{"response":{"docs":[{"id":"dlg_ggpd_y-ga-ba800-b-pr1-be26-bf8-b2019-belec-p-btext","title":"Franklin County Board of Education, Carnesville, Georgia, annual financial report for the fiscal year ended 2019 June 30 (including independent auditor's reports)","collection_id":"dlg_ggpd","collection_title":"Georgia Government Publications","dcterms_contributor":["Georgia. Department of Audits and Accounts, issuing body."],"dcterms_spatial":["United States, Georgia, 32.75042, -83.50018"],"dcterms_creator":["Georgia. Department of Audits and Accounts"],"dc_date":["2021-03-02"],"dcterms_description":["Financial report of the Franklin County Board of Education."],"dc_format":["application/pdf"],"dcterms_identifier":null,"dcterms_language":["eng"],"dcterms_publisher":["Atlanta, Ga. : Georgia. Department of Audits and Accounts"],"dc_relation":null,"dc_right":["http://rightsstatements.org/vocab/InC/1.0/"],"dcterms_is_part_of":null,"dcterms_subject":["Franklin County Board of Education (Ga.)--Appropriations and expenditures--Periodicals","Education--Georgia--Franklin County--Auditing--Periodicals","Education--Georgia--Franklin County--Finance--Statistics--Periodicals"],"dcterms_title":["Franklin County Board of Education, Carnesville, Georgia, annual financial report for the fiscal year ended 2019 June 30 (including independent auditor's reports)"],"dcterms_type":["Text"],"dcterms_provenance":["University of Georgia. Map and Government Information Library"],"edm_is_shown_by":["https://dlg.galileo.usg.edu/do:dlg_ggpd_y-ga-ba800-b-pr1-be26-bf8-b2019-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-be26-bf8-b2019-belec-p-btext"],"dcterms_temporal":null,"dcterms_rights_holder":null,"dcterms_bibliographic_citation":null,"dlg_local_right":null,"dcterms_medium":["annual reports","state government records","audits","financial records","financial statements"],"dcterms_extent":null,"dlg_subject_personal":null,"iiif_manifest_url_ss":null,"dcterms_subject_fast":null,"fulltext":"FRANKLIN COUNTY BOARD OF EDUCATION \nCARNESVILLE, GEORGIA \nANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2019 \n(Including Independent Auditor's Reports) \n \n FRANKLIN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \n \nSECTION I \n \nFINANCIAL \n \nINDEPENDENT AUDITOR'S REPORT \n \nEXHIBITS \n \nBASIC FINANCIAL STATEMENTS \n \nGOVERNMENT-WIDE FINANCIAL STATEMENTS \n \nA \n \nSTATEMENT OF NET POSITION \n \nB \n \nSTATEMENT OF ACTIVITIES \n \nFUND FINANCIAL STATEMENTS \n \nC \n \nBALANCE SHEET \n \nGOVERNMENTAL FUNDS \n \nD \n \nRECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \n \nTO THE STATEMENT OF NET POSITION \n \nE \n \nSTATEMENT OF REVENUES, EXPENDITURES AND CHANGES \n \nIN FUND BALANCES \n \nGOVERNMENTAL FUNDS \n \nF \n \nRECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT \n \nOF REVENUES, EXPENDITURES AND CHANGES IN FUND \n \nBALANCES TO THE STATEMENT OF ACTIVITIES \n \nG \n \nSTATEMENT OF FIDUCIARY NET POSITION \n \nFIDUCIARY FUNDS \n \nH NOTES TO THE BASIC FINANCIAL STATEMENTS \n \nSCHEDULES \nREQUIRED SUPPLEMENTARY INFORMATION \n1 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY TEACHERS RETIREMENT SYSTEM OF GEORGIA \n2 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \n3 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA \n4 SCHEDULE OF PROPORTIONATE SHARE OF THE NET OPEB LIABILITY SCHOOL OPEB FUND \n \nPage \n1 2 4 5 6 7 8 10 \n35 36 37 38 \n \n FRANKLIN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \n \nSECTION I \nFINANCIAL \nSCHEDULES \nREQUIRED SUPPLEMENTARY INFORMATION \n5 SCHEDULE OF CONTRIBUTIONS  TEACHERS RETIREMENT SYSTEM OF GEORGIA 6 SCHEDULE OF CONTRIBUTIONS  EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA 7 SCHEDULE OF CONTRIBUTIONS  SCHOOL OPEB FUND 8 NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION 9 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES \nIN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND \nSUPPLEMENTARY INFORMATION \n10 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 11 SCHEDULE OF STATE REVENUE 12 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \n \nPage \n39 40 41 42 43 \n44 45 47 \n \nSECTION II \nCOMPLIANCE AND INTERNAL CONTROL REPORTS \nINDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS \nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE \n \nSECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS \n \nSECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS \n \n SECTION I FINANCIAL \n \n Greg S. Griffin \nSTATE AUDITOR \n(404) 656-2174 \n \nDEPARTMENT OF AUDITS AND ACCOUNTS \n270 Washington Street, S.W., Suite 4-101 Atlanta, Georgia 30334-8400 \n \nINDEPENDENT AUDITOR'S REPORT \n \nThe Honorable Brian P. Kemp, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the State Board of Education \nand Superintendent and Members of the Franklin County Board of Education \nReport on the Financial Statements \nWe have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Franklin County Board of Education (School District), as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the School District's basic financial statements as listed in the table of contents. \nManagement's Responsibility for the Financial Statements \nManagement is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. \nAuditor's Responsibility \nOur 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 Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. \nAn audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. \n \n We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. \nOpinions \nIn our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the of the governmental activities, each major fund, and the aggregate remaining fund information of the School District as of June 30, 2019, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. \nOther Matters \nRequired Supplementary Information \nManagement has omitted the Management's Discussion and Analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing 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. Our opinion on the basic financial statements is not affected by this missing information. \nAccounting principles generally accepted in the United States of America require that the required supplementary information listed in the table of contents 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 our 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. \nOther Information \nOur audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the School District's basic financial statements. The accompanying supplementary information, as listed in the table of contents, is presented for the purposes of additional analysis and is not a required part of the basic financial statements. The Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is also not a required part of the basic financial statements. \nThe accompanying supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional \n \n 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 basic financial statements taken as a whole. \nOther Reporting Required by Government Auditing Standards \nIn accordance with Government Auditing Standards, we have also issued our report dated March 2, 2021 on our consideration of the School District'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 solely 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 effectiveness of the School District's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the School District's internal control over financial reporting and compliance. \nA copy of this report has been filed as a permanent record and made available to the press of the State, as provided for by Official Code of Georgia Annotated section 50-6-24. \nRespectfully submitted, \n \nMarch 2, 2021 \n \nGreg S. Griffin State Auditor \n \n (This page left intentionally blank) \n \n FRANKLIN COUNTY BOARD OF EDUCATION \n \n FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF NET POSITION JUNE 30, 2019 \nASSETS \nCash and Cash Equivalents Receivables, Net \nTaxes State Government Federal Government Local Other Inventories Prepaid Items Capital Assets, Non-Depreciable Capital Assets, Depreciable (Net of Accumulated Depreciation) \nTotal Assets \nDEFERRED OUTFLOWS OF RESOURCES \nRelated to Defined Benefit Pension Plans Related to OPEB Plan \nTotal Deferred Outflows of Resources \nLIABILITIES \nAccounts Payable Salaries and Benefits Payable Payroll Withholdings Payable Interest Payable Retainages Payable Net Pension Liability Net OPEB Liability Long-Term Liabilities \nDue Within One Year Due in More Than One Year \nTotal Liabilities \nDEFERRED INFLOWS OF RESOURCES \nRelated to Defined Benefit Pension Plans Related to OPEB Plan \nTotal Deferred Inflows of Resources \nNET POSITION \nNet Investment in Capital Assets Restricted for \nContinuation of Federal Programs Debt Service Capital Projects Unrestricted (Deficit) \nTotal Net Position \nThe notes to the basic financial statements are an integral part of this statement. \n \nEXHIBIT \"A\" \nGOVERNMENTAL ACTIVITIES \n$ 12,191,647.09 746,555.62 \n3,073,514.18 596,612.98 17,888.89 85,135.26 38,775.55 85,692.11 \n9,718,247.42 61,215,988.47 87,770,057.57 \n7,127,927.00 1,763,820.00 8,891,747.00 \n1,196,306.76 4,581,347.88 \n447,913.33 52,504.50 \n670,650.75 30,902,423.00 30,927,768.00 \n2,718,866.67 3,523,866.66 75,021,647.55 \n1,190,607.00 5,942,797.00 7,133,404.00 \n65,627,440.60 302,029.50 \n2,027,182.89 1,125,005.84 (54,574,905.81) \n$ 14,506,753.02 \n- 1 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES \nFOR THE YEAR ENDED JUNE 30, 2019 \n \nGOVERNMENTAL ACTIVITIES \nInstruction Support Services \nPupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Operations of Non-Instructional Services Enterprise Operations Community Services Food Services Interest on Short-Term and Long-Term Debt \nTotal Governmental Activities \nGeneral Revenues Taxes Property Taxes For Maintenance and Operations Railroad Cars Sales Taxes Special Purpose Local Option Sales Tax For Debt Services Other Sales Tax Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous \nTotal General Revenues \nChange in Net Position \nNet Position - Beginning of Year \nNet Position - End of Year \n \nEXPENSES \n \nCHARGES