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

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REPORT._QN AUDIT .

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THE'FISCALiYEAR ..

ENDED

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CITY OF VALDOSTA ROA RD OF EDUCATION - LOWNDES 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-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

6

D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

7

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

18

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

20

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

22

11

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

23

SCHEDULES

I SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

24

2 SCHEDULE OF STATE REVENUE

26

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

29

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

30

5

BY SITE

31

CITY OF VALDOSTA BOARD OF EDUCATION - LOWNDES COUNTY -TABLE OF CONTENTS-
SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-I33
SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

R11,sH I W. H1:sm:s
STATE AUL"! TOR
(404) 656-217.S

DEPARTMENT OF AUDITS AND ACCOUNTS
2~4 WJ,hinglon :,1,ce1, SW Suuc 214 AIIJnlJ, Georg1J 10334-8400
June S. 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Supcnntendent and Members of the City of Valdosta Board ofEducauon
INDEPl:NDENT 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 ~tatements of the City of Valdosta 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 rcsponsib1hty of the City of Valdosta Board of Educat10n's management Our rcspons1b1hty 1s to express an op1mon on these general-purpose financial statements based on our audit
Except as discussed in the following paragraph, we conducted our audit in accordance with auditing ~tandards generally accepted in the Umted States of Amenca and the standards applicable to financial audit~ contained m Government Aud1tmg Standards, issued by the Comptroller General of the Um ted States Those standards reqmre that we plan and perform the audit to obtain reawnable assurance about whether the financial statements are free of matenal misstatement An audit includes examining, on a tesl basis, evidence supporting the amounts and disclosures in the financial statements An audit also includes assessing the accounting pnnc1ple~ used and s1gmficant estimates made by management. as well as evaluating the overall financial statement presentation We believe that our audn provides a reasonable b~1s for our opin10n
We did not observe the taking of either the Federal donated commocht1es inventory or purchased foods inventory at June 30. 2002. nor could we satisfy ourselves as to the accuracy of the amount~ stated as inventones through alternative procedures

2002ARL-\3

As described m the notes to the general-purpo~e financial statements, the Board of Education's financial statements have been prepared usmg certam accountmg pracllce~ and pohc1es which, in our opinion. vary in some respects from generally accepted accounting principles The~e variances are de~cn bed as follows
The general-purpose financial statements of the Board of Educallon did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting principles
School act1v1ty accounts maintained at the ind1v1dual schoob arc not included in the general-purpose financial statement~ To conform to generally accepted accountmg principles, these accounts should be mcluded in the general-purpose financial statements
The Board of Education did not recognize as expenditures, m the year ended June 30. 2002. a portion of salancs and the corresponding employer's co~t of related benefits earned for contractual services completed prior to June 30. 2002. Also funds received. subsequent to June 30. 2002. from the Georgia Department of Educatmn for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review Conversely. the s1m1lar expenditures and related revenues for contractual services completed prior to June 30, 200 I, were improperly recorded in the year ended June 30. 2002 To conform to generally accepted accounting principles, revenues should be recorded when available and measurahle and c'\pend1tures should be recorded when incurred. rather than when funds are received or disbursed
The aggregate effects on the general-purpose financial ~tatemcnts of these vanances or om1ss1ons have not been determined. but are believed to be material
In our op1mon. except for the effects of such adjustments. 1f any, on the Special Revenue fund. as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy of the food service mventones as discussed in the third paragraph. and except for the effect\ on the general-purpose financial statements of the matters referred to m the preceding paragraph. the general-purpose financial statements referred to above present fairly, m all material respecb. the financial po~1t1on of the City of Valdosta Board of Education as of June 30. 2002. and the results of its operat10ns for the year then ended, m conformity with accounting principles generally accepted m the Umted States of Amenca
In accordance vmh Government Auditing Standards. we have also issued our report dated June 5. 2003. on our consideration of the City of Valdosta Board of Education's mtemal control over financial reporting and our tests of 11> compliance with certain prov1~1ons of laws, regulations. contracts and grants That report 1s an mtegral part of an audit performed m accordance with Government Aud1tmg Standards and should be read in con1unct1on with this report m con~1dering the re~ult~ of our audit
2002ARL-13

Our audit was perfonned for the purpose of fonning an op1mon on the general-purpose financial statements of the City of Valdosta Board of Education taken a~ a whole The accompanying combmmg statements (Exh1b1ts E through H) and the financial schedules (Schedules I through S). which includes the Schedule of Expenditures of Federal Awards a!> reqmred by U S Office of Management and Budget Circular A-133, 4udlls of States, Local Governments, and Non-Pro/ii Orgam=atwm are presented for purpo,e, of add1t1onal analysis and_ arc not a required part of the general-purpose financial statements Such mfonnat1on has been subjected to the aud1tmg procedures apphed in the audit of the general-purpose financial statements and m our opm1on, except for the effect ofadJustments. 1fany, on the Special Revenue Fund. as might have been detennmed to be necessary had we been able to satisfy ourselves as to the accuracy of the food service inventories as d1scu,se<l m the thtrd paragraph, and except for the effects of the matters reterred to m the fourth paragraph. such mfonnauon 1s fairly stated, mall material respects. m relation to the general-purpose financial statements taken as a whole
A copy of1h1s report has been filed as a pennanent record m the office ofthe State Auditor and made availahle to the press of the State, as provided for by Official Code ofGeorgia Annotated Section 506-24
Respectfully submitted,
w.~
Hmton State Auditor
RWHas 2002ARL-13

CITY OF VALOOSTA BOARD OF EDUCATION - LOWNDES COUNTY

CIJY Of VALDOSTA BOARD Of EP\JCATION - LOWNDES COUNTY
COMBINED BALANCE SHEET
ALL FUND TYPES
JUNE 3Q 2002

ASSETS
Cash and Cash Equrvalents Investments Accounts Race,vabla Prepaid Items lnventones
Con&umable Supples Food
Donated Commodrt,ea Purchased Food
TotalAssell

GOVERNMENTAL FUND

SPECIAL

GENERAL

REVENUE

FUND

FUND

s 6,858,031 63 $ 318,404 12

7188

28563

250,677 78

924,997 14

79,999 75

110,10701 85 976 87

s 7,188,781 04 $ 1439 770 77

LIABILffiES AND FUND EQUITY
LIAB!LffiES
Cash OVerdraft Accounts Payable Salaries Payable Short-Term Debt Expired Grant Balances Payable Deferred Revenue
Total Llab:lrtles
FUND EOUIJY
Fund Balances Reserved For Bus Replacement Funds For lnventones Consumable Supplies Food Donated Commodlbes Purchased Food For SPLOST Ptojocts Unreserved Das:gnated for Sett~nsurance Undleslgnated
Total Fund Equity

$

49 874 91 $

4,620,000 00

208000
s 4 671 954 91 $

106,490 74 408,385 42
2,435 83 41 960 13
559,272 12

$

70 602 66

79,999 75

s 11010701
85 976 87

100,000 00 2,266 223 72

684 414 77

$ 2 516 826 13 s 880498 65

Total L:abtlrt:ea and Fund Equity

$ 7 188 781 04 S 1 439 770 77

The notes to the general-purpose flnanclal statements are an integral part of ttus statement -2-

EXHIBIT"A"

TYPES CAPITAL
PROJECTS FUND

TOTALS

(Memorandum Only)

JUNE 30. 2002

JUNE 30, 2001

s s 9 075,355 65

16,251,79140 $ 1,820,622 95

1,317,886 73

1,318,244 24

19,368,137 94

1,285,11949

2 460,794 41

2 224,026 60

29 825 07

79,999 75
110,10701 85 976 87

88,845 30
112,236 85 8548653

S 11,678,361 87 $ 20,306,913 68 $ 23 729181 24

$

293,977 77

$

12 20 $

156,377 85

694,257 29

408,385 42

412,188 57

4 620,000 00

4,740,000 00

2,435 83

150 00

44 040 13

37 900 12

$

12 20 $ 5 231 239 23 $ 6178453 75

$

70,602 66 $

584,609 52

79,999 75

88,845 30

$ 9,477 796 36

110 107 01 85,976 87 9 477,796 36

112,236 85 85,486 53 11,458,952 86

2,200,553 31

100,000 00 5151 191 80

100,000 00 5 120 596 43

$ 11678 34967 $ 15,075,674 45 $ 17 550727 49

S 11678361 87 S 20,306,913 68 $ 23:729, 181 24

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CITY Of VALDOSTA BOARD OF EDUCATION LOWNDES COUNTY
COMBINED STATEMENT OF RE\/ENUES EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30 2002

REVENUES
State Funds Federal Funds TIIX88 Other Funds
Total Revenues
EXPENDITURES
Current lnstrudion Support Services Pup! Serv11:es Improvement of lnstrudlonal Services Educational Media SeMces General Adm1mstrabon School Administration Business Adnnnlstratton Ma1n1enance and Operabon of Plant Student Transportabon Serv,ces Central Support Services Other Support Services Food SeMC8!1 Operation Enterpnse Operallons
Capital Outtay
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES /USES!
Operabng Transfera In Operabng Transfers Out
Total 01her Flnanang Sources (Uses)
Excess of Revenues and Other F1nancmg Sources over (under) Expenditures and Other F1nanang Uses
FUND BALANCE JULY 1
Food Inventory - Net Change 1n Penocl Donated Commodities Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

$ 27,273,037 28 $ 58,612 43
11,746,66013 628,66697
s s 39,907,176 81

390 749 00 6,719,184 47
807 227 27
7.917180 74

$ 28,249 822 99 $
1,403 419 82 1,030,854 52 1,012,326 08
325,180 52 2,619,590 98
751,084 10 3,088,421 61 1533458 95
43,681 92 138 109 67
63980

3 551,966 20
193,701 01 283,347 31
10,339 98 173,703 02 39,042 98
93,354 83
370,296 91 2,832,020 34
439,826 79

$ 40,196,390 76 $ $ -289,213 95 $

7,987,599 37 -70 438 83

$

$

-8 616 73

$

-8 616 73 $

8 816 73 8 618 73

$ -297,830 68 $ 2,814 656 81

-81,821 90 943,960 05

-2 129 84 49034

FUND BALANCE JUNE 30

$ 21s1s182813 s ___sa=o,.,4_98=65._

The notes to Iha general-purpose financial statements are an integral part of tins statement . 4.

