00

3,036,250,00 341,608,00 44,432,00 122,388.00 31,211.00 785,351,00 111,137.00 47,037.00 12,002.00 28,842.00 -360,723.00 366,649.00 31,398.00
1,922.79 57,708.62
5,000.00 18,753.00 2,166.01
925.50 14,992.00
24,763.00

300,184.51

300,184~51

12,455.00

12,455.00

25,161,00

25,161.00

$ 4,705,267,92 $

356,345,51 $ 5,061,613.43

See notes to the general purpose financial statements.

- 22-

CITY OF TRION BOARD OF EDUCATION - CHATIOOGA COUNTY SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30.1999
(1) The Board's originalcost estimateas specified In the resolution calling for the Imposition of the LocalOption Sales Tax.
(2) The Board'scurrentestimate of total cost for the projects: Includes all cost from projectInception to completion. (3) The votersof the City ofTrion approved the Imposition of a 1% salestax to fund the aboveprojectand retire
associated debt. Amounts expended for this projectmay Include salestax proceeds, state,.local property taxes and/orother funds over the life of the project.

see notesto the generalpurpose financial statements.

-23-

CITY OF TRION BOARD OF EDUCATION - CHATTOOGA COUNTY SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS
YEAR ENDED JUNE 30, 1999

SCHEDULE "4"

EXPENDITURES
Current Instruction Support Services Maintenance and Operation of Plant

COMPUTERS IN THE
CLASSROOM

PRE-KINDERGARTEN PROGRAM

TOTAL

$

24,763,00 $

293,332.05 $ 6,852.46

318,095.05 6,852.46

Total Expf\tnditures

$

24,763.00 $

300,184.51 $ .324,947.51

RECAP: Salaries and Benefits Pre-Kindergarten Program Other Expenditures Computers in the Classroom Pre-Kindergarten Program

$

271,893.59

24,763.00 28,290.92

$

324,947.51

See notes to the general purpose financial statements.

-24-

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

SCHEDULE -5-

Minimum Expenditure Requirements (Total Allotment) Expenditures on Combined Program Basis
Salaries Operations
Less: Expenditures for Media Center Programs in Excess of Total Media Allotment
Expenditures per AUclit
Amount of Underexpenditure for Total Allotment

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$

3,544,678,00 $

106,924,00

$

4,006,969,23

197.400,03 $

$

4,204,369.26

173,321.53

-35,144.42 $ _ _4...,:1.L6.9:.,:2=2::4".=8:'4;"

$

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

See notes to the general purpose financial statements, ,,25 -

CITYOF TRION BOARD OF EDUCATION - CHATTQQGA COUNTY ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS
YEAR ENDED JUNE30, 1999

SCHEDULE -6"

EDUCATION TOTAl
REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAl

AMOUNT OF UNDEREXPENDITURE
. FORREQUIRED ALLOTMENT

$

276,026.40 $

290,154.73 $

13,459.96 $

303,614.69

740,675.70

724,456.28'

30,757.45

755,213.73

$ 1,016,702.10 $ 1,014,611.01 $

44,217.41 $ 1,058,828.42 $

0.00

321,647.40

493,327.73

17,964.01

511,291.74

0.00

600,456.60

733,395.98

14,902.91

748,298.89

0.00

360,314.10

522,492.72

51,768.54

574,261.26

0.00

249,402.60

367,676.90

9,615.57

3n,292.47

0.00

184,102.20

234,583.54

24,575.02

259,158.56

0.00

$ 2,732,625.00 $ 3,366,087.88 $

163,043.46 $ 3,529,131.34

$

275,027.40

$

5,489.09 $ 14,309.65 246,485.27 14,399.82

238.00 $ 719.39 4,565.10 443.06

5,727.09 15,029.04 251,050.37 14,842.88

$

275,027.40 $

280,683.83 $

5,965.55 $

286,649.38

0.00

32,419.80

93,602.31

3,768.16

97,370.47 .

0.00

$' 307,447.20 $

374,286.14 $

9,733.71 $

384,019.85

$

39,988.80 $

133,141.29 $

544.36 $

133,685.65

0.00

$ 3,080,061.00 $ 3,873,515.31 $

173,321.53 $ 4,046,836.84

$

88,514.10 $

133,453.92

$

133,453.92

0.00

24,039.00

$

24,078.50

24,078.50 .

0.00

$

112,553.10 $

133,453.92 $

24,078.50 $

157,532.42

$ 3,192,614.10 $ . 4,006,969.23 $

197,400.03 $ 4.294,369.26 $

0.00

$

9,856.00

21,355.00

31&11.00

$

28,464.02 $

28,464.02

2,790.98

2,790.98

$

31,255.00 $

31.255.00 $

. . .0...0.0.

- 27

SECI10Nn COMPLIANCE AND INTERNAL CONTROL REPORTS

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
May 10, 2000

. Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education . and Superintendent and Members of the City of Trion Board of Education
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORIING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of City of Trion Board of Education as of and for the year ended June 30, 1999, and have issued our report thereon dated May 10, 2000. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We conducted our audit in accordance with generally accepted auditing
standards and the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General ofthe United States.
Compliance
As part of obtaining reasonable assurance about whether City of Trion Board of Education's financial statements are free ofmaterial misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination offinancial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and accordingly, we do not express such an opinion. The results
are of our tests disclosed no instances of noncompliance that required to be reported under GoYernment
Auditing Standards.
Internal Control OYer Financial Re,porting
In planning and performing our audit, We considered City ofTrion Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation
99YB-40

that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in our judgement, could adversely affect City of Trion Board of Education's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FS-7911-99-01.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course ofperforming their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, the reportable condition noted above is considered to be a material weakness.
This report is intended solely for the information and use ofmanagement, members ofthe City ofTrion Board of Education, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,