FOR SERVICES \n \n$ 27,230,143.20 $ \n1,636,832.46 2,225,905.91 \n663,350.34 654,615.28 2,295,454.82 297,446.30 2,533,088.10 3,097,533.49 263,773.42 \n687,190.76 - \n1,929,921.37 218,776.73 \n$ 43,734,032.18 $ \n \n161,826.93 \n6,875.00 20,722.55 - \n683.95 338,597.17 \n- \n528,705.60 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 2 - \n \n EXHIBIT \"B\" \n \nPROGRAM REVENUES OPERATING GRANTS AND \nCONTRIBUTIONS \n \nCAPITAL GRANTS AND CONTRIBUTIONS \n \nNET (EXPENSES) REVENUES \nAND CHANGES IN NET POSITION \n \n$ \n \n19,145,272.89 $ \n \n402,292.78 730,947.19 507,308.00 656,995.82 1,095,609.00 \n4,989.38 1,124,385.86 \n702,599.45 49,411.99 \n \n1,376,164.41 - \n \n$ \n \n25,795,976.77 $ \n \n- $ \n154,440.00 - \n- \n154,440.00 \n \n(7,923,043.38) \n(1,234,539.68) (1,494,958.72) \n(156,042.34) 2,380.54 \n(1,199,845.82) (292,456.92) \n(1,401,827.24) (2,219,771.49) \n(214,361.43) \n(687,190.76) 683.95 \n(215,159.79) (218,776.73) \n(17,254,909.81) \n \n10,278,058.49 13,593.58 \n4,118,491.25 213,851.57 \n2,877,913.00 259,767.26 \n1,277,128.51 \n19,038,803.66 \n1,783,893.85 \n12,722,859.17 \n \n$ \n \n14,506,753.02 \n \n- 3 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION BALANCE SHEET \nGOVERNMENTAL FUNDS JUNE 30, 2019 \n \nEXHIBIT \"C\" \n \nASSETS \nCash and Cash Equivalents Receivables, Net \nTaxes State Government Federal Government Local Other Inventories Prepaid Items \n \nGENERAL FUND \n \nCAPITAL PROJECTS \nFUND \n \nDEBT SERVICE \nFUND \n \nTOTAL \n \n$ \n \n7,632,591.83 $ 2,835,461.30 $ 1,723,593.96 $ 12,191,647.09 \n \n390,462.19 3,073,514.18 \n596,612.98 17,888.89 85,135.26 38,775.55 85,692.11 \n \n- \n \n356,093.43 \n \n746,555.62 \n \n- \n \n- \n \n3,073,514.18 \n \n- \n \n- \n \n596,612.98 \n \n- \n \n- \n \n17,888.89 \n \n- \n \n- \n \n85,135.26 \n \n- \n \n- \n \n38,775.55 \n \n- \n \n- \n \n85,692.11 \n \nTotal Assets \nLIABILITIES \nAccounts Payable Salaries and Benefits Payable Payroll Withholdings Payable Retainages Payable \nTotal Liabilities \nDEFERRED INFLOWS OF RESOURCES \nUnavailable Revenue - Property Taxes \nFUND BALANCES \nNonspendable Restricted Assigned Unassigned \nTotal Fund Balances \n \n$ 11,920,672.99 $ 2,835,461.30 $ 2,079,687.39 $ 16,835,821.68 \n \n$ \n \n1,092,440.09 $ \n \n4,581,347.88 \n \n447,913.33 \n \n- \n \n6,121,701.30 \n \n103,866.67 $ - \n670,650.75 \n774,517.42 \n \n- $ - \n- \n \n1,196,306.76 4,581,347.88 \n447,913.33 670,650.75 \n6,896,218.72 \n \n113,731.06 \n \n- \n \n- \n \n113,731.06 \n \n124,467.66 263,253.95 517,592.93 4,779,926.09 \n5,685,240.63 \n \n2,060,943.88 \n- \n2,060,943.88 \n \n2,079,687.39 \n- \n2,079,687.39 \n \n124,467.66 4,403,885.22 \n517,592.93 4,779,926.09 \n9,825,871.90 \n \nTotal Liabilities, Deferred Inflows of Resources, and Fund Balances \n \n$ 11,920,672.99 $ 2,835,461.30 $ 2,079,687.39 $ 16,835,821.68 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 4 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \nTO THE STATEMENT OF NET POSITION JUNE 30, 2019 \n \nEXHIBIT \"D\" \n \nTotal fund balances - governmental funds (Exhibit \"C\") \nAmounts reported for governmental activities in the Statement of Net Position are different because: \nCapital assets used in governmental activities are not financial resources and therefore are not reported in the funds. \nLand Construction in progress Buildings and improvements Equipment Land improvements Intangible assets Accumulated depreciation \nSome liabilities are not due and payable in the current period and, therefore, are not reported in the funds. \nNet pension liability Net OPEB liability \nDeferred outflows and inflows of resources related to pensions/OPEB are applicable to future periods and, therefore, are not reported in the funds. \nRelated to pensions Related to OPEB \nTaxes that are not available to pay for current period expenditures are deferred in the funds. \nLong-term liabilities, and related accrued interest, are not due and payable in the current period and therefore are not reported in the funds. \nBonds payable Accrued interest payable Capital leases payable \n \n$ \n \n9,825,871.90 \n \n$ \n \n1,338,157.39 \n \n8,380,090.03 \n \n65,158,523.04 \n \n7,158,471.83 \n \n8,388,201.15 \n \n488,530.40 \n \n(19,977,737.95) \n \n70,934,235.89 \n \n$ (30,902,423.00) (30,927,768.00) \n \n(61,830,191.00) \n \n$ \n \n5,937,320.00 \n \n(4,178,977.00) \n \n1,758,343.00 113,731.06 \n \n$ \n \n(6,035,000.00) \n \n(52,504.50) \n \n(207,733.33) \n \n(6,295,237.83) \n \nNet position of governmental activities (Exhibit \"A\") \n \n$ 14,506,753.02 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 5 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES \nGOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2019 \n \nEXHIBIT \"E\" \n \nREVENUES \nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous \nTotal Revenues \nEXPENDITURES \nCurrent 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 Other Support Services Enterprise Operations Food Services Operation \nCapital Outlay Debt Services \nPrincipal Dues and Fees Interest \nTotal Expenditures \nRevenues over (under) Expenditures \nOTHER FINANCING SOURCES (USES) \nCapital Leases Transfers In Transfers Out \nTotal Other Financing Sources (Uses) \nNet Change in Fund Balances \nFund Balances - Beginning \n \nGENERAL FUND \n \nCAPITAL PROJECTS \nFUND \n \nDEBT SERVICE \nFUND \n \nTOTAL \n \n$ \n \n10,286,255.72 $ \n \n213,851.57 \n \n25,334,050.71 \n \n3,495,236.07 \n \n528,705.60 \n \n11,051.93 \n \n1,277,128.51 \n \n41,146,280.11 \n \n- $ \n \n- $ 10,286,255.72 \n \n- \n \n4,118,491.25 \n \n4,332,342.82 \n \n- \n \n- \n \n25,334,050.71 \n \n- \n \n- \n \n3,495,236.07 \n \n- \n \n- \n \n528,705.60 \n \n- \n \n248,715.33 \n \n259,767.26 \n \n- \n \n- \n \n1,277,128.51 \n \n- \n \n4,367,206.58 \n \n45,513,486.69 \n \n26,675,620.58 \n1,688,674.30 2,285,552.53 \n664,545.73 672,459.48 2,334,446.03 293,764.38 2,423,992.73 3,137,449.25 263,773.42 687,190.76 1,829,908.89 \n- \n- \n42,957,378.08 \n(1,811,097.97) \n \n- \n8,703,716.81 \n103,866.67 3,075.00 - \n8,810,658.48 \n(8,810,658.48) \n \n- \n- \n2,550,000.00 - \n189,835.81 \n2,739,835.81 \n1,627,370.77 \n \n26,675,620.58 \n1,688,674.30 2,285,552.53 \n664,545.73 672,459.48 2,334,446.03 293,764.38 2,423,992.73 3,137,449.25 263,773.42 687,190.76 1,829,908.89 8,703,716.81 \n2,653,866.67 3,075.00 \n189,835.81 \n54,507,872.37 \n(8,994,385.68) \n \n- \n- \n(1,811,097.97) \n7,496,338.60 \n \n311,600.00 2,815,461.37 \n(193,103.75) \n2,933,957.62 \n(5,876,700.86) \n7,937,644.74 \n \n193,103.75 (2,815,461.37) \n(2,622,357.62) \n(994,986.85) \n3,074,674.24 \n \n311,600.00 3,008,565.12 (3,008,565.12) \n311,600.00 \n(8,682,785.68) \n18,508,657.58 \n \nFund Balances - Ending \n \n$ \n \n5,685,240.63 $ 2,060,943.88 $ 2,079,687.39 $ \n \n9,825,871.90 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 6 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF \nREVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2019 \n \nEXHIBIT \"F\" \n \nNet change in fund balances total governmental funds (Exhibit \"E\") \nAmounts reported for governmental activities in the Statement of Activities are different because: \nGovernmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of capital assets is allocated over their estimated useful lives as depreciation expense. \nCapital outlay Depreciation expense \nTaxes reported in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. \nThe issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts and the difference between the carrying value of refunded debt and the acquisition cost of refunded debt when debt is first issued. These amounts are deferred and amortized in the Statement of Activities. \nBond principal retirements Capital leases issued Capital lease payments \nDistrict pension contributions are reported as expenditures in the governmental funds when made. However, they are reported as deferred outflows of resources in the Statement of Net Position because the reported net pension/OPEB liability is measured a year before the District's report date. Pension/OPEB expense, which is the change in the net pension/OPEB liability adjusted for changes in deferred outflows and inflows of resources related to pensions/OPEB, is reported in the Statement of Activities. \nPension expense OPEB expense \nSome items reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. \nAccrued interest on issuance of bonds \n \n$ (8,682,785.68) \n \n$ \n \n8,399,652.37 \n \n(1,478,804.70) \n \n6,920,847.67 5,396.31 \n \n$ \n \n2,550,000.00 \n \n(311,600.00) \n \n103,866.67 \n \n2,342,266.67 \n \n$ \n \n1,258,248.80 \n \n(34,214.00) \n \n1,224,034.80 \n \n(25,865.92) \n \nChange in net position of governmental activities (Exhibit \"B\") \n \n$ 1,783,893.85 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 7 - \n \n ASSETS Cash and Cash Equivalents \nInvestments Total Assets LIABILITIES \nFunds Held for Others \n \nFRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET POSITION \nFIDUCIARY FUNDS JUNE 30, 2019 \n \nEXHIBIT \"G\" \n \nAGENCY FUNDS \n \n$ \n \n139,750.37 \n \n21,953.97 \n \n161,704.34 \n \n$ \n \n161,704.34 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 8 - \n \n (This page left intentionally blank) \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2019 \n \nEXHIBIT \"H\" \n \nNOTE 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY \nREPORTING ENTITY \nThe Franklin County Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a board elected by the voters and a Superintendent appointed by the Board. The School District 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. \nNOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES \nThe accompanying financial statements of the School District have been prepared in conformity with generally accepted accounting principles (GAAP) as prescribed by the Governmental Accounting Standards Board (GASB). GASB is the accepted standard-setting body for governmental accounting and financial reporting principles. The most significant of the School District's accounting policies are described below. \nBASIS OF PRESENTATION \nThe School District's basic financial statements are collectively comprised of the government-wide