EXHIBIT "B"

CAPITAL PROJECTS
FUND

-TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

s s 27,663,786 28

26,818,786 43

6,777 796 90

5 781,423 04

$ 7,390,530 04

19,137,39017

18 874,85715

344 068 26

1,979,962 50

4 014 913 95

$ 7 734 598 30 $ 55,558,935 85 $ 55,289,980 57

s 31,801,78919 $ 29,881,513 88

$ 9,648,359 26

1,597,120 83 1,314,001 83 1,022,686 06
498,883 54 2,658 633 96
751 084 10 3,088 421 81 1,626,813 78
43,681 92 508,406 58 2,832,859 94 439,826 79 9,848,359 26

1,441,84049 1333887 78 1 003,801 20
458,901 71 2,671,370 86
811,690 73 3,184,048 14
996,028 53 38,696 03
211,343 78 3,043,594 71
319,044 09 1 751 933 84

s $ 9,848,359 26

58,032,349 39 $ 47127 695 73

s s -2, 113,760 96 $ -2 473 413 54

8,162,284 84

s

8,616 73

-ll 616 73

s

000

$ -2,113,76096 $ -2,473,413 54 $

13,792,11063

17,550,727 49

8162 284 84 9,374,924 11

-2129 84 49034

-7 929 29 21 447 83

$ 1167834967 $ 1507587445 $ 1755072749

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CITY OF '{ALOOSTA BOARD OF EDUCATION - LOWNDES COUNTY
COMBINED STATEMENT OF ReyENUEs EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGE! AND ACTUAL - tNON-GAAP BASIS) GENERAL AND SPECIAL RE\IENUE FUNDS
YEAR ENDED JUNE 30. 2002

EXHIBIT "C"

GENERAL FUND

BUDGET

ACTUAL

RE'IENUES
State Funds
Federal Funds T.,.,. Other Funds
Total R8Y811ues

s s 27,063 824 14

27,273,037 28

110,288 00

58,612 43

11,685,11000

117-46,86013

529,347 00

828,666 97

s s 39 388 587 14

39,907,176 81

E~P~NDIIURES
Current Instruction Suppor1SeMces Pup,IServlces lmprovemen1 al Instructional Services Educational Media Services General Administration School Admlnlllnltion Bullness AdmlnlslratK>n Maintenance and Operabcm of Plant Studen1 Transpor1Bb0n Seivices Central Suppor1 Services Other Suppor1 Servlcea Food SeMces Operation Enlerprtse Operabans
Capital Outlay
Total Expenditures
Excess al R...,,ues fNf!lf (under) ~

s s 27,886,069 40

28 249,822 99

1,311,063 07 1,161915-46 1 022 891 89
360 587 01 2 700 644 96
739 926 11 3,403 588 55 1,592,449 85
177,100 02 28 338 00

1 403419 82 1,030,654 52 1,012,326 06
325 180 52 2,619,590 96
751,064 10 3 068,421 61 1 533,458 95
43,681 92 138,109 67
83960

10 412 00

s s 40,394,966 32

40,196,390 78

s s -100639918

-289.213 95

OTHER FINANCING SOURCES rUSESl

OlherSoun:es Other Uses
Total Other Financing 5ouR:e& (U...)

s

-6 616 73

s

-6 616 73

Excess of Revenues and Other Financing Soun:es over (under) Expenditures and Other Fnanong Uses

s -1,006 399 18 s

-297,830 88

FYND BALANCE Jl,!6Y l 2001

2,713,347 25

2,814,858 81

Adjustments
Food lnventcry - Net Change mPeriod
Dona1ed CommodPurchased Food

414 89

FUND BALANCE JUNE 30 2002

S 1:701,362 96 S 2,516.82613

SPECIAL REVENUE FUND

BUDGET

ACTUAL

s s 378,295 78

390 749 00

6,58846023

8 719 184 47

823,109 07

807,227 27

s s 7,799,885 06

7 917160 74

s s 3,886,853 15

3 551 966 20

1n.901 91 275 224 94
6,579 00 18198200
23,450 00

193 701 01 283 347 31
10 339 98 173.703 02
39 042 98

84,487 00 2,500 00
84,217 00 3,049 371 07
260,54000

93 354 63
370 296 91 2 632 020 34
439 826 79

s s 7,787,912 07

7,987.599 37

s s 11.952 99

-70 438 83

s s 11,00000

8,616 73

s 1100000 s

8616 73

s s 22,952 99

-61 821 90

918,918 15

943,960 05

14 921 69

-2 129 84 490 34

S 954 792 83 S 680 498 85

The notes to the general-purpose finanaal statement& are an integral part of this statement -6 -

CITY OF VALDOSTA BOARD OF EDUCATION LOWNDES COUNTY
NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30. 2002

EXHIBIT"D"

Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The City of Valdosta Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The School District is orgaruzed as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity Accordingly, the School D1stnct 1s a pnrnary government and consists of all the organizat10ns that compose its legal entity
FUND ACCOUNTING
The School D1stnct uses funds to report on its financial position and the results of its operations fund accountmg 1s designed to demonstrate legal comphance and to aid financial management by segregatmg transactions related to certam governmental functions or actlVIties. A fund 1s a separate accounting entity with a self-balancing set of accounts.
General Fixed Assets are recorded as expenditures m the various funds at the time of purchase A General Fixed Assets Account Group 1s not presently maintamed by the School District To confonn to generally accepted accounting principles, a General Fixed Assets Account Group should be maintamed for reportmg the cost of assets acqmred by governmental fund types
Although "school act1v1ty accounts" are maintained at the ind1v1dual 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 confonn to generally accepted accounting principles, these accounts should be recorded m 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, m 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 of the School District's educational act1v111es Governmental Fund Types mclude
GENERAL FUND - the fund used to account for all financial resources of the School District except those required to be accounted form another fund These transactions relate to resources obtained and w,ed for services provided by a board of educat10n.
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for ma1or capital projects) that are legally restricted to expenditures for specified purposes These funds are received pnmarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives

-7-

CITY OF VALDOSTA BOARD OF EDUCATION - LOWNDES COUNTY NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNF 30. 2002

EXHIBIT"D"

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the
acqmsnion or constructton of maJor capital fac1hties
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determmed 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 hab1lities generally are included on the balance sheet. Operating statements ofthese 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 1s considered a measure of available spendable resources
L1ab1littes which are expected to be financed from available spendable resources are reported as hab1httes in the governmental funds.
Governmental funds are accounted for using the modified accrual basis ofaccounting under which
Revenues are recogruzed when susceptible to accrual (i.e., when they become both measurable and available) "Measurable" means the amount of the transaction can be determined and "available" means collecttble within the current period or soon enough thereafter to be used to pay liabilittes of the current penod The School D1stnct considers receivables collected within sixty days after yearend to be available. Property taxes, sales taxes and interest are considered to be susceptible to accrual Jlionexchange transactions, in which the School D1stnct gives (or receives) value without directly receiving (or givmg) equal value m exchange, include property taxes, local opt10n sales taxes, mtergovernmental grants and donations Revenue for property taxes is recogmzed m the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accrual Revenue from grants and donations 1s recognized in the fiscal year in which all eligibility reqmrements have been satisfied.
Expenditures are generally recognized when the related fund liability 1s mcurred.
A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts During fiscal year 2002, a substanttaJ number ofpersonnel ofthe School D1stnct were employed for a one hundred and ninety day period beginning in August 2001 and ending in early June 2002. Personnel contracts for th1~ employment penod specify that compensation be paid in twelve equal monthly pa:,,ments beginning in September 200 I and endmg m 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 m the same twelve months. As of June 30, 2002, compensauon under these employment contracts had been earned, but two ofthe twelve monthly payments, due for July and August 2002, had not been made Payments for these two mvnths were made and recorded as expenditures by the School District subsequent to June 30, 2002 Also, the State's portion of the compensation paid in July and
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CITY OF VALDOSTA BOARD OF EDUCATION LOWNDES COUNTY NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002

