CIlY OF VIDALIA BOARD OF EDUCATION
TOOMBS COUNTY, GEORGIA
ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED
JUNE 30,2010 (Including Independent Auditor's Reports)

CITY OF VlDALlA BOARD OF EDUCATION - TOOMBS COUNTY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERALAWARDS

EXHIBlTS

BASIC FINANCIAL STATEMENTS

DISTRICT-WIDE FINANCIAL STATEMENTS

A

STATEMENT OF NET ASSETS

B

STATEMENT OF ACTIVITIES

FUND FINANCIAL STATEMENTS

C

BALANCE SHEET

GOVERNMENTAL FUNDS

D

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET ASSETS

E

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES

GOVERNMENTAL FUNDS

F

RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT

OF REVENUES, EXPENDITURES AND CHANGES IN FUND

BALANCES TO THE STATEMENT OF ACTIVITIES

G

STATEMENT OF FIDUCIARY NET ASSETS

FIDUCIARY FUNDS

H

STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS

FIDUCIARY FUNDS

I

NOTES TO THE BASIC FINANCIAL STATEMENTS

SCHEDULES

REQUIRED SUPPLEMENTARY INFORMATION

1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND

SUPPLEMENTARY INFORMATION

2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 3 SCHEDULE OF STATE REVENUE

CITY OF VlDALlA BOARD OF EDUCATION - TOOMBS COUNTY - TABLE OF CONTENTS -

SECTION I
FINANCIAL
SCHEDULES
SUPPLEMENTARY INFORMATION
4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 5 ALLOTMENTS AND EXPENDITURES
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) BY PROGRAM

Page

SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER M A l l E R S BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WlTH GOVERNMENTAUDlTlNG STANDARDS
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WlTH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WlTH OMB CIRCULAR A-133

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

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

CITY OF VlDALlA BOARD OF EDUCATION - TOOMBS COUNTY - TABLE OF CONTENTS -
SECTION V MANAGEMENT'S RESPONSES SCHEDULE OF MANAGEMENT'S RESPONSES

SECTION I FI NANClAL

Russell W. Hinton
STATE AUDITOR
(404)656-2174

DEPARTMENOTF AUDITSAND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
March 16.2011

Honorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Vidalia Board of Education
INDEPENDENTAUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information (ExhibitsA through I) of the City of Vidalia Board of Education, as of and for the year ended June 30, 2010, which collectively comprise the Board's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City of Vidalia Board of Education's management. Our responsibility is to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to previously present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Vidalia Board of Education, as of June 30, 2010, and the respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.
The City of Vidalia Board of Education has not presented Management's Discussion and Analysis that accounting principles generally accepted in the United States of America has determined is necessaryto supplement, although not to be part of, the basic financial statements.

In accordance with GovernmentAuditing Standards, we have also issued our report dated March 16, 2011, on our consideration of the City of Vidalia Board of Education's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Audithg Standards and should be considered in assessingthe results of our audit.
Accounting principles generally accepted in the United States of America require that the Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on page 25, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures, to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during the audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Vidalia Board of Education's financial statements as a whole. The accompanying supplementary information consists of Schedules 2 through 5, which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Prufit Organizations, are presented for purposes of additional analysis and are not a required part of the financial statements. Such information is the responsibility of management and was derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole.
A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated section 50-6-24.
Respectfully submitted,
~us)ell W. Hinton, CPA, CGFM State Auditor

CITY OF VlDALlA BOARD OF EDUCATION - TOOMBS COUNTY

CITY OF VIDALIA BOARD OF EDUCATION - TOOMBS COUNTY STATEMENT OF NET ASSETS JUNE 30.2010
ASSETS Cash and Cash Equivalents ~nvestments Accounts Receivable, Net
Taxes State Government Federal Government Local Other l nventories Capital Assets, Non-Depreciable Capital Assets, Depreciable (Net of Accumulated Depreciation)
Total Assets
LIABILITIES Salaries and Benefits Payable
NET ASSETS Invested in Capital Assets Restricted for
Bus Replacement Continuation of Federal Programs Unrestricted
Total Net Assets
Total Liab~litiesand Net Assets

EXHIBIT "A"
GOVERNMENTAL ACTIVITIES

The notes to the basic financial statements are an integral part of this statement. -1-

CITY OF VIDALIA BOARD OF EDUCATION- TOOMBS COUNTY
STATEMENT OF ACTIVITIES FOR THE YEAR ENDEDJUNE 30,2010

GOVERNMENTAL ACTIVITIES
Instruction Support Services
Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Malntenance and Operation of Plant Student Transportation Services Central Support Services Other Support S e ~ l c e s Operationsof Non-Instructional Services Enterprise Operations Community Services Food Services
Total Governmental Activities
General Revenues Taxes Property Taxes For Maintenance and Operations Sales Taxes Special Purpose Local Option Sales Tax For Capital Projects Grants and Contributions not Restrictedto Speciflc Programs Investment Earnings M~s~ellaneous
Total General Revenues
Change in Net Assets
Net Assets - Beginningof Year
Net Assets - End of Year

EXPENSES

CHARGES FOR SERVICES

The notes to the basic financial statements are an integral part of this statement.
- 2 -

PROGRAM REVENUES OPERATING GRANTS AND
CONTRIBUTIONS

CAPITAL GRANTS AND CONTRIBUTIONS

NET (EXPENSES) REVENUES
AND CHANGES IN NET ASSETS

CITY OF VIDALIA BOARD OF EDUCATION - TOOMBS COUNTY BAMNCE SHEET
GOVERNMENTAL FUNDS JUNE 30.2010

ASSETS
Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Local lnterfund Other Inventories
Total Assets

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

LIABILITIESAND FUND BALANCES
LIABILITIES
Accounts Payable- lnterfund
Salaries and Benefits Payable Deposits and Deferred Revenue
Total Liabilities
FUND BALANCES
Reserved for: Bus Replacement Continuation of Federal Programs
Unrese~ed Designated for Student Activities Undesignated Reported in: General Fund Capital Projects
Total Fund Balances
Total Liabilities and Fund Balances