financial statements, fund financial statements and notes to the basic financial statements. The government-wide statements focus on the School District as a whole, while the fund financial statements focus on major funds. Each presentation provides valuable information that can be analyzed and compared between years and between governments to enhance the information's usefulness. \nGOVERNMENT-WIDE STATEMENTS: \nThe Statement of Net Position 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. \nThe Statement of Net Position presents the School District's non-fiduciary assets and liabilities, with the difference reported as net position. Net position is reported in three categories as follows: \n1. Net investment in capital assets consists of the School District's total investment in capital assets, net of accumulated depreciation, and reduced by outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of net investment in capital assets. \n2. Restricted net position consists of resources for which the School District is legally or contractually obligated to spend in accordance with restrictions imposed by external third parties or imposed by law through constitutional provisions or enabling legislation. \n3. Unrestricted net position consists of resources not meeting the definition of the two preceding categories. Unrestricted net position often has constraints on resources imposed by management which can be removed or modified. \nThe Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities. \nDirect expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of 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. \n \n- 10 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2019 \n \nEXHIBIT \"H\" \n \nProgram 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. \nFUND FINANCIAL STATEMENTS \nThe 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 financial statements are presented for governmental and fiduciary funds. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column. \nThe School District reports the following major governmental funds: \n The general fund is the School District's primary operating fund. It accounts for and reports all financial resources not accounted for and reported in another fund. \n The capital projects fund accounts for and reports financial resources including Education Special Purpose Local Option Sales Tax (ESPLOST) and bond proceeds that are restricted, committed or assigned for capital outlay expenditures, including the acquisition or construction of capital facilities and other capital assets. \n The debt service fund accounts for and reports financial resources that are restricted, committed, or assigned including taxes (sales) legally restricted for the payment of general long-term principal and interest. \nThe School District reports the following fiduciary fund type: \n Agency funds are used to report resources held by the School District in a purely custodial capacity (assets equal liabilities) and do not involve measurement of results of operations. \nBASIS OF ACCOUNTING \nThe basis of accounting determines when transactions are reported on the financial statements. The government-wide 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 is recognized in the fiscal year in which all eligibility requirements have been satisfied. \nThe 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. \nGovernmental 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. The School District considers all intergovernmental revenues to be available if they are collected within 120 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, except for principal and interest on general longterm debt, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities are reported as other financing sources. \n- 11 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2019 \n \nEXHIBIT \"H\" \n \nThe 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. \nNEW ACCOUNTING PRONOUNCEMENTS \nIn fiscal year 2019, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 83, Certain Asset Retirement Obligations. This statement addresses accounting and financial reporting for certain asset retirement obligations (AROs). An ARO is a legally enforceable liability associated with the retirement of a tangible capital asset. A government that has legal obligations to perform future asset retirement activities related to its tangible capital assets should recognize a liability based on the guidance in this statement. The adoption of this statement did not have an impact on the School District's financial statements. \nIn fiscal year 2019, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements. The primary objective of this statement is to improve the information that is disclosed in notes to government financial statements related to debt, including direct borrowings and direct placements. It also clarifies which liabilities governments should include when disclosing information related to debt. The School District included additional information in the Long-Term Liabilities note disclosure. \nCASH AND CASH EQUIVALENTS \nCash and cash equivalents consist of cash on hand, demand deposits, investments in the State of Georgia local government investment pool (Georgia Fund 1) 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 (O.C.G.A.) 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. \nINVESTMENTS \nThe School District can invest its funds as permitted by O.C.G.A. 36-83-4. 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. \nInvestments made by the School District in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. All other investments are reported at fair value. \nFor accounting purposes, certificates of deposit are classified as investments if they have an original maturity greater than three months when acquired. \nRECEIVABLES \nReceivables 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. \n \n- 12 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2019 \n \nEXHIBIT \"H\" \n \nINVENTORIES Food Inventories \n \nOn 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 (calculated on the first-in, first-out basis). 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. \nPREPAID ITEMS \n \nPayments made to vendors for services that will benefit future accounting periods are recorded as prepaid items, in both the government-wide and governmental fund financial statements. \nCAPITAL ASSETS \n \nOn the government-wide financial statements, capital assets are recorded 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 the acquisition value on the date donated. 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. The School District does not capitalize book collections or works of art. \n \nCapital acquisition and construction are recorded as expenditures in the governmental fund financial statements at the time of purchase (including ancillary charges), and the related assets are reported as capital assets in the governmental activities column in the government-wide financial statements. \n \nDepreciation is computed using the straight-line for all assets, except land, and is used to allocate the actual or estimated historical cost of capital assets over estimated useful lives. \n \nCapitalization thresholds and estimated useful lives of capital assets reported in the government-wide statements are as follows: \n \nCapitalization Policy \n \nEstimated Useful Life \n \nLand Land Improvements Buildings and Improvements Equipment Intangible Assets \n \nAny Amount \n \n$ \n \n10,000.00 \n \n$ \n \n20,000.00 \n \n$ \n \n5,000.00 \n \n$ \n \n20,000.00 \n \nN/A 20 to 80 years 25 to 80 years \n5 to 50 years Estimated Life \n \nDEFERRED OUTFLOWS/INFLOWS OF RESOURCES \n \nIn addition to assets, the statement of financial position will report a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of resources that applies to a future period(s) and therefore will not be recognized as an outflow of resources (expense/expenditure) until then. \n \nIn addition to liabilities, the statement of financial position will report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of resources that applies to a future period(s) and therefore will not be recognized as an inflow of resources (revenue) until that time. \n \n- 13 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2019 \n \nEXHIBIT \"H\" \n \nLONG-TERM LIABILITIES AND BOND DISCOUNTS/PREMIUMS \nIn the School District's government-wide financial statements, outstanding debt is reported as liabilities. Bond premiums and discounts and the difference between the reacquisition price and the net carrying value of refunded debt are deferred and amortized over the life of the bonds using the straight-line method. To conform to generally accepted accounting principles, bond premiums and discounts should be amortized using the effective interest method. The effect of this deviation is deemed to be immaterial to the fair presentation of the basic financial statements. Bond issuance costs are recognized as an outflow of resources in the fiscal year in which the bonds are issued. \nIn the governmental fund financial statements, the School District recognizes the proceeds of debt and premiums as other financing sources of the current period. Bond issuance costs are reported as debt service expenditures. \nPENSIONS \nFor purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the pension plan's fiduciary net position and additions to/deductions from the plan's fiduciary net position have been determined on the same basis as they are reported by the plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. \nPOSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS (OPEB) \nFor purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the Georgia School Employees Postemployment Benefit Fund (School OPEB Fund) and additions to/deductions from School OPEB Fund fiduciary net position have been determined on the same basis as they are reported by School OPEB Fund. For this purpose, benefit payments are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. \nFUND BALANCES \nFund balance for governmental funds is reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. \nThe School District's fund