EXHIBIT "D"

Note I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
August 2002 was received and recorded as revenue m the fiscal year subsequent to June 30, 2002. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2001, were recorded m the year ended June 30, 2002. Generally accepted accounting
principles require that revenues be recorded when available and measurable and that expenditures be
recorded when mcurred, rather than when funds are received or disbursed
BUDGET
The City of Valdosta Board of Education's budget 1s a complete financial plan for the School D1stnct's fiscal year and is based upon estimates of expenditures together with probable fundmg sources There is no statutory prohibition regardmg overexpenditure of the budget at any level The budget for all governmental funds 1s 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 principles
The budget process begins when the School D1stnct's admm1stration prepares a tentative budget for the Board's approval. After approval ofth1s tentative budget by the Board. such budget 1s advertised at least once ma newspaper of general c1TCulat10n m the locality. At the next regular meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget This final budget 1s then submitted, in accordance with prov1s10ns of the Quality Basic Education Act, OCGA Section 20-2-167(c), to the Georgia Department of Educat10n. The Board may mcrease or decrease the budget at any lime dunng the year All unexpended budget authority lapses at fiscal year-end
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of cash on hand, demand deposits and short-term mvestments With ongmal maturities of three months or less from the date of acquis1t10n m authonzed financial mst1tut10ns. Georgia Laws OCGA 45-8-14 authonze the School D1stnct to deposit its funds m one or more solvent banks or insured Federal savings and loan associat10ns
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the School Distnct m nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost Part1c1patmg interest-eammg contracts and money market mvestments With a maturity at purchase of one year or less are reported at amortized cost. Both part1c1pating interest-eammg contracts and money market mvestments With a maturity at purchase greater than one year are reported at fair value The Official Code ofGeorgia Annotated Section 36-83-4 authonzes the School D1stnct to invest its funds and in selectmg among options for investment or among mst1tut10nal bids for deposits, the highest rate ofreturn shall be the obJective, given equivalent conditions of safety and liquidity Funds may be invested in the following
-9-

CITY OF VALDOSTA BOARD OF EDUCATION - LOWNDES COUNTY
NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002

EXHIBIT"D"

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(I) Obligauons issued by the State of Georgia or by other states,

(2) Obligations issued by the United States government,

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

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

(5) Pnme banker's acceptances,

(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Sel'Vlces,

(7) Repurchase agreements, and

(8) ObhgatJons of other political subdivisions of the State of Georgia

RECEIVABLES

Receivables consist of grant reimbursements due on Federal. State or other grants for expenditures made but not reimbursed and other receivables disclosed from mformation available Receivables are recorded when either the asset or revenue recognition cnteria 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 Lowndes County Board of Commissioners fixed the property tax levy for the 200 I tax digest year (calendar year) on October 20, 2001 (levy date) Taxes were due on December 20, 2001 (hen date) Taxes collected withm the current fiscal year or withm 60 days after year-end on the 2001 tax digest are reported as revenue m fiscal year 2002 The Lowndes County Tax Comm1ss10ner bills and collects the property taxes for the School District and remits taxes collected to the School D1stnct. Property tax revenues dunng the fiscal year ended June 30, 2002 for maintenance and operations amounted to $11,581.105.82

The tax millage rate levied for the 2001 tax year (calendar year) for the City of Valdosta Board of Education was as follows (a mill equals$ I per thousand dollars of assessed value).

School Operations

~mills

CITY OF VALOOSTA BOARD OF EDUCATION -LOWNDES COUNTY NOTES TO THE GENERAL-PURPOSE FINANCIAi STATEMENTS JUNE 30. 2002

EXHll311 "IJ"

Note 1 SUMMARY OF SIGNIFICANT ACCOUNTrNG POI.ICIES
SALES TAXES
Special Purpose Local Option Sales Tax revenue dunng the year amounted to $7.390,530 04 and 1s to be used for capital outlay for educatwnal purposes or debt service. This sales tax was authonzcd hy local referendum and the sales tax must be re-authorized al least every five years
INVENTORIES
CONSUMABLE SUPPLIES Inventones on consumable supphes are reported on the Combined Balance Sheet at average cost The School Distnct uses the consumptwn method to account for consumable supphes whereby an asset 1s recorded at ume of purchase and expenditures are recorded when consumed Reported inventones arc equally offset by a reservat10n of fund balance which indicates that they do not conslltute "available spendable resources" even though they are a component of net current a~set~.
FOOD INVENTORIES lnventones of donated food commod11Ies used in the preparauon of meals are reported on the Combined Balance Sheet at the1r Federally assigned value Purchased foods inventoncs are reported on the Combined Balance Sheet at cost (first-in. first-out) Donated food commod111es are recorded as revenues and expenditures at the lime commodity items are received Purchased foods mventones are recorded as expenditures at the lime of purchase The mventones reported on the balance sheet for donated food commod1t1es and for purchased foods are equally off~t by re,crvat10ns of fund balance which indicates that these amounts do not conslltute "available spendable resources" even though they are a component of net current assets
COMPENSATED ABSENCES
Compensated absences represent obhgallons of the School D1stnct relating to employees nghts to receive compensatJon for future absences based upon service already rendered This obhgat10n relates only to vesting accumulating leave m which payment 1s probable and can be reasonably esllmated No hab1hty has been recorded in the individual funds for the current port10n of this obhgat10n as this amount 1s deemed immatenal to the general-purpose financial statements
Add1t1onally, the dollar value of accumulated compensated absences at June 30, which will be payable from future resources has not been recorded m the Generdl Long-Term Debt Account Group as this hab1hty 1s also deemed to be immaterial to the fair presentallon ofthese financial statements
INTERFUND TRANSACTIONS
The School D1stnct has the following types of interfund trnnsacuons
Reimbursements ofexpenditures 1mllally made from a fund that are properly applicable to another fund are recorded as expenditures m the reimbursing fund and as reductions of expenditures m the fund that 1s reimbursed
- II -

CITY OF VALDOSTA BOARD OF EDUCATION - LOWNDES COUNTY NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002

CXHIBIT"D"

Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Operating transfers are recorded for all 1Dterfund transactions other than reimbursements
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general-purpose financial statements are captwned "Memorandum Only" to 1Dd1cate that they are presented only to facilitate financial analysts Data m these columns do not present financial pos11ton or results of operation~ ID conformity wtth generally accepted account1Dg principles Neither are ~uch data comparable to a con'i0hdat1on. lnterfund eliminations have not been made ID the aggregatwn of th1~ data
Note 2 DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time many depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee oflD~urance, or by collateral The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent of the pubhc funds be1Dg secured after the deduction ofthe amount ofdeposit msurance If a depository elects the pooled method (OCGA 45-8-13 I) the aggregate ofthe market value ofthe ~curit1cs pledged to secure a pool of public funds shall be not less than 110 percent of the daily pool balance OCGA Section 45-8-11 (b) provides an officer hold1Dg public funds may. ID his dtscretwn. waive the requirement for secunty ID the case of operat1Dg funds placed ID demand deposit check1Dg accounts
Acceptable security for deposits consists of any one of or any comb1Dat1on of the follow1Dg.
(I) Surety bond signed by a surety company duly qualified and authorized to transact h~mcss wllhm the State of Georgia.
(2) Insurance on account~ provided by the Federal Deposit In~urance Corporalton.
(3) Bonds. bills. notes. certificate~ of 1Ddebtedness or other dtrect obhgallons of the Umted States or of the State of Georgia,
(4) Bond~. bills, notes, certificates of 1Ddebtedness or other obhgatwn~ of the counties or mumctpahhes of the State of Georgia.
(5) Bonds of any pubhc authority created by the laws of the State of Georgia, prov1d1Dg that the statute that created the authonty authonzed the use of the bonds for th1~ purpose.
(6) Industrial revenue bonds and bonds of development authonties created by the laws of the State of Georgia. and

- 12 -

CITY OF VALDOSTA BOARD OF EDUCATION - LOWNDES COUNTY NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2002

EXHIBIT "D"

Note 2 DEPOSITS AND INVESTMENTS

(7) Bonds, bills, notes, certificates of indebtedness, or other obhgat10ns of a sub,1d1ary corpora!lon of the Umted States government, which are fully guaranteed by the Umted States government both as to pnncipal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank. the Central Bank for Cooperatives. the Fann Credit Banks, the Federal Horne Loan Mortgage Associa!lon, and the Federal Nat10nal Mortgage Association

CATEGORIZATION OF DEPOSITS At June 30, 2002, the bank balances were $19,644,632 68 The amounts of the total bank balances are classified into three categories of credit nsk