EXHIBIT "C"
TOTAL

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

CIW OF VlDALlA BOARD OF EDUCATION - TOOMBS COUNTY RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS JUNE 30.2010
Total Fund Balances - Governmental Funds (Exhibit "C")
Amounts reportedfor GovernmentalActivities in the Statement of Net Assets are different because:
Capital Assets used in Governmental Activities are not financial resources and therefore are not rewrted in the funds. These assets conslst of:
Land Land Improvements Buildings Equipment Accumulated Depreciation
Total Capital Assets
Taxes that are not availableto pay for current period expendituresare deferred in the funds.
Net Assets of Governmental Activities (Exh~bi"tA")

EXHIBIT " D

The notes to the basic financial statements are an integral part of this statement. -5-

CITY OF VIDALIA BOARD OF EDUCATION - TOOMBS COUNTY STATEMENTOF REVENUES, EXPENDITURESAND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS YEAR ENDED JUNE 30,2010

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Enterprise Operations Community Servlces Food Services Operation
Capital Outlay
Total Expenditures
Net Change in Fund Balances
Fund Balances - Beginning
Fund Balances - Ending

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

EXHIBIT " E TOTAL

The notes to the basic financ~asl tatements are an integral part of this statement. 6-

CITY OF VlDALlA BOARD OF EDUCATION - TOOMBS COUNTY
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30,2010
Total Net Change in Fund Balances - Governmental Funds (Exhibit " E )
Amounts reported for GovernmentalActivities in the Statement of Activlties are different because:
Capital Outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activlties, the cost of Capital Assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are:
Capital Outlay Depreciation Expense
Excess of Capital Outlay over Depreciation Expense
Taxes reported In the Statement of Activities that do not provide current financial resourcesare not reported as revenues in the funds.
The net effect of various rnlscellaneoustransactions ~nvolvlngcapital assets (i.e., disposals) is to decrease net assets.
Change in Net Assets of GovernmentalActivities (Exhibit "B")

EXHIBIT "F"

The notes to the basic financial statements are an integral part of this statement. -7-

CITY OF VlDALlA BOARD OF EDUCATION - TOOMBS COUNTY
STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30,2010

ASSETS Cash and Cash Ecluivalents l nvestrnents
Total Assets

PRIVATE PURPOSE TRUSTS

LIABILITIES Funds Held for Others
NET ASSETS Held in Trust for Private Purposes
Total Liabilities and Net Assets

EXHIBIT "G"
AGENCY FUNDS

The notes to the basic financial statements are an integral part of this statement.
- 8 -

CITY OF VlDALlA BOARD OF EDUCATION - TOOMBS COUNTY STATEMENTOF CHANGES IN FIDUCIARYNET ASSETS FIDUCIARY FUNDS JUNE 30,2010
ADDITIONS Investment Earnings Net Increase (Decrease)in Fair Value of Investments Dividends Total Additions
DEDUCTIONS None Reported Change in Net Assets
Net Assets - Beginning
Net Assets - Ending

EXHIBIT "H"
PRIVATE PURPOSE TRUSTS

The notes to the basic financial statements are an integral part of this statement. - 9-

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CITY OF VIDALIA BOARD OF EDUCATION - TOOMBS COUNTY
NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2010

EXHIBIT "I"

NOTE 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY
REPORTING ENTITY
The City of Vidalia 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 Board is organized 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 District is a primary government and consists of all the organizations that compose its legal entity.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The School District's basic financial statements are collectively comprised of the District-wide financial statements, fund financial statements and notes to the basic financial statements of the City of Vidalia Board of Education.
District-wide Statements: The Statement of Net Assets and the Statement of Activities display information about the financial activities of the overall School District, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions.
The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities.
Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expensesof the School District related to the administration and support of the School District's programs, such as office and maintenance personnel and accounting) are not allocated to programs.
Program revenues include (a) charges paid by the recipients of goods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
Fund Financial Sbtemenk The fund financial statements provide information about the School District's funds, including fiduciary funds. Eliminations have been made to minimize the double counting of internal activities. Separate statements for each category (governmental and fiduciary) are presented. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column.
The School District reports the following major governmental funds:
General Fund is the School District's primary operating fund. It accounts for all financial resources of the School District, except those resources required to be accounted for in another fund.

CITY OF VIDAUA BOARD OF EDUCATION - TOOMBS COUNTY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2010

EXHIBlT "I"

District-wide Capital Projects Fund accounts for financial resources includingspecial Purpose Local Option Sales Tax (SPLOST) and grants from Georgia State Financing and Investment Commission to be used for the acquisition, construction or renovation of major capital facilities.
The School District reports the following fiduciary fund types:
Private Purpose Trust fund reports a trust arrangement under which income may be expended to provide college scholarships to Vidalia City High School seniors.
Agency funds account for assets held by the School District as an agent for various funds, governments or individuals.
BASIS OF ACCOUNTING
The basis of accounting determines when transactions are reported on the financial statements. The District-wide governmental and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, sales taxes, grants and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year in which the underlying transaction (sale) takes place. Revenue from grants and donations are recognized in the fiscal year in which all eligibility requirements have been satisfied.
The School District uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts.
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The School District considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred. Capital asset acquisitions are reported as expenditures in governmental funds.
The School District funds certain programs by a combination of specific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the School District's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues.