balances are classified as follows: \nNonspendable consists of resources that cannot be spent either because they are in a nonspendable form or because they are legally or contractually required to be maintained intact. \nRestricted consists of resources that can be used only for specific purposes pursuant constraints either (1) externally imposed by creditors, grantors, contributors, or laws and regulations of other governments or (2) imposed by law through constitutional provisions or enabling legislation. \nCommitted consists of resources that can be used only for specific purposes pursuant to constraints imposed by formal action of the Board. The Board is the School District's highest level of decisionmaking authority, and the formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution approved by the Board. Committed fund balance also should incorporate contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements. \nAssigned consists of resources constrained by the School District's intent to be used for specific purposes but are neither restricted nor committed. The intent should be expressed by (1) the Board or (2) the budget or finance committee, or the Superintendent, or designee, to assign amounts to be used for specific purposes. \n \n- 14 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2019 \n \nEXHIBIT \"H\" \n \nUnassigned consists of resources within the general fund not meeting the definition of any aforementioned category. The general fund should be the only fund that reports a positive unassigned fund balance amount. In other governmental funds, it may be necessary to report a negative unassigned fund balance. \nUSE OF ESTIMATES \nThe 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. \nPROPERTY TAXES \nThe Franklin County Board of Commissioners adopted the property tax levy for the 2018 tax digest year (calendar year) on August 6, 2018 (levy date) based on property values as of January 1, 2018. Taxes were due on November 15, 2018 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2018 tax digest are reported as revenue in the governmental funds for fiscal year 2019. The Franklin County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2019, for maintenance and operations amounted to $9,335,802.88. \nThe tax millage rate levied for the 2018 tax year (calendar year) for the School District was as follows (a mill equals $1 per thousand dollars of assessed value): \n \nSchool Operations \n \n15.80 mills \n \nAdditionally, Title Ad Valorem Tax revenues, at the fund reporting level, amounted to $936,859.26 during fiscal year ended June 30, 2019. \nSALES TAXES \nEducation Special Purpose Local Option Sales Tax (ESPLOST), at the fund reporting level, during the year amounted to $4,118,491.25 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years. \nNOTE 3: BUDGETARY DATA \nThe budget is a complete financial plan for the School District's fiscal year and is based upon careful estimates of expenditures together with probable funding sources. The budget is legally adopted each year for the general, debt service and capital projects funds. There is no statutory prohibition regarding over expenditure of the budget at any level. The budget for all governmental funds, except for the various school activity (principal) accounts, is prepared and adopted by fund, function and object. The legal level of budgetary control was established by the Board at the aggregate function level. The budget for the general fund was prepared in accordance with accounting principles generally accepted in the United States of America. \nThe budgetary process begins with the School District's administration presenting an initial budget for the Board's review. The administration makes revisions as necessary based on the Board's guidelines, and a tentative budget is approved. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality, as well as the School District's website. At the next regularly scheduled meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final budget. \n \n- 15 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2019 \n \nEXHIBIT \"H\" \n \nThe approved budget is then submitted, in accordance with provisions of O.C.G.A. 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end. \nSee the General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances  Budget to Actual in the Supplementary Information Section for a detail of any over/under expenditures during the fiscal year under review. \nNOTE 4: DEPOSITS AND CASH EQUIVALENTS \nCOLLATERALIZATION OF DEPOSITS \nO.C.G.A.  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% 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.  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 110% of the daily pool balance. \nAcceptable security for deposits consists of any one of or any combination of the following: \n(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, \n(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, \n(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia, \n(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, \n(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, \n(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and \n(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. \nThe School District participates in the State's Secure Deposit Program (SDP), a multi-bank pledging pool. The SDP requires participating banks that accept public deposits in Georgia to operate under the policy and procedures of the program. The Georgia Office of State Treasurer (OST) sets the collateral requirements and pledging level for each covered depository. There are four tiers of collateralization levels specifying percentages of eligible securities to secure covered Deposits: 25%, 50%, 75%, and 110%. The SDP also provides for collateral levels to be increased in amount of up to 125% if economic or financial conditions warrant. The program lists the types of eligible collateral. The OST approves authorized custodians. \nIn accordance with the SDP, if a covered depository defaults, losses to public depositors are first satisfied with any applicable insurance, followed by demands of payment under any letters of credit or sale of the covered depository's collateral. If necessary, any remaining losses are to be satisfied by assessments made against the other participating covered depositories. Therefore, for disclosure purposes, all deposits of the SDP are considered to be fully collateralized. \n- 16 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2019 \n \nEXHIBIT \"H\" \n \nCATEGORIZATION OF DEPOSITS \n \nCustodial 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, 2019, the School District had deposits with a carrying amount of $5,204,494.40, and a bank balance of $5,553,340.22. The bank balances insured by Federal depository insurance were $771,964.52 and the bank balances collateralized with securities held by the pledging financial institution in the School District's name were $369,526.76. The bank balances included in the State's Secure Deposit Program (SDP) were $3,874,458.59. \nAt June 30, 2019, $537,390.35 of the School District's bank balance was exposed to custodial credit risk as follows: \n \nUninsured and Uncollateralized \n \n$ \n \n- \n \nUninsured with collateral held by the pledging \n \nfinancial institution \n \n- \n \nUninsured with collateral held by the pledging financial institution's trust department or agent but not in the School District's name \n \n537,390.35 \n \nTotal \n \n$ 537,390.35 \n \nReconciliation of cash and cash equivalents balances to carrying value of deposits: \n \nCash and cash equivalents Statement of Net Position Statement of Fiduciary Net Position \n \n$ 12,191,647.09 139,750.37 \n \nTotal cash and cash equivalents \n \n12,331,397.46 \n \nAdd: Deposits with original maturity of three months or more reported as investments \n \n21,953.97 \n \nLess: Cash on hand Investment pools reported as cash and cash equivalents \nGeorgia Fund 1 \n \n3,999.51 7,144,857.52 \n \nTotal carrying value of deposits - June 30, 2019 \n \n$ 5,204,494.40 \n \nCATEGORIZATION OF CASH EQUIVALENTS \nThe School District reported cash equivalents of $7,144,857.52 in Georgia Fund 1, a local government investment pool, which is included in the cash balances above. Georgia Fund 1 is not registered with the SEC as an investment company and does not operate in a manner consistent with the SEC's Rule 2a-7 of the Investment Company Act of 1940. The investment is valued at the pool's share price, $1.00 per share, which approximates fair value. The pool is an AAAf rated investment pool by Standard and Poor's. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2019 was 39 days. \nGeorgia Fund 1, administered by the State of Georgia, Office of the State Treasurer, is not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office of the State Treasurer for the Georgia Fund 1, does \n \n- 17 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2019 \n \nEXHIBIT \"H\" \n \nnot provide for investment in derivatives or similar investments. Additional information on the Georgia Fund 1 is disclosed in the State of Georgia Comprehensive Annual Financial Report. This audit can be obtained from the Georgia Department of Audits and Accounts at www.audits.ga.gov/SGD/CAFR.html. \nNOTE 5: CAPITAL ASSETS \n \nThe following is a summary of changes in the capital assets for governmental activities during the fiscal year: \n \nBalances July 1, 2018 \n \nIncreases \n \nDecreases \n \nBalances June 30, 2019 \n \nGovernmental Activities Capital Assets, Not Being Depreciated: \nLand Construction in Progress \n \n$ 1,338,157.39 $ \n \n- $ \n \n530,040.95 \n \n7,861,389.08 \n \n- $ 11,340.00 \n \n1,338,157.39 8,380,090.03 \n \nTotal Capital Assets Not Being Depreciated \n \n1,868,198.34 \n \n7,861,389.08 \n \n11,340.00 \n \n9,718,247.42 \n \nCapital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements Intangible Assets \nLess Accumulated Depreciation for: Buildings and Improvements Equipment Land Improvements Intangible Assets \n \n65,112,119.05 6,698,572.53 8,344,901.15 488,530.40 \n12,096,313.02 4,681,395.90 1,498,081.27 223,143.06 \n \n46,403.99 