Category l - Cash that 1s insured (e g, Federal deposnory insurance) or collaterahzed with secur1!1es held by the School D1stnct or by the School D1stnct"s agent in the School D1stnct"s name.
Category 2 - Cash collateralized with securities held by the pledging financial inslltutlon"s trust department or agent in the School D1stnct's name.
Category 3 - Uncollaterahzed deposits. (This includes any bank balance that 1s collaterahzed with secunues held by the pledging financial instllu!lon. or by its trust department or agent but not in the School D1stnct"s name )

The School D1stnct's deposlls are classified by risk category at June 30, 2002, as follow~

Risk Category

Bank Balance

I

$ 414,363 88

2

3,773,704 26

3

15,456,564 54

Total

$12,644.632 6,.8

CATEGORIZATION Of INVESTMENTS At June 30, 2002, the carrying value of the School D1stnct"s total investments wa~ $1.318,244 24 which 1s matenally the same as fau value This investment consisted entuely of funds invested m the Local Government Investment Pool administered by the State ofGeorgia. Office ofTreasury and Fiscal Services which are not required to be categorized since the School D1stnct did not O\>;TI any specific identifiable securities in the pool The investment pohcy of the State of Georgia. Office of I reasury and Fiscal Services for the Local Government Investment Pool (Pnrnary L1qmd1ty Portfolio) does not provide for investment m dcnvauves or s1m1lar mvcstmen~ A descnpt1on ofthe Pnrnary L1qmdity Portfolio 1s as follows

The Pnrnary L1qmdity Portfoho consists of Georgia Fund I, which 1s a combination local and ,tate government investment pool. and Fund 6 Georgia Fund I is a stable net asset value investment pool which follows Standard and Poor"s cntena for AAAm rated money market funds The pool is not registered with the SEC as an investment company but does operate Georgia Fund I in a manner

- 13 -

CITY OF VALDOSTA ROA RD OF EDUCATION - LOWNDES COUNTY NOTES TO THE GENERAL-PURPOSE ~ INANCIAI STATEMENTS JUNE 30, 2002

EXHIBIT"D"

Note 2: DEPOSITS AND INVESTMENTS
consistent with Rule 2a-7 of the Investment Company Act of 1940 and is considered to be a Rule 2a7 hke pool The pool's primary objectives arc safety of capital. investment income, hqu1d1ty and d1vers1fieatlon while maintaining pnnc1pal ($1 00 per share value) Net asset value 1~ calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and values part1c1pant's shares sold and redeemed based on $1 00 per share Pooled cash and cash eqmvalents and investments are reported at cost which approximates fair value The pool does not issue any legally binding guarantees to support the value of the shares Part1c1pat1on in the pool 1s voluntary and deposits consist of funds from local governments, operating and trust fund~ of Georgia's state agencies, colleges and un1vers1t1es_ and current operating funds of the State of Georgia's General Fund
Investments in Georgia Fund 1 and Fund 6 are directed toward short-term instruments such as U S Treasury obligations. secunt1es issued or guaranteed as to pnnc1pal and interest by the U S Government or any of its agencies or instrumentaht1es, banker's acceptances and repurchase agreements The weighted average matunty of Georgia Fund I may not exceed 60 days The weighted average matunty for Georgia Fund I on June 30, 2002, was 0.12 years lhe average investment durat10n for Fund 6 on June 30, 2002, was O75 years
Note 3 NON-MONETARY TRANSACTIONS
The School District receives food commodities from the Umted States Department of Agnculture IUSDA) for ~chool breakfast and lunch programs These commodities are recorded at their Federally assigned value See Note I - Inventories
Note 4 RISK MANAGEMENT
The School D1stnct 1s exposed to various nsks of loss related to torts, theft of, damage to. and destruction ofasse~. errors or om1ss10ns,Job related Illne~s or inJunes to employees, acts of God and unemployment compensation
The School District has obtained commercial msurancc for nsk ofloss associated with torts, assets and errors or om1ss10ns The School District has neither s1gmficantly reduced coverage for these risks nor incurred losses (settlements) wluch exceeded the School District's insurance coverage in any of the past three years
The School District has elected to self-insure for all losses related to acts of God The School District has not experienced any losses related to this risk in the past three years
The School District 1s self~insured with regard to unemployment compensation claims In connection with this program, a ~If-insurance reserve has been established within the General Fund by the School District The School District account~ for claims w11hin the General Fund with expenditure and hab1ht) being reported when 111~ probable that a los~ has occurred, and the amount of that loss can be re=nably estimated
- 14 -

CITY OF VALDOSTA BOARD OF EDUCATION - LOWNDES COUNTY NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002

EXHIBIT "D"

Note 4 RISK MANAGEMENT

Changes in the unemployment compensation claims habihty dunng the last two fiscal years are as follows:

2001 2002

Begmnmg of Year L1ab1hty

Claims and Changes m Estimates

$

0 00 $

231 00 $

$

0 00 $

0 00 $

Claims Paid

End of Year L1ab1hty

231 00 $

0 00

0 00 $

0 00

The School Distnct part1c1pates in the Georgia School Boards Association Workers" Compensation Fund, a pubhc entity nsk pool orgaruzed on July I, 1992, to develop, implement, and administer a program ofworkers' compensation self-insurance for its member organizations The School Distnct pays an armual premmrn to the Fund for its general insurance coverage Additional insurance coverage 1s provided through an agreement by the Fund With the United States F1dehty and Guaranty Company to provide coverage for potential losses sustained by the Fund in excess of $350,000.00 loss per occurrence, up to the statutory hmll

The School D1stnct has purchased surety bonds to provide additional insurance coverage as follows:

Position Covered

Amount

Supenntendent Director of Operations Financial Director Business Services Director Payroll Clerk Purchasing Agent All Other Employees

$ 20,000 00 $ 10,000 00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 5,000.00

Note 5. SHORT-TERM DEBT

The School D1stnct issues tax ant1c1pat10n notes in advance of property tax collections, depositing the proceeds in its General Fund. This short-term debt 1s to provide cash for operat10ns until property tax collections are received by the School D1stnct Article IX, Section V, Paragraph V of the Constitution ofthe State of Georgia hm1ts the aggregate amount of short-term debt to 75 percent of the total gross income from taxes collected in the preceding year and requires all short-term debt to be repwd no later than December 31 of the calendar year in which the debt was incurred.

Tax Ant1c1pat1on Notes

Begmnmg Balance

Add1t1ons

Payments

Endmg Balance

oo $.,U4,Q,Ol)Q.ll.l! $ 4 620 l)Oj),QO $,4.740 OOOJ!0 $ 4 620 000

- 15 -

CITY OF VALDOSTA BOARD OF EDUCATION - LOWNDES COUNTY NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002

EXHIBIT "D"

Note 6 ON-BEHALF PAYMENTS

The School Dtstnct has recogmzed revenues and expenditures m the amount of $452,806 67 for health insurance and retirement contributions paid on the School D1stnct's behalf by the followmg State Agencies

Georgia Department of Educauon Paid to the Georgia Department ofCommumty Health For Health Insurance of Non-Certified Personnel In the amount of$346,614.79

Paid to the Teachers Retirement System of Georgia For Teachers Reurement System (TRS) Employer's Cost In the amount of$29,335 88

Oflice of Treasury and Fiscal Services Paid to the Public School Employee~ Retirement System For Public School Employees Reurement (PSERS) Employer's Cost In the amount of $76,856 00

Note 7 SIGNIFICANT COMMITMENTS

The followmg 1s an analysis ofs1gmficant outstandmg construction or renovation contracts executed by the School District as of June 30, 2002

Pro1ect

Unearned Executed Contracts

Valdosta Middle School Valdosta High School Fme Arts Facility W G Nunn Elementary School

$ 4,609,482 73 4,840, I68 46 9 944 79
$ 9.459.595,98

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

Note 8 CONTINGENT LIABILITIES

Amounts received or receivable pnnc1pally from the Federal government are subJect to audit and review by grantor agencies This could result m requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms The School D1stnct believes that such d1sallowances, if any, will be immaterial to its overall financial position

- 16 -

CJTY OF VALDOSTA BOARD OF EDUCATION - LOWNDES COUNTY NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002

EXHIBIT "D"

Note 8: CONTINGENT LIABILITIES

The School District is a defendant m vanous legal proceedmgs pertaining to matters incidental to the performance ofroutine School Distnct operat10ns The ultimate disposition ofthese proceedings 1s not presently determmable, but 1s not believed to be matenal to the general-purpose financial statements

Note 9 RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all teachers, adm1mstrat1ve and clerical personnel employed by local school distncts arc covered by the Teachers Retirement System of Georgia (TRS ), which is a cost-sharing multiple employer defined benefit pens10n plan TRS provides service retirement, disability retirement and survivors benefits for its members m accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtamed from the Georgia Department of Audits and Accounts

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School D1stnct 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 contnbutlons to TRS at rates adopted by the TRS Board of Trustees m accordance with State statute and as advised by their independent actuary The required employer contnbut1on rate 1s 9.24% and employer contnbullons for the current fiscal year and the precedmg two fiscal years are as follows

Fiscal Year

Percentage Contnbuted

Required Contnbutlon

2002 2001 2000

100% 100% 100%

$ 2,523,188.48 $ 2,940,807.94 $2,810,844.79

- 17 -

CITY OF VALDOSTA BOARD OF EDUCATION - LOWNDES COUNTY COMBINING BALANCE SHEET SPECJAL REVENUE FUND JUNE 30 2002

ASSETS
Cash and Cash Equivalents Investments Accounts Receivable Prepaid Items lnventones
Food
Damned Commod1bes
Purchased Food
Tatel Aese1s

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

s 776,862 43

000

FEDERAL PROGRAMS

265 81

15,367 40

$

909 629 74

110,10701 85 976 87

$

988 579 52 $

ooo s__,.s_09_1_e_2.s..1.4...