CITY OF VIDALIA BOARD OF EDUCATION - TOOMBS COUNTY NOTESTO M E BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "I"

The State of Georgia reimburses the School District for teachers' salaries and operating costs through the Quality Basic Education Formula Earnings program (QBE). Generally teachers are contracted for the school year (July 1- June 30) and paid over a twelve month contract period, generally September 1through August 31. In accordance with the respective rules and regulations of the QBE program, the State of Georgia reimburses the School District over the same twelve month period in which teachers are paid. At June 30, the amount of teachers' salaries incurred but not paid until July and August of the subsequent year are accrued. Since the State of Georgia recognizes its QBE liability for the July and August salaries at June 30, the School District recognizes the same QBE as a receivable and revenue, consistent with symmetrical recognition.
NEW ACCOUNTING PRONOUNCEMENTS
In fiscal year 2010, the School District adopted the Governmental Accounting and Standards Board (GASB) Statement No. 51, Accounting and Reporting for Intangible Asset3 The provisions of this Statement generally require retroactive reportingfor intangible assets acquired after June 30, 1980, with the exception of those intangible assets that have indefinite useful lives and those that are considered internally generated.
In addition, the School District adopted GASB Statement No. 53, Accounting and Financial Reporting for Derivative Instruments. The provisions of this Statement impacts disclosure regarding derivative instruments entered into by the state and local governments. Derivative disclosures, if any, will be identified in Note 3.
CASH AND CASH EQUIVALENTS
Composition of Deposits Cash and cash equivalents consist of cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Official Code of Georgia Annotated Section 45-8-14 authorizes the School District to deposit its funds in one or more solvent banks, insured Federal savings and loan associations or insured chartered building and loan associations.
INVESTMENTS
Composition of Investments lnvestments made by the School District in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interestearning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year and equity investments are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
1. Obligations issued by the State of Georgia or by other states,
2. Obligations issued by the United States government,
3. Obligations fully insured or guaranteed by the United States government or a United States government agency,

CrrY OF VIDALIA BOARD OF EDUCATION - TOOMBS COUNTY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2010

EXHIBIT "I"

4. Obligations of any corporation of the United States government,
5. Prime banker's acceptances,
6. The Georgia Fund 1administered by the State of Georgia, Office of Treasury and Fiscal Services,
7. Repurchase agreements, and
8. Obligations of other political subdivisions of the State of Georgia.
The School District does not have a formal policy regarding investment policies that address credit risks, custodial credit risks, concentration of credit risks, interest rate risks or foreign currency risks.
RECEIVABLES
Receivables consist of amounts due from property and sales taxes, grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the basic financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
PROPERTY TAXES
The City of Vidalia fixed the property tax levy for the 2009 tax digest year (calendar year) on December 11,2009 (levy date). Taxes were due on February 9, 2010 (lien date). Taxes collected within the current fiscal year or within 6 0 days after year-end on the 2009 tax digest are reported as revenue in the governmental funds for fiscal year 2010. The Vidalia City Clerk bills and collects the property taxes for the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30,2010, for maintenance and operations amounted to $3,864,688.74.
The tax millage rate levied for the 2009 tax year (calendar year) for the City of Vidalia Board of Education was as follows (a mill equals $1per thousand dollars of assessed value):

School Operations

15.00 mills

SALES TAXES
Special Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $2,212,621.08 and is to be used for capital outlay for educational purposes. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years.
INVENTORIES
Food Inventories On the basic financial statements, inventories of donated food commodities used in the preparation of meals are reported at their Federally assigned value and purchased foods inventories are reported at cost (first-in, first-out). The School District uses the consumption method to account for inventories whereby donated food commodities are recorded as an asset and as revenue when received, and expenses/expenditures are recorded as the inventory items are used. Purchased foods are recorded as an asset when purchased and expenses/expenditures are recorded as the inventory items are used.

CITY OF VIDALIA BOARD OF EDUCATION - TOOMBS COUNTY
NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2010

EXHIBIT "I"

CAPITAL ASSETS

Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund financial statements at the time of purchase (including ancillary charges). On the District-wide
financial statements, all purchased capital assets are valued at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at estimated fair market value on the date donated. Disposals are deleted at depreciated recorded cost. The cost of normal maintenance and repairs that do not add to the value of assets or materially extend the useful lives of the assets is not capitalized. Depreciation is computed using the straight-line method. The School District does not capitalize book collections or works of art. During the fiscal year under review, no events or changes in circumstances affecting a capital asset that may indicate impairment were known to the School District.

Capitalization thresholds and estimated useful lives of capital assets reported in the District-wide statements are as follows:

Capitalization Policy

Estimated Useful Life

Land Land Improvements Buildings and Improvements Equipment Intangible Assets

All

$

10,000.00

$

10,000.00

$

10,000.00

$ 100,000.00

N/A 6 0 years
25 to 6 0 years
1 0 to 1 5 years 1 0 years

Depreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives, with the exception of intangible assets which are amortized.

Amortization of intangible assets such as water, timber, and mineral rights, easements, patents, trademarks, copyrights and internally generated software is computed using the straight-line method over the estimated useful lives of the assets, for 10 years.

NET ASSETS

The School District's net assets in the District-wide Statements are classified as follows:

Invested in capital assets -This represents the School District's total investment in capital assets.

Restricted net assets - These represent resources for which the School District is legally or contractually obligated to spend resources for bus replacement and continuation of Federal Programs in accordance with restrictions imposed by external third parties.

Unrestricted net assets - Unrestricted net assets represent resources derived from property taxes, sales taxes, grants and contributions not restricted to specific programs, charges for services, and miscellaneous revenues. These resources are used for transactions relating to the educational and general operations of the School District, and may be used at the discretion of the Board to meet current expenses for those purposes.

CJTY OF VIDAUA BOARD OF EDUCATION - TOOMBS COUNTY
NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "I"

FUND BALANCES

Reserved Reserves represent those portions of fund balance equity that are legally segregated for a specific future use.
Unreserved - Designated
Designatedfund balances represent tentative plans for future use of financial resources.

DEFICIT FUND BALANCES

The fund reporting a deficit fund balance at June 30,2010, is as follows:

Fund Type/Fund Name

Deficit Balance

District-wideCapital Projects Fund

$ 171,761.72

The collection of SPLOST receipts in the subsequent period will fund the deficit.

USE OF EST1MATES

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates.

NOTE 3: DEPOSITS AND INVESTMENTS

COLLATERALIZATION OF DEPOSITS

Official Code of Georgia Annotated (O.C.G.A.) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent of the public funds being secured after the deduction of the amount of deposit insurance. If a depository elects the pooled method (O.C.G.A. Section 45-8-13.1) the aggregate of the market value of the securities pledged to secure a pool of public funds shall be not less than 1 1 0 percent of the daily pool balance.