459,899.30 \n43,300.00 - \n879,722.61 385,831.15 143,741.81 \n69,509.13 \n \n- \n \n65,158,523.04 \n \n- \n \n7,158,471.83 \n \n- \n \n8,388,201.15 \n \n- \n \n488,530.40 \n \n- \n \n12,976,035.63 \n \n- \n \n5,067,227.05 \n \n- \n \n1,641,823.08 \n \n- \n \n292,652.19 \n \nTotal Capital Assets, Being Depreciated, Net \n \n62,145,189.88 \n \n(929,201.41) \n \n- \n \n61,215,988.47 \n \nGovernmental Activities Capital Assets - Net \n \n$ 64,013,388.22 $ 6,932,187.67 $ \n \n11,340.00 $ 70,934,235.89 \n \nCurrent year depreciation expense by function is as follows: \n \nInstruction Support Services \nEducational Media Services School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Food Services \n \n$ \n \n16,387.26 \n \n39,792.97 \n \n7,608.39 \n \n75,881.22 \n \n236,861.75 \n \n$ 1,011,979.18 \n376,531.59 90,293.93 \n$ 1,478,804.70 \n \n- 18 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2019 \n \nEXHIBIT \"H\" \n \nNOTE 6: INTERFUND TRANSFERS \n \nInterfund transfers for the year ended June 30, 2019, consisted of the following: \n \nTransfers to \n \nTransfers from \n \nCapital Projects Fund \n \nDebt Service Fund \n \nCapital Projects Fund Debt Service Fund \n \n$ \n \n- $ 2,815,461.37 \n \n193,103.75 \n \n- \n \nTotal \n \n$ 193,103.75 $ 2,815,461.37 \n \nTransfers are used to move sales tax revenues collected by the debt service fund to the capital projects fund to provide funding for capital construction projects. Transfers are used to move funds in capital projects fund to the debt service fund as needed for repayment of bond principal and interest. \nNOTE 7: LONG-TERM LIABILITIES \nThe changes in long-term liabilities during the fiscal year for governmental activities were as follows: \n \nBalance July 1, 2018 \n \nAdditions \n \nGovernmental Activities \n \nBalance \n \nDeductions \n \nJune 30, 2019 \n \nDue Within One Year \n \nGeneral Obligation (G.O) Bonds Capital Leases \n \n$ 8,585,000.00 $ \n \n- $ 2,550,000.00 $ 6,035,000.00 $ 2,615,000.00 \n \n- \n \n311,600.00 \n \n103,866.67 \n \n207,733.33 \n \n103,866.67 \n \n$ 8,585,000.00 $ 311,600.00 $ 2,653,866.67 $ 6,242,733.33 $ 2,718,866.67 \n \nThe School District's outstanding notes from direct borrowings and direct placements related to governmental activities of $6,035,000.00 contain a provision that in an event of default, outstanding amounts become immediately due if the School District is unable to make payment. \nGENERAL OBLIGATION DEBT OUTSTANDING \n \nThe School District's bonded debt consists of general obligation bonds that are generally noncallable with interest payable semiannually. Bond proceeds primarily pay for acquiring or constructing capital facilities. The School District repays general obligation bonds from voter-approved sales taxes. General obligation bonds are direct obligations and pledge the full faith and credit of the School District. \n \nOf the total amount originally authorized, $4,810,000.00 remains unissued. General obligation bonds currently outstanding are as follows: \n \nDescription \n \nInterest Rate \n \nIssue Date \n \nMaturity Date \n \nAmount Issued \n \nAmount Outstanding \n \nGeneral Government - Series 2018 \n \n2.61% \n \n4/26/2018 \n \n3/1/2023 $ 8,585,000.00 $ 6,035,000.00 \n \n- 19 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2019 \n \nEXHIBIT \"H\" \n \nThe following schedule details debt service requirements to maturity for the School District's total general obligation bonds payable: \n \nFiscal Year Ended June 30: \n \nGeneral Obligation Debt \n \nPrincipal \n \nInterest \n \n2020 2021 2022 2023 \n \n$ 2,615,000.00 $ 1,110,000.00 1,140,000.00 1,170,000.00 \n \n157,513.50 89,262.00 60,291.00 30,537.00 \n \nTotal Principal and Interest $ 6,035,000.00 $ \n \n337,603.50 \n \nCAPITAL LEASES \n \nDuring the current fiscal year, the School District entered into a lease agreement as lessee for financing the acquisition of computer equipment at a cost of $311,600.00. This lease qualifies as a capital lease for accounting purposes, and, therefore, has been recorded at the present value of the future minimum lease payments as of the date of inception. \n \nCapital leases currently outstanding are as follows: \n \nPurpose \n \nInterest Rate \n \nIssue Date \n \nMaturity Date \n \nAmount Issued \n \nAmount Outstanding \n \nComputer Equipment \n \n0.00% \n \n6/10/2019 \n \n6/10/2021 $ \n \n311,600.00 $ \n \n207,733.33 \n \nThe following is a schedule of total capital lease payments: \n \nFiscal Year Ended June 30: \n \nPrincipal \n \n2020 2021 \n \n$ \n \n103,866.67 \n \n103,866.66 \n \nTotal Principal \n \n$ \n \n207,733.33 \n \nNOTE 8: RISK MANAGEMENT \nINSURANCE \nCommercial Insurance \nThe 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; and natural disasters. Except as described below, the School District carries commercial insurance for these risks. Settled claims resulting from these insured risks have not exceed commercial insurance coverage in any of the past three fiscal years. \nGeorgia School Boards Association Risk and Insurance Management System \nThe School District participates in the Georgia School Boards Association Risk and Insurance Management System (the System), a public entity risk pool organized on July 1, 1994, to develop and administer a plan to reduce risk of loss on account of general liability, motor vehicle liability, or property damage, including safety engineering and other loss prevention and control techniques, and to administer one or more groups of self-insurance funds, including the processing and defense of claims brought against members of the system. The School District pays an annual premium to the System for its general insurance coverage. Additional coverage is provided through agreements by the System \n \n- 20 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2019 \n \nEXHIBIT \"H\" \n \nwith other companies according to their specialty for property, boiler and machinery (including coverage for flood and earthquake), general liability (including coverage for sexual harassment, molestation and abuse), errors and omissions, crime and automobile risks. Payment of excess insurance for the System varies by line of coverage. \nWORKERS' COMPENSATION \nGeorgia Education Workers' Compensation Trust \n \nThe School District participates in the Georgia Education Workers' Compensation Trust (the 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 workers' compensation insurance coverage. Specific excess of loss insurance coverage is provided through an agreement by the Trust with the Safety National Casualty Company to provide coverage for potential losses sustained by the Trust in excess of $1.0 million loss per occurrence, up to the statutory limit. Employers' Liability insurance coverage is also provided with limits of $2.0 million. The Trust covers the first $1.0 million of each Employers Liability claim with Safety National providing additional Employers Liability limits up to a $2.0 million per occurrence maximum. Safety National Casualty Company also provides $2.0 million in aggregate coverage to the Trust, attaching at 110% of the loss fund and based on the Fund's annual normal premium. \nUNEMPLOYMENT COMPENSATION \n \nThe School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the general fund with expenses/expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. \n \nChanges in the unemployment compensation claims liability during the last two fiscal years are as follows: \n \nBeginning of Year Liability \n \nClaims and Changes in Estimates \n \nClaims Paid \n \nEnd of Year Liability \n \n2018 $ \n \n- \n \n$ \n \n1,038.00 \n \n$ \n \n1,038.00 \n \n$ \n \n- \n \n2019 $ \n \n- \n \n$ \n \n1,593.00 \n \n$ \n \n1,593.00 \n \n$ \n \n- \n \nSURETY BOND \n \nThe School District purchased a surety bond to provide additional insurance coverage as follows: \n \nPosition Covered \n \nAmount \n \nSuperintendent \n \n$ 100,000.00 \n \n- 21 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2019 \n \nEXHIBIT \"H\" \n \nNOTE 9: FUND BALANCE CLASSIFICATION DETAILS \n \nThe School District's financial statements include the following amounts presented in the aggregate at June 30, 2019: \n \nNonspendable \n \nInventories \n \n$ \n \n38,775.55 \n \nPrepaid Assets \n \n85,692.11 $ \n \n124,467.66 \n \nRestricted \n \nContinuation of Federal Programs \n \n$ \n \n263,253.95 \n \nCapital Projects \n \n2,060,943.88 \n \nDebt Service \n \n2,079,687.39 \n \n4,403,885.22 \n \nAssigned \n \nSchool Activity Accounts \n \n517,592.93 \n \nUnassigned \n \n4,779,926.09 \n \nFund Balance, June 30, 2019 \n \n$ \n \n9,825,871.90 \n \nWhen multiple categories of fund balance are available for expenditure, the School District will start with the most restricted category and spend those funds first before moving down to the next category with available funds. \nNOTE 10: SIGNIFICANT COMMITMENTS \nCOMMITMENTS UNDER CONSTRUCTION CONTRACTS \n \nThe following is an analysis of significant outstanding construction or renovation contracts executed by the School District as of June 30, 2019: \n \nProject \n \nUnearned Executed Contracts (1) \n \nPayments through June 30, 2019 (2) \n \nCarnesville Intermediate Elementary School Addition \n \n$ \n \nFranklin County High School Career Academy \n \nFranklin County Middle School Field House \n \nLavonia Elementary HVAC Replacement \n \n3,582,792.86 $ 435,143.41 252,953.40 207,283.35 \n \n263,317.72 7,456,040.59 \n239,592.60 338,802.25 \n \n$ \n \n4,478,173.02 $ \n \n8,297,753.16 \n \n(1) The amounts described are not reflected in the basic financial statements. (2) Payments include retainages payable at year end. \n \nNOTE 11: SIGNIFICANT CONTINGENT LIABILITIES \nFEDERAL GRANTS \nAmounts 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. Any disallowances resulting from the grantor audit may become a liability of the School District. However, the School District believes that such disallowances, if any, will be immaterial to its overall financial position. \n \n- 22 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2019 \n \nEXHIBIT \"H\" \n \nLITIGATION \nThe School District is a defendant in various legal proceedings pertaining to 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 