LIABILITIES AND FUND ECUJTY
LIABJLIJIES
Cash Overdraft Accounts Payable Salanes Payable Expired Grant Balances Payable Deferred Revenue
Tatel L1ab1lrtles
FUND EQUITY
Fund Balances Reserved For lnventones Food Donated Commodrties Purchased Food Unreserved Undes1gnated
Total Fund Equity
Total L1ablllbes and Fund Equity

$

31,18258

134 429 96

$

165 612 54

s

555,645 39

75,30816

273,95546

2,435 83

155013

$

908894 97

$

110,10701

85,976 87

626,88310 $

$

822,966 98 $

s

9881579 52 $

000 $ 000 $

734 77 73477

ooo s_ _909..,..,6.,29._7._4._

See notes to the general-purpose financial stataments

-18-

EXHIBIT"E"

OTHER PROGRAMS

ATHLETIC FUND

TOTALS

JUNE 30, 2002

JUNE 30, 2001

$

13,29915 $

83,687 93 S

674 049 51 $

78.475 32

1982

28563

791 270 17

924,997 14

793,85908

29,82507

110,10701 6597687

11223685 85486 53

$

13 29915 S

63907 75 $ 199541616 $ 1,891,15302

$

555,64539 $

372 453 09

106 490 74

134,996 19

408,38542

401,693 57

2,43583

15000

$

4()41000

4196013

3790012

$

40 410 00 $ 1114 917 51 $

947192 97

$

110,10701 S

112,236 85

65,97687

65,48653

$

13 29915 s _ _ _4_3~4~97_7_5~

6&,4414 77

746 23667

$

1329915 $

43497 75 S

880 498 65 $ _~94~3-960~~05~

$

1329915 $

83 90775 S 1 995 41616 S 1,891,153 02

-19-

CITY OF VALDOSTA BOARD OF EDUCATION LOWNDES 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 lnstrucllon Support Services Pupil Services Improvement of lnsbucbonal Services EducabOnal Media Services General Admm1strabon School Adm1n1stration Business Adm1nistratJon Student Transportabon Services Other Support SeNices Food Services Operation Enterpnse Operabons
Total Expenditures
Excess of Revenue over (under) Expenditures
OTHER FINANCING SOURCES
Operabng Transfers In
Excess of Revenues and Other Financing Sources over (under) Expend1tulll&
FUND BALANCE JULY 1
Food Inventory Net Change 1n Penod Donated Commodtbes Purchased Food
FUND BALANCE JUNE 30

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

FEDERAL PROGRAMS

s

199,43000 $

2,203,533 19

412 823 87

$ 2 815 787 06 $

191,319 00
s
191 319 00 $

4,515,651 28 90000
4 516,551 28

$

$ 2,832,020 34

$ 2,832,020 34 $

s

-16,233 28 $

191,31900 $

3360,647 20
193,701 01 283,347 31
10,339 98 173 703 02 39,04298
93,35483 370,296 91

191 319 00 s
000 $

4 524 433 24 -7,881 96

s

-16,233 28 $

840,839 76

-2,129 84 490 34

$

822 96698 $

000 $ 000

8 616 73
734 77 000

ooo s_ _ _.,734.,,._n..

See notes to the general-purpose financial sta1ements

-20-

EXHIBIT "F''

OTHER PROGRAMS

ATHLETIC
FUND

TOTALS

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$

390,749 00 $

359,398 00

6 719,184 47

5,707,993 05

$

27 262 75 $ _-----'366=..:2c.c40:..6::,5:....

807 227 27

847 96940

$

27 262 75 $

366 24065 $ 7 917 160 74 $ 6,915,360 45

$ 3,551,966 20 $ 3,161 553 18

$

s 27 632 58

412194 21

193,701 01 283,347 31
10,339 98 173,703 02
39,042 98
93,354 83 370,296 91 2,832,020 34 439 826 79

87,06119 192,113 35
1,342 87 127 296 29
13,881 63 7,589 89
41,062 66 75,648 16 3,043,594 71 319 044 09

$

s 27 632 58

412 194 21 $ 7,987,599 37 $ 7,070,188 02

$

-369 83 $

-45,953 56 $

-70,438 63 $

-154,827 57

8 616 73

$

-369 83 S

-45,953 56 $

-61 821 90 $

-154,827 57

13 668 98

89,451 31

943,96005

1,085,269 OB

-2,129 84
49034

-7,929 29 2144783

$

1329915 $

43 497 75 $

s_ BBO 498 65

_.94=3..::96:::o;;..;o::.5;.

- 21 -

CITY OF VN,OOSTA BOARD OF EDUCAT\ON - LOWNDES COUNTY
COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30 2002

EXHIBIT "G"

~ Cash and Cesh Equrvalen1s lnwslmerrts Accoun1s Recervable

REGULAR

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS JUNE 30, 2002 JUNE 30. 2001

s s s s 2,199,481 50

6 875,874 15

9 075,355 65

1901,86841

1,071 81

1,316,814 92

1,317,886 73 10,TT4,782 52

1,285.11949

1,285,11949

1,244,592 90

TotalAssets

$ 2.200155331 S 9.4TT.80856 $ 11.678136187 $ 13.921.24383

LIABILITIES AND FUND EQUITY
LIABILITIES
Cesh Ovetdraft l\ccoun1s Payable
Total Llabtlrbes
FUND EQUITY
Fund Balances Reserved For SPLOST Pr0j8ds Unreserved Undes:gnated
Total Fund Equrty

s 129,124 40

s

12 20 s

12 20

880

$

12 20 s

12 20 s 129,133 20

s s 9,477,796 36

9,4TT,796 36 $ 11,458,952 86

s 2,200,553 31

000

2,200,553 31

2,333,157 TT

s s s 2,200,553 31 $ 9.4TT.796 36

11,678,349 67

13,792,110 63

Total Lrabrlrbes and Fund Equrty

$ 21200.553 31 S 9.4TT.808 56 S 11678361 87 $ 13.921 1243 83

See notes to the general-purpose financial statemen1s

-22 -

CITY OF VALDOSTA BOARD OF EDUCATION - LOWNDES COUNTY

EXHIBIT "H"

COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES

CAPITAL PROJECTS FUND

YEAR ENDED JUNE 30. 2002

REGULAR

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS YEAR ENDED JUNE 30, 2002 JUNE 30, 2001

REVENUES Taxes Other Funds
Total Revenues

s s 7,390,530 04 $ 7,390,530 04

7,304,183 67

s 86,567 26

257 501 00

344 068 26

2,421,661 65

s s s s 86,567 26

7,848,031 04

7,734,598 30

9,725,845 32

EXPENDITURES
Caprtal Outlay Supplles Other Expendrtum Bulldlng and Bu1ld1ng Improvements Land and Land Improvements Equipment
Total Expendrturas
Excess of Revenues over (under) Eiq>enchtures
FUND MLA!:,!CE JUL.)'. l

s $ 22 429 00

41,902 13 s

64,33113

25,104 27

2,679 96

27,784 23

168,263 45

9,020,635 73

9,188,89918 $ 1,053,94910

3,375 00

514,74112

518,11612

49,228 60

49,22860

631649 47

s s s s 219 171 72

9 629 187 54

9,848,359 26

1,685,598 57

s s -132,604 46 $ -1,981,156 50

-2,113,760 96 $ 8,040 246 75

2,333,157 77

11,458,952 86 13,792,11063

5,751,863 88

FUND BALANCE JUNE 30

$ 2,200,55331 S 947779636 $ 1167834967 $ 1379211063

See notes to the general-purpose finanaal statements

- 23 -

CITY Of VALDOSTA BOARD OE EDUCATION LO'lfNPES COUNTY
SCHEDULE Of EXPENP\TURES Of FEDERAL AWM:PS YEAR ENDED JUNE 30 2002

SCHEDULE "1"

FUNDING AGENCY

PROGRAM/GRANT

De,,...,_. AQncullu~ U S

of

Child NutnbOn Cluster

Pass,.Through From Georgia Department of EducatlOn

Food end Nutnt,on Program

FoodSerw:es
School B-fast Program National School LU'ld1 Prog"'"' Nabonal School Snack ~ m

Total Chlld Nutnbon Cluster

Other Programa Pass-Tlwough From Georg,a Departmon1 of Educauon Food end NutritJon Program Food Dtstnbutlon Program (1)

Total U S Department of Agnwltun!