Acceptable security for deposits consists of any one of or any combination of the following:

1. Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
2. lnsurance on accounts provided by the Federal Deposit lnsurance Corporation,
3. Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
4. Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,

CrPl OF VIDALIA BOARD OF EDUCATION - TOOMBS COUNTY
NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "I"

5. Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
6. Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and
7. Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by or securities guaranteed by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

CATEGORIZATION OF DEPOSITS

Custodial credit risk is the risk that in the event of a bank failure, the School District's deposits may not be returned to it. The School District does not have a deposit policy for custodial credit risk. At June 30, 2010, the bank balances were $2,013,333.81. The amounts exposed to custodial credit risk are classified into three categories as follows:

Category 1Category 2 -
Category 3 -

Uncollateralized, Cash collateralized with securities held by the pledging financial institution,
0 r
Cash collateralized with securities held by the pledging financial institution's trust department or agent but not in the School District's name.

The School District's deposits by custodial risk category at June 30, 2010, are as follows:

Custodial Credit Risk Category

Bank Balance

Total

$ 1,364,755.95

CATEGORIZATION OF INVESTMENTS
Custodial Credit Risk Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, the School District will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The School District does not have a formal policy for managing custodial credit risk.
At June 30, 2010, the fair value of the School District's total investments was $262.60 and this entire amount consisted of common stock which was insured or registered or sercurities held by the School District or the School District's agent in the School District's name.

CITY OF VIDAUA BOARD OF EDUCATION - TOOMBS COUNTY
NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2010

EXHIBIT "I"

NOTE 4: NON-MONETARY TRANSACTIONS

The School District receives food commodities from the United States Department of Agriculture
(USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally
assigned value. See Note 2 - Inventories

NOTE 5: CAPITAL ASSETS

The following is a summary of changes in the Capital Assets during the fiscal year:

Governmental Activities Capital Assets, Not B e ~ n gDepreciated:
Land Construction Work In Progress

Balances July 1,2009

increases

Decreases

Balances June 30,2010

$ 722,804.05 $ 6,289,465.67

0.00

$

$ 6,289,465.67

722,804.05 0.00

Total Capital Assets, Not Being Depreciated $ 7,012,269.72 $

0.00 $ 6,289,465.67 $ 722,804.05

Capital Assets, Being Depreciated: Buildings and Improvements Equipment Land Improvements

$ 18,870,794.04 $ 10,912,106.61 $

1,575.185.98

43,440.00

2,682,771.65

38,409.33 $ 29,744,491.32 1,618,625.98 2,682,771.65

Less: Accumulated Depreciation: Buildings and lmprovements Equipment Land lmprovements

Total Capital Assets, Being Depreciated, Net $ 16,871,492.08 $ 10,389,946.43 $

15,363.77 $ 27,246,074.74

Governmental Activity Capital Assets - Net $ 23,883,761.80 $ 10,389,946.43 $ 6,304,829.44 $ 27,968,878.79

Current year depreciation expense by function is as follows:
Instruction Support Services
Pupil Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Enterprise Operations Food Services

CITY OF VIDALIA BOARD OF EDUCATION - TOOMBS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "I"

NOTE 6: INTERFUNDASSETS AND LIABILITIES

Due to and due from other funds are recorded for interfund receivables and payables which arise from intetfund transactions. lnterfund balances at June 30, 2010, consisted of the following:

Due From Other Funds

Due To Other Funds

General Fund District-wideCapital Projects

Cash was borrowed from the General Fund to pay for some SPLOST project expenditures. These funds will be paid back with sales tax revenue.

NOTE 7: RISK MANAGEMENT

The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; acts of God and unemployment compensation.

The School District has obtained commercial insurance for risk of loss associated with torts, assets, and errors or omissions. The School District has neither significantly reduced coverage for these risks nor incurred losses (settlements) which 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 is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the same fund that the employee's salary and benefits were paid. Claims are accounted for with expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated.

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

Beginningof Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

The School District participates in the Georgia Education Workers' Compensation Trust, a public entity risk pool organized on December 1,1991, to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The School District pays an annual premium to the Trust for its general insurance coverage. Additional insurance coverage is

CrrY OF VIDALIA BOARD OF EDUCATION - TOOMBS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2010

EXHIBIT "I"

provided through an agreement by the Trust with the Midwest Employers Casualty Company to provide coverage for potential losses sustained by the Trust in excess of $700,000.00 loss per occurrence, up to the statutory limit. Employers' Liability insurance coverage is also provided by Midwest Employers Casualty Company to provide coverage for potential losses sustained by the Fund in excess of $700,000.00 loss per occurrence, up to $1,000,000.00, with an aggregate limit of $2,000,000.00.
The School District has purchased surety bonds to provide additional insurance coverage as follows:

Position Covered

Amount

Superintendent Board Treasurer Board Vice-Treasurer All Employees

NOTE 8: SHORT-TERM DEBT

The School District issues tax anticipation notes in advance of property tax collections, depositing the proceeds in its General Fund. This short-term debt is to provide cash for construction until SPLOST tax collections are received by the School District. Article IX, Section V, Paragraph V of the Constitution of the State of Georgia limits 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 repaid no later than December 3 1of the calendar year in which the debt was incurred.

