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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,sen 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 -8- 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- Commurpment Center W0110nill 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 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 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 -2 - 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 -3-