ColporabOn for Nabonlll end Community SeMce Pou-Through From Geoli,a Dopa, b1.0, 1I of Educaoon Leam and Serve A.rlWIC8

School- Commur<ly -

Pl0glllfflS

Educ:abon, U S Del)llrti1W1t of Speoal Educabon Cl<J-
p.,._Through From Georg.a Department of Edu:abOn lndMduala wrth 01sabdrtMts Educabon Act
-Part B Speoal Educ:atJon Capaoty Bulldlng Improvement Grant F'"' Through
Total Speoal EducatJon Cluster

Other Programs Direct Elementary end Secondary Educabon Act Fund for the 1 - 1of Educat.on bnpacl Aid Prepanng Tomorrow's Teachers to use Technology Pou-Through From Georgia Department of Educab011 ComprohenSM! School Reform Demonatrabon Pro,od Elementary and Soc:cndary Educat,on Act Tnlo I Accountabtlrty Grants Grants to Local Educat,onal Agenoes TIiie II ~ Professlonal Development Thie Ill Technology Lrteracy C h a - Fund Grants Tnlo Vl lnnovatMt Educabon Program S1nltag,o1 Clas &ze Redocl:101"1 Safe and Drug-Free Schoola and ComrrunttHts Vocational Educallon . BeSIC Grants to States High School Program BaSK: Grant

CFOA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

10 553 10 555 10 555

NIA

s 505 528 04

(2)

NIA

1528,n468 s

2 862,739 87 (3)

NIA

14 202 85

14 202 85

s 2 048 455 57 s

2 678 942 72

10 550

NIA

155 on 62

1ss on 62

s 2 2031533 19 s

2 832 020 34

94 004

NIA

s 29 566 45 s

29.566 45

84 027 84 027 84 173

NIA

s 11773961 s

NIA

702 628 11

NIA

47 354 89

s 867 1'22. 61 s

117 73961 70262811
47 354 69
867 722 81

84 215 84 041 84 342 84 332
84 348 84 010
84 281
84 318 84 298 84 340 84 186
84 048

362 589 71 58 612 43 6 000 00

382 589 71 (4) (5)
6 000 00

NIA

52,000 00

52 000 00

NIA

208 823 53

208 823 53

NJA

2,159210 2

2 159 210 2

NIA

38,130 37

38 130 37

NJA

125 000 00

125,000 00

NJA

72 561 00

72,561 00

NJA

352 154 91

352 154 91

NIA

30,864 17

30 864 17

NJA

93 797 00

93,797 00

CITY Of YAL.OOSIA BOARD OE EDUCATION - LOWNDES COUNTY SCHEPVI E OE EXPENDITURES OF FEDERAL AWARDS YEAR ENPEP JUNE 30 2002

FUNDING AGENCY
PROGBMYGRANI
Educabon U S Department of Other Programs
Pan-Through From Bernon County Boord ol Educal,on
dlbla Southem Pine Migrant Education AQeoc'/ Elementary and Secondary Educabon Ad Trtlel Mogrant Education
To1al U S Depamnenl ol Educabon
Health end Human SeMces, U S Department of P8$5-Through From Office of Planning and Budget Abs1mence Educabon Block Grant Pass-ThrOU{tl From Lowndes/Valdosta Comm1SS1011 For Chlldren and Youth Temporery Assi:stance for Needy FamlNtS
Total U S Dep.Jtrnenl at Heatth and Human 5eMc:es
Justtee U S Department of
Office of Juvenile (Ind Delinquency Preventton Pass-Through From Lowndes County Board ol Comm,sa,onors
Tille V Preventton Grants
Labor u s Department ol
Pass-Ttvough From South Georgia ReglOt\8.I Educ:tlhOnel Devek:>pment Center W011<place lnvestmont Ad Youth Program
Defense u s Department ol
0,rect Defen,o AdMty for Non-Educabonal Tradr1>0nill Support TroopstoT""""""5 Oepertment o1 l/1e Navy R O T C Prognim
Total U S Department ol Defenae

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

84 011
93 235 93 558

NIA

s

6 314 68 s

6 31-4 68

s ,4 -431 780 83 s

-4 373 168 ,4Q

NIA

s 33 129 71 s

NIA

-4 689 17

s s 37 798 88

33,129 71
4 689 17 37 798 88

16 546

NIA

s

5 565 75 s

5 565 75

17 259

NIA

s 13 860 00 s

13 880 00

s 6 260 12 s
-49,-431 68
s 55 691 60 s

6 260 12 58 048 41 (3) 64 308 53

Total Federal F1nanoal Awstance

$ 6,777,796 90 S

NIA =Not Avadable

Notes to the Schedule of Exoendrtures of Federal Awards

I 1) The llrT'IOlK\ts 5hOwll for the Food Dtstnbuoon Progn:::m represents the Federally ass,gned value of nonmonetary 8SSIStsnc:e for donated commodmes received and/or con.at.med by the system dunng the O.Jntr:nt fiscal year
(2) Expendrtures for the School Breakfast Program were not ma:nta:ned separately and are included m the 2002 Nabonal School Lunch Program
(3) ExpendrtLnS for this program :ndude State and/or other Funds Expendrtu"es are 11CM matntalned by fund source
(4) Includes Federal AaSJstance of S300 5-43 97 provKSed to subreopetrts (5) Expenditures were not maintained by fUld source

Ma,or Programs are Ldenbfied by an astenak (11n front of the CFDA number

The accompanying schedule of expendlb.Jras of Federlll awards includes the Federal grant 8dMty of the Crty of Valdosta Board of EducabOn and III presented on the modified accrual bas:s al accountrng wtvch the baSIS of acc:ounting used m lhe presentabon of the general-p.apose tinanmll statements

7 356 288 35

See notes to the general-purpose finanClal statementa

- 25 -

CITY OF VALDOSTA BOARD OF EDUCATION - LOWNDES COUNTY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 2002

SCHEDULE "2"

AGENCY/FUNDING

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

GRANTS

Educabon Geo,gla Department of

Quality Bas,c Educallon

Direct lnolrudlonal Coll Krndergarten Program

s 1,557,178 00

Kindergarten Program - Earty lnlarventlon Program

345,360 00

Pmnary Grades (1-3) Program

3,817,847 00

Primary Grades - Earty lnteMJntlon (1-3) Program

889,500 00

Upper Elomentary Grades (4-5) Program

2 028 713 00

Upper Elementa,y Grades-arty Intervention (4-5) Program

350 774 00

Middle School (6-8) Program

3,894,354 00

High School General Education (9-12) Program

2,969,727 00

Voca!Jonal Laboratory (9-12) Program

699,435 00

Students wtlh Disabillles

Galegory I

21,432 00

Clllego<y II

373,182 00

category Ill

1,465,858 Oil

Cetego1y IV

848 701 Oil

CategO<y V

73 851 00

Gifted Student - Category VI

391 590 00

Remedial Education Program

59 099 00

AllemalM! Education Program

270486 00

English Speakers of Other Languages (ESOL)

38849 00

Media Center Program

619,272 00

20 Days Addlbonal lnstrudMJn

190,099 00

Staff and Professional Development

114 292 00

Indirect COSt

3 787 283 00

Calegoncal Grants

Pupil Transportation

Regular

493 904 00

Bus Replacement

135 204 Oil

Sparsity - Allemalfve Program

35 889 00

NurslngSeMces

147 774 00

Pr1napal Supplements

28,947 00

Vocabonal &Jpesvlsor>

30436 00

M,granl Education

2,386 Oil

Mld~erm Adjustment Hold-Harmless

239 965 00

Education Equahzatlon Funding Grant Food Services

706 604 00
s

Other State Programs

Apprentu:eshlp Program

35000 00

Extended Day-Tedmology/Career

59,481 00

4-8 Statewide After SChool Program

124,258 80

Health Insurance

348 614 79

K-3 S i a - Reada,g Program

85484 09

Mentor Teachers

45900

Pay for Performance

90,000 00

Post Secondary Option-Spnng

4,158 Oil

Preschool Handicapped Program

107,475 00

Rule 10 Special Education Sla1e Grant

26 000 00

Teachers Relll"ement

29 335 88

VocallonaH ndustry Ger1Jflcatjon

15 000 00

Lottery Programs

AastSINe Tecmology

Computers 1n the Classroom

s 1,557 178 00
345 360 00 3,817,847 00
889,500 00 2 028,713 00
350,774 00 3,694,354 00 2,969 727 00
699435 00
21 432 Oil 373,182 Oil 1,485,858 Oil 648,701 Oil
73,851 Oil 391,590 00
59 099 00 270,48600
36 849 Oil 619272 Oil 190 099 Oil 114,292 Oil 3 787 283 00

199 430 00
12 819 Oil 178 500 Oil

493 904 00 135 204 Oil
35,889 Oil 147 774 Oil
28,947 Oil 30,438 00
2 386 Oil 239 965 Oil 706 604 Oil 199,430 00
35 000 00 59 481 Oil 124,258 80 348,614 79 85,484 09
45900 90 000 00
4158 Oil 107 475 Oil 26 000 Oil 29,335 88 15,000 Oil
12,819 Oil 178,500 Oil