Short-term debt activity for the fiscal year is as follows:

Beginning Balance

Issued

Redeemed

Ending Balance

Tax Anticipation Notes $

0.00 $

697.010.00 $

697,010.00 $

0.00

NOTE 9: ON-BEHALF PAYMENTS
The School District has recognized revenues and costs in the amount of $43,054.40 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies.
Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $26,410.89
Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $10,028.44
Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $6,615.07

CITY OF VIDALIA BOARD OF EDUCATION - TOOMBS COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "I"

NOTE 10: SIGNIFICANT CONTINGENT LIABILITIES
Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any costs which are disallowed under grant terms. The School District believes that such disallowances, if any, will be immaterial to its overall financial position.
The School District is a defendant in various legal proceedings pertainingto matters incidental to the performance of routine School District operations. The ultimate disposition of these proceedings is not presently determinable, but is not believed to be material to the basic financial statements.
NOTE 11: POST-EMPLOYMENT BENEFITS
GEORGIA SCHOOL PERSONNEL EMPLOYEES POST-EMPLOYMENT HEALTH BENEFIT FUND
Plan Description. The Georgia School Personnel Post-employment Health Benefit Fund (School OPEB Fund) is a cost-sharing multiple-employer defined benefit post-employment healthcare plan that covers eligible former employees of public school systems, libraries and regional educational service agencies. The School OPEB Fun provides health insurance benefits to eligible former employees and their qualified beneficiaries through the State Employees Health Insurance Plan administered by the Department of Community Health. The Official Code of Georgia Annotated (OCGA) assigns the authority to establish and amend the benefit provisions of the group health plans, including benefits for retirees, to the Board of Community Health (Board).
Funding Policy. The contribution requirements of plan members and participating employers are established by the Board in accordance with the current Appropriations Act and may be amended by the Board. Contributions of plan members or beneficiaries receiving benefits vary based on plan election, dependent coverage, and Medicare eligibility and election. On average, plan members pay approximately 25 percent of the cost of health insurance coverage.
Participating employers are statutorily required to contribute in accordance with the employer contribution rates established by the Board. The contribution rates are established to fund all benefits due under the health insurance plans for both active and retired employees based on projected "pay-as-you-go"financing requirements. Contributions are not based on the actuarially calculated annual required contribution (ARC) which represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years.
The combined active and retiree contribution rates established by the Board for employers participating in the School OPEB Fund were as follows for the fiscal year ended June 30, 2010:
For certificated teachers, librarians and regional educational service agencies:

July 2009 August 2009 -October 2009 November 2009 -June 2010

18.534% of covered payroll for August Coverage 14.492% of covered payrollfor September - November Coverage 18.534% of covered payrollfor December - July Coverage

For non-certificated school personnel:

July 2009 -June 2010

$162.72 per member per month plus Department of Education contribution of $22,838,311.00

CITY OF VIDAUA BOARD OF EDUCATION - TOOMBS COUNTY
NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBJT "I"

No additional contribution was required by the Board for fiscal year 2010 nor contributed to the State OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the State plan for other postemployment benefits and are subject to appropriation.

The School District's combined active and retiree contributions to the health insurance plans, which

equaled the required contribution, for the current fiscal year and the preceding two fiscal years were

as follows:

Percentage

Required

FiscaI Year

Contributed

Contribution

NOTE 12: RETIREMENT PLANS
TEACHERS RETIREMENTSYSTEM OF GEORGIA (TRS)
Plan Description. The TRS is a cost-sharing multiple-employer defined benefit plan created in 1943 by an act of the Georgia General Assembly to provide retirement benefits for qualifying employees in educational service. A Board of Trustees comprised of active and retired members and ex-officio State employees is ultimately responsible for the administration of TRS. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.
On October 25, 1996, the Board created the Supplemental Retirement Benefits Plan of the Georgia Teachers Retirement System (SRBP-TRS). SRBP-TRS was established as a qualified excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of TRS. The purpose of SRBP-TRS is to provide retirement benefits to employees covered by TRS whose benefits are otherwise limited by IRC Section 415. Beginning July 1,1997, all members and retired former members in TRS are eligible to participate in the SRBP-TRS whenever their benefits under TRS exceed the IRC Section 415 imposed limitation on benefits.
TRS provides service retirement, disability retirement, and survivor's benefits. The benefit structure of TRS is defined and may be amended by State statute. A member is eligible for normal service retirement after 3 0 years of creditable service, regardless of age, or after 1 0 years of service and attainment of age 60. A member is eligible for early retirement after 2 5 years of creditable service.
Normal retirement (pension) benefits paid to members are equal to 2% of the average of the member's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 4 0 years. Early retirement benefits are reduced by the lesser of one-twelfth of 7% for each month the member is below age 60 or by 7% for each year or fraction thereof by which the member has less than 3 0 years of service. It is also assumed that certain cost-of-living adjustments, based on the Consumer Price Index, will be made in future years. Retirement benefits are payable monthly for life. A member may elect to receive a partial lump-sum distribution in addition to a reduced monthly retirement benefit. Death, disability and spousal benefits are also available.

CITY OF VIDALIA BOARD OF EDUCATION - TOOMBS COUNTY
NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBlT "I"

Funding Policy. TRS is funded by member and employer contributions as adopted and amended by the Board of Trustees. Members become fully vested after 1 0 years of service. If a member terminates with less than 1 0 years of service, no vesting of employer contributions occurs, but the member's contributions may be refunded with interest. Member contributions are limited by State law to not less than 5% or more than 6% of a member's earnable compensation. Member contributions as adopted by the Board of Trustees for the fiscal year ended June 30, 2010, were 5.25% of annual salary. The member contribution rate will increase to 5.53%effective July 1,2010. Employer contributions required for fiscal year 2010 were 9.74%of annual salary as required by the June 30, 2007, actuarial valuation. The employer contribution rate will increase to 10.28% effective July 1,2010.

Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

(This page left intentionally blank)

CITY OF VlDALlA BOARD OF EDUCATION- TOOMBS COUNTY GENERAL FUND
SCHEDULE OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL
YEAR ENDED JUNE 30.2010

SCHEDULE "1"

REVENUES
Property Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current lnstructlon Support Sew~ces Pup11Sew~ces Improvementof lnstructlonal Serv~ces Educat~onaMl ed~aServices General Admlnlstration School Admlnlstratlon Busmess Admlnlstrat~on Maintenance and Operat~onof Plant Student Transportat~onSewlces Central Support Servlces Other Support SewIces Enterprise Operat~ons Comrnunlty Sew~cesOperat~ons Food Sewlces Ooeratlon
Total Expendltures
Excessof Revenuesover (under) Expend~tures
OTHER FINANCING SOURCES USES1
OperatingTransfers From Other Funds OperatingTransfersTo Other Funds
Total Other FinancingSources (Uses)
Net Change In Fund Balances
Fund Balances - Beg~nn~ng
Adjustments

NONAPPROPRIATED BUDGETS

ORIGINAL

FINAL

ACTUAL AMOUNTS

$

0.00 $

0.00

$

-124.460.55 $

-104,311.41 $

187,312.82

2,109,315.26

2,109,315.26

2,109,315.26

26.536.98

39,408.90

Fund Balances- End~ng
Notesto the Scheduleof Revenues. Ex~endlturesand Chanees In Fund Balances Budeet and Actual The accompanying scheduleof revenues,expenditures and changes ln fund balances budget and actual IS presented on the rnod~fiedaccrual bas~sof accountlng whlch 1s the bass of accountlng used In the presentation of the fund flnanclal statements.