RWH:gp 99YB-40

Rus ell W. Hinton State Auditor

RUSSELL W. HINTON
STATEAUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, s., Suite 214
Atlanta, Georgia 30334-8400
May 10, 2000

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members of the State Board of Education
and Superintendent and Members ofthe City ofTrion Board ofEducation
REPORT ON COMPLIANCE WITH REQUIREMENTS APPUCABLE TO EACH MAJOR PROGRAM AND INTERNALCONTRQL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of City of Trion Board of Education with the types of compliance requirements described in the U.S. Office ofManagement and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 1999. City of Trion Board of Education's major Federal programs are identified in 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 Trion Board of Education's management. Our responsibility is to express an opinion on City of Trion Board of Education's compliance based on our audit.
We conducted our audit of compliance in accordance with generally accepted auditing standards; the
standards applicable to financial audits contained in GoYernnlent Auditing Standards, issued by the Comptroller General ofthe United States; and OMB Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform
the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the City ofTrion Board ofEducation's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination oil City of Trion Board of Education's compliance with those requirements.

99SA-I0

In our opinion, the CityofTrionBoardofEducation complied, in all material respects, with the requirements referred to abovethat are applicable to eachofits majorFederal programs for the year ended June 30, 1999..

Internal Control Oyer Compliance

The management ofCityofTrionBoardofEducation is responsible for establishing andmaintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicableto Federal programs. In planningand performing our audit, we considered City of Trion Board ofEducation's internal control over compliancewith requirements that could have a direct and material effect on a major Federalprogramin order to determine our auditing procedures for the purpose of expressingour opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A133.

Our considerationof the internal control over compliance would not necessarilydisclose all matters in the internal 'control that might be material weaknesses. A materialweakness is a condition in which the design or operation ofone or more ofthe internal control components doesnot reduce to a relatively low level of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relationto a major Federal program being auditedmay occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal controlover compliance and its operation that we consider to be material weaknesses.

This report is intendedsolelyfor the information and use of management, members of the CityofTrionBoard ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specifiedparties.

RWH:gp 99SA-1O

Respectfully submitted,
~.oo.ll).4 Russell W. Hinton State Auditor


SECfIONm AUDITEE'S RESPONSE TO PRIORYEARFINDINGS AND QUESTIONED COSTS

; . ;:

CITY OF,TRION BOARD OF EDUCATION - CHATIOOGA COUNTY

AUPITEE'S RESPONSE

SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS

YEAR ENDED JUNE 30. 1999

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PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-7911-97-01 FS- 7911-98-01

Further Action Not Warranted Unresolved - See Corrective Action/Responses

CORRECTIVE ACTIONIRESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7911-98-01

Due to current staffing limitations and budgetary considerations prohibiting the hiring of additional

administrative staff, the Board has decided not to pursue the recording of general fixed assets on

the financial statements. :

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SECTIONlV FINDINGS AND QUESTIONED COSTS

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CITY OF TRION BOARD OF EDUCATION - CHAIIOOGA COUNTY
SCHEDULE OF ElNDINGS ANDQUESTIONED COSIS
YEAR ENDED JUNE 30. 1999
I SUMMARY OF AUDITOR'S RESULIS
1. I}!pe of Report Issued on the Financial Statements Ihe auditor's opinion on the City of Irion Board of Education's financial statements was qualified for various departures from generally accepted accounting principles.
2. Reportable Conditions in Internal Control Disj;losed by the Audit of the Financial Statements The audit report for the City of Irion Board of Education disclosed a financial statement reportable condition related to the following control category.
General Fixed Assets
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The reportable condition described above is considered to be a material weakness.
3. Noncompliance Material to the Financial Statements The audit ofthe City ofIrion Board of Education disclosed no instances ofnoncompliance that were deemed to be material to the financial statements,
4. Reportable Conditions in Internal Control Over Mwor Programs The audit report for the City ofIrion Board ofEducation did not disclose any reportable conditions in internal control over major programs.
5. upe ofRe.port Issued on Compliance for Major Programs The auditor's opinion on the City of Irion Board of Education's report on compliance with requirements applicable to major programs was unqualified.
6. Audit Findinss ReQuired to be Re.portedby Section ,510(3) ofQMB Circular A-133
The City of Irion Board of Education's audit did not disclose audit findings required to be reported by section .51O(a) ofOMB Circular A-133.
7. MmorPrograms
Federal awards audited as major programs are as follows:
10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program
8. I}!pe "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
9. Low Risk Auditee The City ofIrion Board ofEducation did not qualify as a low risk auditee as defined by Section .530 ofOMB Circular A-133.
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. CITY OF TRION BOARD OF EDUCATION - CHAIIOOGA COUNTY
, SCHEDULE OF FINDINGS'AND QUESTIONED COSTS
YEAR ENDEDJUNE 30. 1999

IT ,FINANCIAL ST.ATEMENT FINDINGS AND QUESTIONED COSTS

GENERALFIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: 'FS-7911-99-0l

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The City ofTrion Board ofEducation did not maintain a system-wide GeneralFixed Assets Account Group

within the formal accounting records as required by generally accepted accounting principles. This condition

results in the generalpurpose financial statements ofthe Boardbeingincomplete and not in accordance with

generally accepted accounting principles. Appropriate action should be taken by the Board to establish

accounting controls and procedures to provide for maintenance of a GeneralFixed Assets Account Group.

These subsidiary records shouldincludean inventoryof land, buildingsand equipmentowned by the Board

and should include, but may not be limited to, date acquired,'acquisition cost, estimated replacementcost.

locationand description. Detailedrecords shouldbe maintained ofall additions and deletions to the General

Fixed Assets Account Group.

m FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

No matters were reported,

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