- 26 -

CIJY OF VALDOSTA BOARD OF EDUCATION - LOWNDES COUNTY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 2002

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Office of Planning end Budget Georgia Counal for the Artf. Arts EducabOn Chalenge Progmm
Office of Treasury end FISCBI Services Pubhc School Employees Retirement
CONTRACTS Education Georgie Department of Student Achievement - NCEE Contract Student Actuevement - Travel

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

20 000 00

76,656 00

$

20 000 00

76,656 00

25 000 00 2 145 72

25 000 00 2 145 72

$ 27 273,037 28 $ 390,749 00 $ 27,663 786 28

See notes to the general-purpose finanael statements

-27 -

CITY OF YALOOSTA BOARD OF EDUCATION - LOWNDES COUNTY SCHEDULE OF APPRQ\/EO LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30 2002

SCHEDULE "3"

PROJECT

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS(2j

AMOUNT EXPENDED IN CURRENT YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS(Jl

PROJECT
STATUS

For the 1'8JSIng of not more than $41 930,941 00 tor the purpose of addrbons and renovabOns to Valdosta High School construcbon of a new elementary school construcbon of a new Veldo$ta Mlddle School ecldltlons and renovatJans to Southeast ElemenWy School
Lomax-P1nevaie Elementary Sd,ool W G HUM
Elemen1ary School West Gordon Elomemary
School S L Mason Elementary School - . n
M,odlei Sc.hc:d, making 1.y&1em-wide technOlogy 1mprovement1 and acqumng new achool l.ltn for the construc:bon of new schoots and BxparlSIOi1 of emtrng schools student traneportabOn eeMCeS Improvement> IC 9Chool dnvewaya and pa,1<rng ko equwng syr.\em-wlde new construcbon addlbon:s and renovabon8

s s S 41 930 941 00 4119301941 00

916291187 54 S 14 988 564 02

Ongomg

(1) The School Dcstnd's ongnal cast estimate es speofied 11"1 the reaOIUbon calling tor the IIT1)08ltion of lhe local Opbon
Sales Tax

(2) The Sdlool Orstnct's current e:sllmate of total coet for the prtJteCt Includes all cost from pro,ect mcepbon to completton

"""""'may tax- (3) The votere of Lowndes County approved the 1mposlb0n of a 1% eales tax to fund the above Proteci

Amoun111- fo< tt.ae

,ndude sales

state local -

taxes and/or other fi.nds over the Irle of the pro,ect

See notes to the general purpose flnanaal statements

. 29.

,----------

CITY OF VALOOSTA BOARD OF EDUCATION LOWNDES COUNTY
GENERAL FUND QUALITY BASIC EDUCATION PROGRAM (QBEl
ALLOTMENTS AND EXPENDITURES BY PROGRAM
YEAR ENDED JUNE 30 2002

SCHEDULE "4"

DESCRIPTION

ALLOTMENTS FROM GEORGIA DEPARTMENT OF
EDUCATION (1 l

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

Dtred Instructional Programa

Kmderganen Program

$

Kindergarten Program-Early Intervention Program

Pr'mary Grades (1-3) Program
Primary Grade&-Earty \n1ervent10n t1-3) Program

Upper Elementary Grades (4-5) Program

Upper Elemenlsry Grades-Ellf1y lntorvent10n (4-5)

Program

MICldle School (6-8) Program

High School General Education (S-12) Program

Vocotlonal Loboratory (S-12) Program

Students With lllsabirtes

category II

category Ill

category IV

category V

Grftod Student Cstogory VI

Remedial Educa11on Program

AJtemattve Education Program

E~sh Speaker& of Other Languages (ESOL)

1,863 982 00 $ 413 405 00
4,570,059 00 1,0&4,753 00 2 428,421 00

1,899,038 32 $ 276,535 20
5,204,252 09 651 567 33
2,866 563 57

32 793 99 $ 6 621 03 11176531 2 957 22 73634 82

1,931,632 31 285156 23
5,316,037 40 854 524 55
2 940 198 39

419,865 00 4 422,234 00 3,554,838 00
837,241 00 3 091 941 00
488,742 00 70 743 00
323n900 43 669 00

252 538 16 4,897,653 71 4 387 832 60
n4 53861
402 924 22 1,730,260 90
443,601 42 38,612 67
469,232 32 113,523 08 326 819 74
51 264 08

83128 165,282 89 1n.865 33 112 608 98
10,744 20 35,469 24 11,337 79
1,122 56 8,234 49
657 13 18.276 92
669 46

253 38944 5,083,116 40 4,545 698 13
887 345 59
413 888 42 1,765,7&> 14
454 939 21 39 735 43
4n,46661
11418021
344 69666 51 933 56

TOTAL DIRECT INSTRUCTIONAL PROGRAMS

$

23,573,692 00 $ 24,766,756 42 $ 793,090 46 $ 25,559 646 66

Media Center Program Stall and ProfeSSlonal Development

741 284 00 138 812 00

670 474 19 47,608 79

129,133 66 90,847 88

999 607 65 138 254 85

TOTAL QBE FORMULA FUNDS

$

24 451 988 00 $ 25,684 839 40 $ 1 012,871 98 $ 26 697 711 38

(1) Compnsed of State Funds plus Local Five MW Share

See notes to the general-purpose finanoai statements

-30-

CITY OF VALDOSTA BOARD OF EDUCATION - LOWNDES COUNTY GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM /QBE)
ALLOTMENTS AND EXPENDJTURES - BY SITE YEAR ENDED JUNE 30. 2002

SCHEDULE "5"

Sfil
Sallas Mahone Elementary School Lomax-Pmevale Elementary School Newbern Middle School Valdosta Htgh School Nunn Elementary School West Gordon Elementary School Southeast Elementary School Valdosta Middle School Mason Elementary School Valdosta Crty Alternat1ve/Evernng School Central Office (Alternative Education Program) Other Awahary Faolrty
TOTAL
(1) Compnsed of State Funds plus Local FNe MIii Share

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

2,043,279 00 $

2,155,13016

2,100,287 00

2,174,14120

2,525,190 00

2,702,499 29

5,547,091 00

6,325,810 18

2,660,066 00

2,460,453 75

1,766,031 00

1,820,866 75

1,779,310 00

1,907,775 93

2,749,431 00

3,231,560 58

2,079,428 00

2,135,007 99

134,878 05

323,779 00

277,393 23

234 331 77

$

23,573,892 00 $ 25,559,848 88

See notes to the genera~purpose financial statements - 31 -

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

w. RU',!,ELI, Ill-; I OJ\
SIA.TC AUOITOn
(40A) 656-21/4

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Wa.shington Street SW !>u11c 214 Atldn!J, Gcorg1J 30334-8400
June 5, 2003

Honorable Sonny Perdue. Governor Members of the General Assembly Members of the State Board of Education
and Supenntendent and Members of the Cny of Valdosta Board of Education
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPOR'I ING 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 Valdosta Board of Education as of and for the year ended June 30, 2002, and have 1Ssued our report thereon dated June 5, 2003. Tlus report was qualified for a scope lim1tat10n and for vanous departures from generally accepted accounting pnnc1ples, as identified in the auditor's report on the general-purpose financial statements Except as d1scu~sed in the following paragraph, we conducted our audit in accordance with auditing standards generally accepted in the United States of Amenca and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States
We did not observe the taking ofeither the Federal donated commodities inventory or the purchased foods inventory at June 30, 2002, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventones through alternative procedures.
Compliance
As part of obtaining reasonable assurance about whether City of Valdosta Board of Education's financial statements are free of matenal misstatement, we performed tests of its compliance with certain prov1s10ns oflaws, regulat10ns, contracts and grants, noncompliance v.1th which could have a direct and material effect on the determination of financial statement amounts However. providing an opin10n on compliance with those prov1s10ns was not an obJect1ve of our audit, and accordingly, we do not express such an op1mon The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards
2002YB-40

Internal Control Over Finwicial Reporting
In plwining wid performing our audit, we considered City ofValdosta Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our op1ruon on the finwicial statements and not to provide assurance on the internal control over financial reporting However, we noted certain matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions Reportable conditions involve matters conung to our attention relatmg to sigruficant deficiencies m the design or operation ofthe mtemal control over finwicial reporting that, in ourJudgment, could adversely affect City of Valdosta Board of Education's abihty to record, process, summariz.e and report financial data consistent with assertions of management in the financial statements. Reportable conditions are described in the accompanying Schedule of Findings and Questioned Costs as items FS-7921-02-01 and FS-7921-02-02
A matenal weakness is a cond1t10n in wluch the design or operation of one or more of the internal control components does not reduce to a relatively low level the nsk that misstatements in amounts that would be matenal in relation to the financial statements being audited may occur and not be detected WJtlun a timely penod by employees in the normal course of performing their assigned functions. Our cons1derat10n of the internal control over financial reporting would not necessanly disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable cond1t10ns that are also considered to be material weaknesses. However, ofthe reportable condit10ns descnbed above, we consider item FS-7921-0202 to be a matenal weakness
This report is intended solely for the information and use ofthe management, members ofthe City of Valdosta Board of Educal!on, Federal awarding agencies and pass-through entitles and 1s not intended to be and should not be used by anyone other than these specified parties.
4:)r* Respectfully submitted,
,fl. J "-' ssell W Hinton
RWH.as 2002YB-40