See notes to the baslc financ~asl tatements.

CITY OFVlDALlA BOARD OF EDUCATIONTOOMBS COUNTY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30.2010

SCHEDULE "2"

FUNDING AGENCY PROGRAM/SRANT
Agriculture. U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program Nat~onaSl chool Lunch Program
Total Ch~ldNutrltlon Cluster
ather Programs Pass-Through From Georgia Department of Educat~on Food Services ARRA- Child Nutr~tlonDlscret~onaryGrants L~mltedAvailablllty
Total U. S. Department of Agr~culture
Education, U. S. Department of Educat~onTechnology State Grants Cluster Pass-Through From Georgia Department of Educat~on ARRA Education TechnologyState Grants
Special Education Cluster Pass-Through From Georg~aDepartment of Educat~on Special Education
ARRA - Grants to States
ARRA - Preschool Grants Grants to States Preschool Grants
Total S ~ e c ~Eadlucat~onCluster
State F~scaSl tablllrabon Fund Cluster Pass-Through From Georgia Department of Education ARRA- Educat~onState Grants
Title I. PartA Cluster Pass-Through From Georgia Department of Education ARRA - T~tleI Grants to Local Educatlonal Agencles Tltle I Grants to Local Educational Agencies
Total Title I, Part A Cluster
Other Programs Pass-Through From Georgia Department of Educat~on Career and Technical Educat~on- Bas~cGrants to States lmprov~ngTeacher Quality State Grants Rural Education
Total Other Programs
Total U. S. Department of Education
Health and Human Services, U. S. Department of Child Care and Development Fund Cluster Pass-Through From Bright From the Start: Georga Department of Early Care and Learning ARRA- Chlld Care and Development Block Grant
Total Federal F~nanclaAl ssstance
N/A = Not Available

CFDA NUMBER

PASSTHROUGH
ENTITY 1 D
NUMBER

EXPENDITURES IN PERIOD

anOF VIDALIA BOARD OF EDUCATION - TOOMBS COUNTY
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDEDJUNE 30,2010

SCHEDULE " 2

Notes to the Schedule of Exoendltures of Federal Awards
(1) Includes the Federally assigned value of donated commodltles for the F w d Donation Program In the amount of $130,234.25.
(2) Expenditures for the funds earned on the School Breakfast Program ($207.378.04) were not mainta~nedseparately and are lncluded in the 2010 Nat~onaSl chool Lunch Program.
Major Programsare identified by an asterisk (*) in front of the CFDA number.
The School Distrlct did not prov~deFederal Assistance to any Subrec~p~ent.
The accompanyingschedule of expenditures of Federal awards Includes the Federal grant actlvlty of the City of V~daliaBoard of Education and is presented on the m o d ~ f ~ aecdcrual bass of account~ngwhlch1s the bas~sof accounting used In the presentation of the fund f~nanc~satal tements.

See notes to the basic flnanclal statements.

CITY OF VlDALlA BOARD OF EDUCATION - TOOMBS COUNlY
SCHEDULE OF STATE REVENUE YEAR ENDEDJUNE 30,2010

SCHEDULE "3"

GRANTS Bright From the Start: Georgia Department of Early Care and Learning Pre-Kindergarten Program
Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program
- Primary Grades Early Intervention (1-3) Program
Upper ElementaryGrades (4-5) Program
Upper ElementaryGrades - Early Intervention (4-5) Program
Middle Grades (6-8) Program High School General Education ( 4 1 2 ) Program Vocational Laboratoty (9-12) Program Students with Disabilities Gifted Student - Category VI Remedial Education Program Alternative Education Program Media Center Program 20 Days Additional Instruction Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Categorical Grants Pupil Transportation Regular Sparsity Nursing Services Vocational Supervisors Mid-term Adjustment Hold-Harmless Education Equalization Funding Grant Food Services Vocational Education Amended Formula Adjustment 3 Day Furlough-Austerity Reduct~on Other State Programs Dual Enrollment Health Insurance National Teacher Certification Preschool Handicapped Program Teachers' Retirement Virtual Schools Grant
Georgia State Financingand Investment Commission Reimbursementon Construction Projects
Office of Treasury and Fiscal Services Public School Employees Retirement

GOVERNMENTAL FUND TYPES

CAPITAL

GENERAL

PROJECTS

FUND

FUND

TOTAL

See notes to the basic financial statements.

C I N OF VlDALlA BOARD OF EDUCATION- TOOMBS COUNN SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDEDJUNE30,2010

SCHEDULE "4"

PROJECT l
(I) TOpurchasetextbooks and addltlonal ~nstruct~onmalaterials and equipment for all sltes; (11)To expand technologyusage and Improve communlcatlon and safety capabllltles to Include but not be l~m~tetodthe upgradeof electr~cacl apaclty at JDDP. SDM, and VCHS, safety and securlty upgrades a t all fac~llt~es. and technology upgrades system-wlde. (111)To acqulre, Improve and malntain fac~l~tlefosr VCS to ~ncludebut not be l ~ m ~ t etodan athlet~c/physlcal education tralnlng faclllty at VCHS and JRT; kltchen expanslons at VCHS. SDM, and JDDP. and malntaln rooflng warranbes throughout the system. (IV) To expand and maintaln student transportatlon to ~ncludebut not be ilmlted to purchase of addlt~onasl tudent regular transportatlon and actlvlty buses
PROJECT II
TOpurchase textbooks and additional instructlonal mater~alsand equipment for all sites;
To renovate J.D. Dickerson Primary School and complete Phase Ill renovationsat Sally D. Meadows Elementary School;
To expand technology usage and improve mmmunicatlon and safety capabil~t~etos include but not be l~m~tetodthe upgrade of electrical capacity at J.D. DlckersonPrimary School, Sally D. Meadows Elementary School, and Vidalia Comprehensive High school, safety and securlty upgradesat all facllltles. and technology upgrades system-wide;
To acqulre, improve. and maintain facilit~esfor Vldalia Schools to include but not be llmlted to an athletic/phys~caltralnlngfaclllty at J.R. Trlppe Mlddle School; k~tchenexpansions at Vldalla Comprehensive H~ghSchool and J. D. Dlckerson PrlmalySchool. and ma~nta~ronoflngwarranties throughout the system;
To expand and malntaln student transportatlon to inciude but not be limlted to purchase of addit~onasl tudent regular transportation and actlvlty vehicles.

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT YEAR (3)

AMOUNT EXPENDED IN PRIOR YEARS (3)

$ 9,696,000.00 $ 12,283,121.00 $ 2.073.579.86 $ 10.209.541.14

6,160.000.00

6,160,000.00

700,000.00

700,000.00

PROJECT STATUS
Completed
Ongoing Ongoing

$ 27.936.000.00 $ 30.523.121.00 $ 4.120.231.11 $ 10,209,541.14

(1)The School District's orlgmal cost estlmate as specified In the resolution calling for the imposltlon of the Local Optlon Sales Tax.
(2) The School D~str~ctc'surrent estimate of total cost for the projects. Includes all cost from project Inception to mmpletlon.
(3) The voters of Toombs County approvedthe Imposition of a 1%sales tax to fund the above projects. Amounts expended for these projects may Include sales tax proceeds, state, local property taxes and/or other funds over the life of the projects.

See notes to the baslc flnanclal Statements.

(This page left intentionally blank)

CITY OF VlDALlA BOARD OF EDUCATIONTOOMBS COUNTY
GENERAL FUND -QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES - BY PROGRAM
YEAR ENDEDJUNE 30.2010

SCHEDULE " 5

DESCRIPTION
Direct lnstruct~onaPl rograms Kindergarten Program Kindergarten Program-Early Intewentlon Program Pr~maryGrades (1-3) Program Primary Grades-Early l n t e ~ e n t i o n(1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades-Early lntervent~on(4-5) Program Middle School ( 6 8 ) Program High School General Education (9-12) Program Vocational Laboratory (912)Program Students wlth Dlsablllties Category I Category II Category Ill Category IV
G~ftedStudent - Category VI
Remedial Education Program Alternative Education Program
TOTAL DIRECT INSTRUCTIONALPROGRAMS
Media Center Program Staff and Professional Development
TOTAL QBE FORMULA FUNDS

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)(2)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

(1) Comprlsed of State Funds plus Local Five Mill Share. (2) Allotments do nat include the lmpact of the State amended formula adjustment.

See notes to the bas~cfinancial statements.

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENOTF AUDITSAND ACCOUNTS
270 Washington Street, S.W., Suite 1- 156
Atlanta, Georgia 30334-8400
March 16,2011

Honorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Vidalia Board of Education
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MAlTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of City of Vidalia Board of Education as of and for the year ended June 30, 2010, which collectively comprise City of Vidalia Board of Education's basic financial statements and have issued our report thereon dated March 16, 2011. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered City of Vidalia Board of Education's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressingour opinions on the financial statements, but not for the purpose of expressingan opinion on the effectiveness of the City of Vidalia Board of Education's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City of Vidalia Board of Education's internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis.
Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be

material weaknesses, as defined above. However, we consider item FS-7931-10-01, described in the accompanying Schedule of Findings and Questioned Costs to be a significant deficiency in internal control over financial reporting. A significant deficienqv is a deficiency, or combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether City of Vidalia Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
We noted certain matters that we have reported to management of City of Vidalia Board of Education in a separate letter dated March 16, 2011.
City of Vidalia Board of Education's response to the finding identified in our audit is described in the accompanying Schedule of Management's Responses. We did not audit City of Vidalia Board of Education's response and, accordingly, we express no opinion on it.
This report is intended solely for the information and use of management, members of the City of Vidalia Board of Education, others within the entity, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
usd dell W. Hinton, CPA, CGFM
State Auditor

Russell W. Hinton
STATE AUDITOR
(404)656-2174

DEPARTMENOTF AUDITSAND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
March 16,2011

Honorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Vidalia Board of Education
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WlTH REOUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAIOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WlTH OMB CIRCULAR A-133
Ladies and Gentlemen:

We have audited City of Vidalia Board of Education's compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of its major Federal programs for the year ended June 30, 2010. City of Vidalia Board of Education's major Federal programs are identified in the Summary of Auditor's Results section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major Federal programs is the responsibility of City of Vidalia Board of Education's management. Our responsibility is to express an opinion on City of Vidalia Board of Education's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133,
Audits of States, Local Governments, and Nun-Profit Organtzations. Those standards and 0MB Circular
A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the City of Vidalia Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on City of Vidalia Board of Education's compliance with those requirements.
In our opinion, the City of Vidalia Board of Education complied, in all material respects, with the compliance requirements referred t o above that could have a direct and material effect on each of its major Federal programs for the year ended June 30,2010.