Ru-su I w. u,..,rn,
S TAr[ AU(llTQA
(404) 65 2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 W..c,hmgton Street, SW Suite 214 AIIJntJ, Gcorg1J. 10334-8400
June 5. 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board ofEducat10n
and Supenntendent and Members of the City ofValdo~ta Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH O~B CIRCULAR A-133
Ladies and Gentlemen
Compliance
We have audited the compliance of City of Valdosta Board of Educat10n with the types of compliance reqmrements descnbcd in the US Office ofManagemenl and Budget (0MB) Circular A-133 Compliance Supplemen/ that are applicable to each of its major Federal program~ for the year ended June 30, 2002. City of Valdosta Board ofEducat10n's major Federal programs are identified in the Summary of Auditor's Results Section of the accompanying Schedule of Fmdmgs and Questioned Costs Compliance with the requirements of laws. regulat10ns, contracts and grants applicable to each of1ts maJor Federal programs 1s the respons1b1lity of City of Valdosta Board of Education's management Our respons1b1lity 1s to ei.press an op1mon on City of Valdosta Board of Education's compliance based on our audit
We conducted our audit of compliance m accordance with aud1tmg standards generally accepted m the United States ofAmenca: the standards applicable to financial audits contamed m Government Aud11mg Standards, issued by the Comptroller General of the Umted States, and 0MB Circular Al 33, Audits of States, Local Governments. and Non-Profit Orgamzatwm Those standards and 0MB Circular A-133 reqmre 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 material effect on a ma1or Federal program occurred An audit mcludes exammmg, on a test basis. evidence about the City of Valdosta Board of Educat10n's compliance with those requirements and performing such other procedures as we considered necessary m the circumstances We believe that our audit provides a reason:ible basts for our opm10n Our audit does not provide a legal determma110n on City of Valdosta Board of Education's compliance with those reqmrements
2002SA-l0

In our op1mon, the City of Valdosta Board of Educanon comphed, m all matenal respects, with the requuements referred to above that are applicable to each of its maJDr Federal programs for the year ended June 30, 2002
Internal Control Over Compliance
The management of City of Valdosta Board of Educat10n 1s responsible for establishing and mamtaming effective internal control over comphance with reqmrements of laws, regulat10ns, contracts and grants apphcable to Federal programs In plannmg and performmg our audit, we considered City of Valdosta Board ofEducation's mtemal control over compliance with reqmrements that could have a direct and matenal effect on a major Federal program m order to determine our auditing procedures for the purpose of expressmg our opimon on comphance and to test and report on mternal control over comphance m accordance with 0MB Cucular A-133.
Our consideration ofthe mternal control over comphance would not necessanly disclose all matters m the mternal control that might be material weaknesses A material weakness is a condition m which the design or operation ofone or more of the 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 relat10n to a maJor Federal program being audited may occur and not be detected withm a timely penod by employees m the normal course of performmg their assigned funct10ns We noted no matters mvolving the mternaJ control over compliance and its operation that we consider to be matenal weaknesses
This report is intended solely for the mformat10n and use ofthe management, members ofthe City of Valdosta Board of Educat10n, Federal awarding agencies and pass-through entities and 1s not mtended to be and should not be used by anyone other than these specified parties
Respectfully submitted.
RWHas 2002SA-10

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

CITY OF VALDOSTA BOARD OF EDUCATION - LOWNDES COUNTY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YFAR FINDINGS AND QUESTIONED COSl S YEAR ENDED JUNE 30, 2002

PRJOR YEAR FINANCIAL SlATEMENT FINDINGS AND OUES rIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS- 7921-00-03 FS-7921-01-01

Further Action Not Warranted Unresolved - See Corrective Action/Response~

CORRECTIVE ACTION/RESPONSES

GENERAL FIXED ASSETS Failure to Mamtam General Fixed A~sets Account Group Reportable Cond1uon - Material Weakness Fmdmg Control Number FS-7921-01-01

The City of Valdosta Board of Education acknowledges the audit findmg concemmg the General Fixed Assets and concurs that th,~ 1s a matter that the local school system should plan to resolve Due to the 1mplementat10n ofGASB 34, the General Fixed Assets will be recorded in fiscal year 2003

SECTION IV FINDINGS AND QUESTIONED COSTS

CITY OF VALDOSTA BOARD OF EDUCATION - LOWNDES COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2002

SUMMARY OF AUDITOR'S RESULTS

Type of Report Issued on the Fmanc1al Statements The auditor's op1mon on the City of Valdosta Board ofEducauon's financial statement~ was qualified for a scope lim1ta11on and for vanous departures from generally accepted accounting prmc1ples

2 Reportable Cond1t1ons m Internal Control Disclosed bv the Audit of the Financial Statements The audit report for the City of Valdosta Board of Education disclosed financial statement reportable cond1twns related to the following control categones.

Cash and Cash Equivalents

General Fixed Assets

Of the reportable cond111ons descnbed above, General Fixed Assets 1s considered to be a matenal weakness

3 Noncompliance Matenal to the Financial Statements The audit of the City of Valdosta Board of Education disclosed no instances of noncompliance that were deemed to be matcnal to the financial statements

4 Reportable Cond1t10ns in Internal Control Over Major Programs The audit report for the City of Valdosta Board ofEducat10n did not disclose any reportable cond1t10ns in internal control over maJor programs

5 Tvpe of Report Issued on Compliance for Ma1or Programs The auditor's opin10n on the City of Valdosta Board of Educauon's report on compliance With reqmrements applicable to ma1or programs was unqualified

6 Audit Findings Regmred to be Reported by Section 5l0{a) ofOMB Circular A-133 The Cny of Valdosta Board ofEducauon's audit did not disclose audit findings required to be reported by sect10n 51 0(a) of 0MB Circular A-133

7 Ma1or Programs Federal awards audited as maJor programs are as follows 84 010 Elementary and Secondary Education Act- Title I - Grants to Local Educational Agencies 84.215 Elementary and Secondary Educallon Act - Fund for the Improvement of Educauon 84 340 Elementary and Secondary Educallon Act - Title VI - Class Size Reductwn

8 Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000 00

-I-

CITY OF VALDOSTA BOARD OF EDUCATION - LOWNDES COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2002
SUMMARY OF AUDITOR'S RESULTS
9 Low Risk Auditee The City of Valdosta Board of Education qualified as a low nsk aud1tee as defined by Sect10n 530 of 0MB Circular A-133
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS Uncollaterahzed Deposits Reportable Cond111on Nonmaterial Noncompliance Finding Control Number: FS-7921-02-01
As of June 30, 2002, the School D1str1ct failed to have its bank balances fully collateralized as provided for by The Official Code of Georgia Annotated Sect10n 45-8-12 which states. in part, as follows
"The collectmg officer or officer holding public funds may not have on deposit at any one lime in any depository for a lime longer than ten days a ~um of money belonging to the public body when such depository has not given bond to the public body as set forth in this code section The aggregate of the face value of such surety bond and the market value of secunties pledged shall be equal to not less than 110 percent of the public funds being secured after the deducllon of the amount of deposit insurance "
This noncompliance occurred because of management's failure to adequately momtor the collateralizallon of balances at ind1v1dual banks The School D1stnct should implement adequate procedures to momtor the collateralizat10n of bank balances to ensure compliance at all limes wllh state laws governing deposits and investments.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Cond1llon - Material Weakness Repeated From Pnor Year Findmg Control Number: FS-7921-02-02
fhe City of Valdosta Board of Educat10n did not maintain a system-wide General Fixed Assets Account Group within the formal accountmg records as reqmred by generally accepted accountmg pnnc1ples This cond1llon results m the general-purpose financial statements of the School D1stnct bemg mcomplete and not m accordance wtth generally accepted accounting pnnc1ples Appropnate action should be taken by the School D1stnct to establish accountmg controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subs1d1ary records should include an mventory of land. bmldmgs and eqmpment owned by the School D1stnct and should
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CITY OF VALDOSTA BOARD OF EDUCATION - LOWNDES COUNTY SCHEDULE OF FlNDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 2002
11 FINANCIAL STATEMENT FlNDlNGS AND QUESTIONED COSTS GENERAL FIXED ASSETS Failure to Mamtam General Fixed Assets Account Group Reportable Cond11Ion - Matenal Weakness Repeated From Pnor Year Fmdmg Control Number FS-7921-02-02 mclude, but may not be hm1ted to, date acquired, acquis1hon cost, esl!mated replacement cost, locat10n and descnpllon Detailed records should be maintamed tor all add111ons and dclelions to the General Fixed Assets Account Group III FEDERAL AWARD FlNDINGS AND QUESTIONED COSTS No matters were reported
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