Internal Control Over Comlsliance
Management of City of Vidalia Board of Education is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to Federal programs. In planning and performing our audit, we considered City of Vidalia Board of Education's internal control over compliance with the requirements that could have a direct and material effect on a major Federal program to determine the auditing proceduresfor the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City of Vidalia Board of Education's internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a Federal program on a timely basis. A material weakness in internal control over compllbnce is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a Federal program will not be prevented, or detected and corrected, on a timely basis.
Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above.
This report is intended solely for the information and use of management, members of the City of Vidalia Board of Education, others within the entity, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
- RespectfuIly submitted, I
~ u s $ e lWl . Hinton, CPA, CGFM State Auditor

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

CITY OF VlDALlA BOARD OF EDUCATION - TOOMBS COUNTY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30,2010

PRIOR YEAR FINANCIALSTATEMENT FINDINGSAND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-793 1 - 0 8 - 0 1 FS-7931-09-01

Further Action Not Warranted Partially Resolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDlTURES/LIABILITIES/DISBURSEMENTS GENERAL LEDGER Inadequate Internal Controls over School Activity Accounts Finding Control Number: FS-7931-09-01

Additional controls are currently being implemented including but not limited to: dual signature requirements, new lock boxes and vaults, replacement of one school bookkeeper, and additional controls from the Central Office level as far as reporting requirements to insure that all procedures established in the handbook are actually being followed. We believe this finding will be resolved by the end of fiscal year 2011.

PRIOR YEAR FEDERAL AWARD FINDINGS AND OUESTIONED COSTS

No matters were reported.

SECTION IV FINDINGS AND QUESTIONED COSTS

CITY OF VlDALlA BOARD OF EDUCATION - TOOMBS COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30.2010

I SUMMARY OF AUDITOR'S RESULTS

Financial Statements

Type of auditor's report issue: Governmental Activities; General Fund; Capital Projects Fund; Aggregate Remaining Fund Information

Unqualified

Internal control over financial reporting:

Material weakness identified?

N 0

Significant deficiency identified?

Yes

Noncompliance material to financial statements noted:

Federal Awards

Internal Control over major programs: Material weakness identified? Significant deficiency identified?

N 0 None Reported

Type of auditor's report issued on compliance for major programs: All major programs

Unqualified

Any audit findings disclosed that are required to be reported in accordance with OMB Circular A-133, Section 510(a)?

Identification of major programs:

CFDA Nurnber(s)

Name of Federal Program or Cluster Title I, Part A Cluster Special Education Cluster State Fiscal Stabilization Fund Cluster

Dollar threshold used to distinguish between Type A and Type B programs:

Auditee qualified as low-risk auditee?

II FINANCIALSTATEMENT FINDINGS AND QUESTIONED COSTS

CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Internal Controls over School Activity Accounts Significant Deficiency Finding Control Number: FS-7931-10-01

Condition: This is a repeat finding (FS-7931-09-01 and FS-7931-08-01) from the years ended June 30, 2009, and June 30, 2008, respectively. The accounting procedures of the School District were insufficient to provide for adequate internal controls over the school activity accounts.

c l n OF VIDALIA BOARD OF EDUCATION - TOOMBSCOUNTY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30,2010
II FINANCIALSTATEMENT FINDINGSAND QUESTIONEDCOSTS
CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LlABILlTlES/DISBURSEMENTS Inadequate Internal Controls over School Activity Accounts Significant Deficiency Finding Control Number: FS-7931-10-01
Criteria: The School District's management is responsible for designing and maintaining internal controls that provide reasonable assurance that transactions are processed according to established procedures.
Questioned Cost: N/A
Information: Cash and Cash Equivalents: The bank reconciliation function was not separated from the check writing function.
Revenues/Receiva ble/Receipts: The cash receipts function was not separated from the record keepingfunction. Several receipts lacked adequate supporting documentation. One school failed to maintain adequate documentation for nonresident student tuition. The auditor was unable to determine if all fees collected were properly deposited and recorded. It was noted that several checks were erroneously written off as nonsufficient funds (NSF). The School District's policy regarding NSF checks was not followed and checks that were allegedly cashed were credited against revenue.
Expenditures/Liabilities/Disbursements: Instances were noted where vouchers did not contain complete purchase orders, invoices and/or lacked proper approvals for payments. Some checks were written with the amounts left blank and the vendor filled in the amounts. Some vouchers lacked evidence of receipt of goods.
These deficiencies lead to an apparent theft of funds. Charges have been filed in this case.
Cause: These deficiencies were a result of management's decision to limit the number of administrative staff made responsible for accounting functions and management's failure to ensure that internal controls were established, implemented and functioning at the school level.
Effect: Errors and/or irregularities may not be detected in a timely manner.

CITY OF VlDALlA BOARD OF EDUCATION - TOOMBS COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30,2010
II FINANCIALSTATEMENT FINDINGSAND QUESTIONEDCOSTS
CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Internal Controls over School Activity Accounts Significant Deficiency Finding Control Number: FS-7931-10-01
Recommendation: The School District should implement procedures to ensure that the key accounting functions of custody, record keeping and authorization are separated and/or utilize oversight for these incompatible activities. In addition, management should monitor controls to provide reasonable assurance that transactions are processed according to established policies and implement those procedures deemed necessary to strengthen internal controls over the accounting functions.
Ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.

SECTION V MANAGEMENT'S RESPONSES

CITY OF VlDALlA BOARD OF EDUCATION - TOOMBS COUNTY SCHEDULE OF MANAGEMENT'S RESPONSES YEAR ENDED JUNE 30,2010

Finding Control Number: FS-7931-10-01

We concur with this finding. The City of Vidalia Board of Education has established procedures for bank reconciliations to be reviewed by someone from the Central Office as well as the school principal. The cash receipts function will now require that two individuals will be made responsible for all deposits at the school level - both will sign off on the receipt and one will take deposits to the bank. New procedures have been established and standardized for handling Non-Sufficient Funds (NSF) checks and procedures have been established regarding transfer of funds. Periodic reviews will be done at the schools by a central office employee to make sure that supporting documentation is being properly provided for all revenue and that voucher packets are complete including purchase orders produced for all expenditures in a timely manner. The School Activities Account Handbook will be updated and reviewed with all bookkeepers and principals to reiterate proper procedures and establish internal controls to be implemented immediately. These procedures will be established by FY2011.

Contact Person: Telephone: Fax: Email:

Norma D. Croft, Finance Director (912) 537-3088 (912) 538-0938 ncroft@vidalia-cityk. 12.ga.u~