have a material adverse effect on the financial condition of the School District. \nNOTE 12: OTHER POST-EMPLOYMENT BENEFITS (OPEB) \nGEORGIA SCHOOL PERSONNEL POST-EMPLOYMENT HEALTH BENEFIT FUND \nPlan Description: Certified teachers and non-certified public school employees of the School District as defined in 20-2-875 of the Official Code of Georgia Annotated (O.C.G.A.) are provided OPEB through the School OPEB Fund - a cost-sharing multiple-employer defined benefit postemployment healthcare plan, reported as an employee trust fund and administered by a Board of Community Health (Board). Title 20 of the O.C.G.A. assigns the authority to establish and amend the benefit terms of the group health plan to the Board. \nBenefits Provided: The School OPEB Fund provides healthcare benefits for retirees and their dependents due under the group health plan for public school teachers, including librarians, other certified employees of public schools, regional educational service agencies and non-certified public school employees. Retiree medical eligibility is attained when an employee retires and is immediately eligible to draw a retirement annuity from Employees' Retirement System (ERS), Georgia Judicial Retirement System (JRS), Legislative Retirement System (LRS), Teachers Retirement System (TRS) or Public School Employees Retirement System (PSERS). If elected, dependent coverage starts on the same day as retiree coverage. Medicare-eligible retirees are offered Standard and Premium Medicare Advantage plan options. Non-Medicare eligible retiree plan options include Health Reimbursement Arrangement (HRA), Health Maintenance Organization (HMO) and a High Deductible Health Plan (HDHP). The School OPEB Fund also pays for administrative expenses of the fund. By law, no other use of the assets of the School OPEB Fund is permitted. \nContributions: As established by the Board, the School OPEB Fund is substantially funded on a payas-you-go basis; that is, annual cost of providing benefits will be financed in the same year as claims occur. Contributions to the School OPEB Fund from the School District were $1,347,712.00 for the year ended June 30, 2019. Active employees are not required to contribute to the School OPEB Fund. \nOPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB \nAt June 30, 2019, the School District reported a liability of $30,927,768.00 for its proportionate share of the net OPEB liability. The net OPEB liability was measured as of June 30, 2018. The total OPEB liability used to calculate the net OPEB liability was based on an actuarial valuation as of June 30, 2017. An expected total OPEB liability as of June 30, 2018 was determined using standard roll-forward techniques. The School District's proportion of the net OPEB liability was actuarially determined based on employer contributions during the fiscal year ended June 30, 2018. At June 30, 2018, the School District's proportion was 0.243340%, which was an increase of 0.001521% from its proportion measured as of June 30, 2017. \n \n- 23 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2019 \n \nEXHIBIT \"H\" \n \nFor the year ended June 30, 2019, the School District recognized OPEB expense of $1,381,926.00. At June 30, 2019, the School District reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: \n \nDeferred Outflows of Resources \n \nOPEB \n \nDeferred Inflows of Resources \n \nDifferences between expected and actual \n \nexperience \n \n$ \n \n- $ \n \n703,485.00 \n \nChanges of assumptions \n \n- \n \n5,239,312.00 \n \nNet difference between projected and actual \n \nearnings on OPEB plan investments \n \n41,845.00 \n \n- \n \nChanges in proportion and differences \n \nbetween School District contributions and \n \nproportionate share of contributions \n \n374,263.00 \n \n- \n \nSchool District contributions subsequent to \n \nthe measurement date \n \n1,347,712.00 \n \n- \n \nTotal \n \n$ 1,763,820.00 $ 5,942,797.00 \n \nSchool District contributions subsequent to the measurement date are reported as deferred outflows of resources and will be recognized as a reduction of the net OPEB liability in the year ended June 30, 2020. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: \n \nYear Ended June 30: \n \nOPEB \n \n2020 2021 2022 2023 2024 2025 \n \n$ (1,071,107.00) $ (1,071,107.00) $ (1,071,107.00) $ (1,073,607.00) $ (893,497.00) $ (346,264.00) \n \n- 24 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2019 \n \nEXHIBIT \"H\" \n \nActuarial assumptions: The total OPEB liability as of June 30, 2018 was determined by an actuarial valuation as of June 30, 2017 using the following actuarial assumptions and other inputs, applied to all periods included in the measurement and rolled forward to the measurement date of June 30, 2018: \nOPEB: \n \nInflation \n \n2.75% \n \nSalary increases \n \n3.25% - 9.00%, including inflation \n \nLong-term expected rate of return \nHealthcare cost trend rate \n \n7.30%, compounded annually, net of investment expense, and including inflation \n \nPre-Medicare Eligible Medicare Eligible Ultimate trend rate \n \n7.50% 5.50% \n \nPre-Medicare Eligible Medicare Eligible Year of Ultimate trend rate \n \n4.75% 4.75% \n \nPre-Medicare Eligible Medicare Eligible \n \n2028 2022 \n \nMortality rates were based on the RP-2000 Combined Mortality Table for Males or Females, as appropriate, with adjustments for mortality improvements based on Scale BB as follows: \n \n For TRS members: The RP-2000 White Collar Mortality Table projected to 2025 with projection \nscale BB (set forward 1 year for males) is used for death after service retirement and beneficiaries. The RP-2000 Disabled Mortality Table projected to 2025 with projection scale BB (set forward two years for males and four years for females) is used for death after disability retirement. \n For PSERS members: The RP-2000 Blue-Collar Mortality Table projected to 2025 with \nprojection scale BB (set forward 3 years for males and 2 years for females) is used for the period after service retirement and for beneficiaries of deceased members. The RP-2000 Disabled Mortality Table projected to 2025 with projection scale BB (set forward 5 years for both males and females) is used for the period after disability retirement. \n \nThe actuarial assumptions used in the June 30, 2017 valuation were based on the results of an actuarial experience study for the pension systems, which covered the five-year period ending June 30, 2014. \nThe remaining actuarial assumptions (e.g., initial per capita costs, health care cost trends, rate of plan participation, rates of plan election, etc.) used in the June 30, 2017 valuation were based on a review of recent plan experience done concurrently with the June 30, 2017 valuation. \nProjection of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculation. \n \n- 25 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2019 \n \nEXHIBIT \"H\" \n \nThe long-term expected rate of return on OPEB plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected \nnominal returns, net of investment expense and the assumed rate of inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by \nweighting the expected future real rates of return by the target asset allocation percentage and by \nadding expected inflation. During fiscal year 2018, the School OPEB fund updated their investment \nstrategy to a more long-term approach. The target allocation and best estimates of arithmetic real \nrates of return for each major asset class are summarized in the following table: \n \nAsset class \n \nTarget allocation \n \nLong-Term Expected Real Rate of Return* \n \nFixed income Domestic Stocks -- Large Cap Domestic Stocks -- Mid Cap Domestic Stocks -- Small Cap Int'l Stocks - Developed Mkt Int'l Stocks - Emerging Mkt Alternatives \n \n30.00% 37.20% \n3.40% 1.40% 17.80% 5.20% 5.00% \n \n(0.50)% 9.00% \n12.00% 13.50% \n8.00% 12.00% 10.50% \n \nTotal \n \n100.00% \n \n*Net of Inflation \nDiscount Rate: The discount rate has changed since the prior measurement date from 3.58% to 3.87%. In order to measure the total OPEB liability for the School OPEB Fund, a single equivalent interest rate of 3.87% was used as the discount rate. This is comprised mainly of the yield or index rate for 20-year tax-exempt general obligation municipal bonds with an average rating of AA or higher (3.87% per the Bond Buyers Index). The projection of cash flows used to determine the discount rate assumed that contributions from members and from the employer will be made at the current level as averaged over the last five years, adjusted for annual projected changes in headcount. Projected future benefit payments for all current plan members were projected through 2118. Based on these assumptions, the OPEB plan's fiduciary net position was projected to be available to make OPEB payments for inactive employees through year 2018. Therefore, the calculated discount rate of 3.87% was applied to all periods of projected benefit payments to determine the total OPEB liability. \nSensitivity of the School District's proportionate share of the net OPEB liability to changes in the discount rate: The following presents the School District's proportionate share of the net OPEB liability calculated using the discount rate of 3.87%, as well as what the School District's proportionate share of the net OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (2.87%) or 1 percentage-point higher (4.87%) than the current discount rate: \n \n1% Decrease (2.87%) \n \nCurrent Discount Rate (3.87%) \n \n1% Increase (4.87%) \n \nSchool District's proportionate share of the Net OPEB Liability \n \n$ 36,113,935.00 $ \n \n30,927,768.00 $ 26,745,665.00 \n \nSensitivity of the School District's proportionate share of the net OPEB liability to changes in the healthcare cost trend rates: The following presents the School District's proportionate share of the net \nOPEB liability, as well as what the School District's proportionate share of the net OPEB liability would \nbe if it were calculated using healthcare cost trend rates that are 1-percentage-point lower or 1- \npercentage-point higher than the current healthcare cost trend rates: \n \n1% Decrease \n \nCurrent Healthcare Cost Trend Rate \n \n1% Increase \n \nSchool District's proportionate share of the Net OPEB Liability \n \n$ 26,001,223.00 $ \n \n30,927,768.00 $ 37,223,709.00 \n \n- 26 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2019 \n \nEXHIBIT \"H\" \n \nOPEB plan fiduciary net position: Detailed information about the OPEB plan's fiduciary net position is available in the Comprehensive Annual Financial Report (CAFR) which is publicly available at https://sao.georgia.gov/comprehensive-annual-financial-reports. \nNOTE 13: RETIREMENT PLANS \nThe School District participates in various retirement plans administered by the State of Georgia, as further explained below. \nTEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) \nPlan Description: All teachers of the School District as defined in O.C.G.A 47-3-60 and certain other support personnel as defined by 47-3-63 are provided a pension through the Teachers Retirement System of Georgia (TRS). TRS, a cost-sharing multiple-employer defined benefit pension plan, is administered by the TRS Board of Trustees (TRS Board). Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. The Teachers Retirement System of Georgia issues a publicly available separate financial report that can be obtained at www.trsga.com/publications. \nBenefits Provided: TRS provides service retirement, disability retirement, and death benefits. Normal retirement benefits are determined as 2% of the average of the employee's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. An employee is eligible for normal service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. Ten years of service is required for disability and death benefits eligibility. Disability benefits are based on the employee's creditable service and compensation up to the time of disability. Death benefits equal the amount that would be payable to the employee's beneficiary had the employee retired on the date of death. Death benefits are based on the employee's creditable service and compensation up to the date of death. \nContributions: Per Title 47 of the O.C.G.A., contribution requirements of active employees and participating employers, as actuarially determined, are established and may be amended by the TRS Board. Pursuant to O.C.G.A. 47-3-63, the employer contributions for certain full-time public school support personnel are funded on behalf of the employer by the State of Georgia. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees were required to contribute 6.00% of their annual pay during fiscal year 2019. The School District's contractually required contribution rate for the year ended June 30, 2019 was 20.90% of annual School District payroll, of which 20.76% of payroll was required from the School District and 0.14% of payroll was required from the State. For the current fiscal year, employer contributions to the pension plan were $4,374,883.00 and $29,582.01 from the School District and the State, respectively. \nEMPLOYEES' RETIREMENT SYSTEM \nPlan Description: The Employees' Retirement System of Georgia (ERS) is a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly during the 1949 Legislative Session for the purpose of providing retirement allowances for employees of the State of Georgia and its political subdivisions. ERS is directed by a Board of Trustees. Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. ERS issues a publicly available financial report that can be obtained at www.ers.ga.gov/formspubs/formspubs. \nBenefits Provided: The ERS Plan supports three benefit tiers: Old Plan, New Plan, and Georgia State Employees' Pension and Savings Plan (GSEPS). Employees under the old plan started membership prior to July 1, 1982 and are subject to plan provisions in effect prior to July 1, 1982. Members hired on or after July 1, 1982 but prior to January 1, 2009 are new plan members subject to modified plan provisions. Effective January 1, 2009, new state employees and rehired state employees who did not retain membership rights under the Old or New Plans are members of GSEPS. ERS members hired prior to January 1, 2009 also have the option to irrevocably change their membership to GSEPS. \n- 27 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2019 \n \nEXHIBIT \"H\" \n \nUnder the old plan, the new plan, and GSEPS, a member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 60 or 30 years of creditable service regardless of age. Additionally, there are some provisions allowing for early retirement after 25 years of creditable service for members under age 60. \nRetirement benefits paid to members are based upon the monthly average of the member's highest 24 consecutive calendar months, multiplied by the number of years of creditable service, multiplied by the applicable benefit factor. Annually, postretirement cost-of-living adjustments may also be made to members' benefits, provided the members were hired prior to July 1, 2009. The normal retirement pension is payable monthly for life; however, options are available for distribution of the member's monthly pension, at reduced rates, to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS. \nContributions: Member contributions under the old plan are 4% of annual compensation, up to $4,200.00, plus 6% of annual compensation in excess of $4,200.00. Under the old plan, the state pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these state contributions are included in the members' accounts for refund purposes and are used in the computation of the members' earnable compensation for the purpose of computing retirement benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation. The School District's required contribution rate for the year ended June 30, 2019 was 24.78% of annual covered payroll for old and new plan members and 21.78% for GSEPS members. The rates include the annual actuarially determined employer contributions rate of 24.66% of annual covered payroll of new and old plan members and 21.66% of GSEPS members, plus a 0.12% adjustment for the HB 751 one-time benefit adjustment of 3% to retired state employees. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employer contributions to the pension plan were $7,485.00 for the current fiscal year. \nPUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM (PSERS) \nPlan Description: PSERS is a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly in 1969 for the purpose of providing retirement allowances for public school employees who are not eligible for membership in the Teachers Retirement System of Georgia. The ERS Board of Trustees, plus two additional trustees, administers PSERS. Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. PSERS issues a publicly available financial report that can be obtained at www.ers.ga.gov/formspubs/formspubs. \nBenefits Provided: A member may retire and elect to receive normal monthly retirement benefits after completion of ten years of creditable service and attainment of age 65. A member may choose to receive reduced benefits after age 60 and upon completion of ten years of service. \nUpon retirement, the member will receive a monthly benefit of $15.00, multiplied by the number of years of creditable service. Death and disability benefits are also available through PSERS. Additionally, PSERS may make periodic cost-of-living adjustments to the monthly benefits. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contribution, the member forfeits all rights to retirement benefits. \nContributions: The general assembly makes an annual appropriation to cover the employer contribution to PSERS on behalf of local school employees (bus drivers, cafeteria workers, and maintenance staff). The annual employer contribution required by statute is actuarially determined and paid directly to PSERS by the State Treasurer in accordance with O.C.G.A. 47-4-29(a) and 60(b). Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. \n \n- 28 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2019 \n \nEXHIBIT \"H\" \n \nIndividuals who became members prior to July 1, 2012 contribute $4 per month for nine months each fiscal year. Individuals who became members on or after July 1, 2012 contribute $10 per month for nine months each fiscal year. The State of Georgia, although not the employer of PSERS members, is required by statute to make employer contributions actuarially determined and approved and certified by the PSERS Board of Trustees. The current fiscal year contribution was $69,933.00. \nPension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions \n \nAt June 30, 2019, the School District reported a liability of $30,902,423.00 for its proportionate share of the net pension liability for TRS ($30,854,735.00) and ERS ($47,688.00). \n \nThe TRS net pension liability reflected a reduction for support provided to the School District by the State of Georgia for certain public school support personnel. The amount recognized by the School District as its proportionate share of the net pension liability, the related State of Georgia support, and the total portion of the net pension liability that was associated with the School District were as follows: \n \nSchool District's proportionate share of the net pension liability \n \n$ 30,854,735.00 \n \nState of Georgia's proportionate share of the net pension liability associated with the School District \n \n233,697.00 \n \nTotal \n \n$ 31,088,432.00 \n \nThe net pension liability for TRS and ERS was measured as of June 30, 2018. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2017. An expected total pension liability as of June 30, 2018 was determined using standard roll-forward techniques. The School District's proportion of the net pension liability was based on contributions to TRS and ERS during the fiscal year ended June 30, 2018. \nAt June 30, 2018, the School District's TRS proportion was 0.166224%, which was an increase of 0.000494% from its proportion measured as of June 30, 2017. At June 30, 2018, the School District's ERS proportion was 0.001160%, which was an increase of 0.000728% from its proportion measured as of June 30, 2017. \nAt June 30, 2019, the School District did not have a PSERS liability for a proportionate share of the net pension liability because of a Special Funding Situation with the State of Georgia, which is responsible for the net pension liability of the plan. The amount of the State's proportionate share of the net pension liability associated with the School District is $429,508.00. \nThe PSERS net pension liability was measured as of June 30, 2018. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2017. An expected total pension liability as of June 30, 2018 was determined using standard roll-forward techniques. The State's proportion of the net pension liability associated with the School District was based on actuarially determined contributions paid by the State during the fiscal year ended June 30, 2018. \nFor the year ended June 30, 2019, the School District recognized pension expense of $3,094,652.00 for TRS, $24,056.00 for ERS and $99,447.00 for PSERS and revenue of $889.00 for TRS and $99,447.00 for PSERS. The revenue is support provided by the State of Georgia. For TRS the State of Georgia support is provided only for certain support personnel. \n \n- 29 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2019 \n \nEXHIBIT \"H\" \n \nAt June 30, 2019, the School District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: \n \nTRS \n \nDeferred \n \nDeferred \n \nOutflows of \n \nInflows of \n \nResources \n \nResources \n \nERS \n \nDeferred \n \nDeferred \n \nOutflows of \n \nInflows of \n \nResources \n \nResources \n \nDifferences between expected and actual experience \n \n$ 2,042,627.00 $ \n \n63,592.00 $ 1,483.00 $ \n \n- \n \nChanges of assumptions \n \n465,587.00 \n \n- \n \n2,247.00 \n \n- \n \nNet difference between projected and actual earnings on pension plan investments \n \n- \n \n843,628.00 \n \n- \n \n1,099.00 \n \nChanges in proportion and differences between School \n \nDistrict contributions and proportionate share of \n \ncontributions \n \n211,409.00 \n \n282,288.00 \n \n22,206.00 \n \n- \n \nSchool District contributions subsequent to the measurement date \nTotal \n \n4,374,883.00 \n \n- \n \n7,485.00 \n \n$ 7,094,506.00 $ 1,189,508.00 $ 33,421.00 $ \n \n1,099.00 \n \nThe School District contributions subsequent to the measurement date for TRS and ERS are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ended June 30, 2020. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: \n \nYear Ended June 30: \n \nTRS \n \nERS \n \n2020 2021 2022 2023 2024 \n \n$ 1,589,737.00 $ 19,042.00 \n \n$ 755,451.00 $ 8,113.00 \n \n$ (846,639.00) $ (1,827.00) \n \n$ \n \n695.00 $ (491.00) \n \n$ 30,871.00 $ \n \n- \n \nActuarial assumptions: The total pension liability as of June 30, 2018 was determined by an actuarial valuation as of June 30, 2017, using the following actuarial assumptions, applied to all periods included in the measurement: \n \nTeachers Retirement System: \n \nInflation \n \n2.75% \n \nSalary increases \n \n3.25%  9.00%, average, including inflation \n \nInvestment rate of return \n \n7.50%, net of pension plan investment expense, including inflation \n \nPost-retirement mortality rates were based on the RP-2000 White Collar Mortality Table with future mortality improvement projected to 2025 with the Society of Actuaries' projection scale BB (set forward one year for males) for service requirements and dependent beneficiaries. The RP-2000 Disabled Mortality table with future mortality improvement projected to 2025 with Society of Actuaries' projection scale BB (set forward two years for males and four years for females) was used for the death after disability retirement. Rates of mortality in active service were based on the RP-2000 Employee Mortality Table projected to 2025 with projection scale BB. \n \n- 30 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2019 \n \nEXHIBIT \"H\" \n \nThe actuarial assumptions used in the June 30, 2017 valuation were based on the results of an actuarial experience study for the period July 1, 2009  June 30, 2014. \nEmployees' Retirement System: \n \nInflation \n \n2.75% \n \nSalary increases \n \n3.25% - 7.00%, including inflation \n \nInvestment rate of return \n \n7.30%, net of pension plan investment expense, including inflation \n \nPost-retirement mortality rates were based on the RP-2000 Combined Mortality Table with future \nmortality improvement projected to 2025 with the Society of Actuaries' projection scale BB and set \nforward 2 years for both males and females for service retirements and dependent beneficiaries. The RP-2000 Disabled Mortality Table with future mortality improvement projected to 2025 with Society \nof Actuaries' projection scale BB and set back 7 years for males and set forward 3 years for females \nwas used for death after disability retirement. There is a margin for future mortality improvement in \nthe tables used by the System. Based on the results of the most recent experience study adopted by the Board on December 17, 2015, the numbers of expected future deaths are 9-12% less than the \nactual number of deaths that occurred during the study period for service retirements and \nbeneficiaries and for disability retirements. Rates of mortality in active service were based on the RP-2000 Employee Mortality Table projected to 2025 with projection scale BB. \n \nThe actuarial assumptions used in the June 30, 2017 valuation were based on the results of an actuarial experience study for the period July 1, 2009  June 30, 2014. \nPublic School Employees Retirement System: \n \nInflation \n \n2.75% \n \nSalary increases \n \nN/A \n \nInvestment rate of return \n \n7.30%, net of pension plan investment expense, including inflation \n \nPost-retirement mortality rates were based on the RP-2000 Blue-Collar Mortality Table projected to 2025 with projection scale BB (set forward 3 years for males and 2 years for females) for the period after service retirements and for dependent beneficiaries. The RP-2000 Disabled Mortality projected to 2025 with projection scale BB (set forward 5 years for both males and females) was used for death after disability retirement. There is a margin for future mortality improvement in the tables used by the System. Based on the results of the most recent experience study adopted by the Board on December 17, 2015, the numbers of expected future deaths are 9-11% less than the actual number of deaths that occurred during the study period for healthy retirees and 9-11% less than expected under the selected table for disabled retirees. Rates of mortality in active service were based on the RP-2000 Employee Mortality Table projected to 2025 with projection scale BB. \nThe actuarial assumptions used in the June 30, 2017 valuation were based on the results of an actuarial experience study for the period July 1, 2009  June 30, 2014. \nThe long-term expected rate of return on TRS, ERS and PSERS pension plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected \n \n- 31 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2019 \n \nEXHIBIT \"H\" \n \nrate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target asset allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: \n \nAsset class \n \nTRS Target allocation \n \nERS/PSERS Target \nallocation \n \nLong-term expected real rate of return* \n \nFixed income Domestic large stocks Domestic mid stocks Domestic small stocks International developed market stocks International emerging market stocks Alternative \n \n30.00% 39.80% \n3.70% 1.50% 19.40% 5.60% \n- \n \n30.00% 37.20% \n3.40% 1.40% 17.80% 5.20% 5.00% \n \n(0.50)% 9.00% 12.00% 13.50% 8.00% 12.00% 10.50% \n \nTotal \n \n100.00% \n \n100.00% \n \n* Rates shown are net of the 2.75% assumed rate of inflation \nDiscount Rate: The discount rate used to measure the total TRS pension liability was 7.50%. The discount rate used to measure the total ERS and PSERS pension liability was 7.30%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and nonemployer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the TRS, ERS and PSERS pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. \nSensitivity of the School District's proportionate share of the net pension liability to changes in the discount rate: The following presents the School District's proportionate share of the net pension liability calculated using the discount rate of 7.50% and 7.30%, as well as what the School District's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.50% and 6.30%) or 1-percentage-point higher (8.50% and 8.30%) than the current rate: \n \nTeachers Retirement System: \nSchool District's proportionate share of the net pension liability \n \n1% Decrease (6.50%) \n \nCurrent Discount Rate (7.50%) \n \n1% Increase (8.50%) \n \n$ 51,505,387.00 $ \n \n30,854,735.00 $ 13,837,546.00 \n \nEmployees' Retirement System: \n \n1% Decrease (6.30%) \n \nCurrent Discount Rate (7.30%) \n \n1% Increase (8.30%) \n \nSchool District's proportionate share \n \nof the net pension liability \n \n$ \n \n67,829.00 $ \n \n47,688.00 $ \n \n30,527.00 \n \nPension plan fiduciary net position: Detailed information about the pension plan's fiduciary net \n \nposition is available in the separately issued TRS, ERS and PSERS financial report which is publicly \n \navailable at www.trsga.com/publications and http://www.ers.ga.gov/formspubs/formspubs.html. \n \n- 32 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2019 \n \nEXHIBIT \"H\" \n \nDEFINED CONTRIBUTION PLAN \n \nThe Franklin County Board of Education participates in an employer paid 403(b) annuity plan for the group of employees covered under the Public School Employees Retirement System (PSERS). Recognizing that PSERS was a limited defined contribution and defined benefit plan which did not provide for an adequate retirement for this group of employees, it was the Board's desire to supplement the retirement of this group. \n \nThe School District selected Lincoln as the provider of this plan. For each employee covered under PSERS, the Board contributes to the plan an amount equal to the amount contributed by the employee not to exceed $25.00 per employee per month. \n \nThe employee becomes vested in the plan with 5 years of experience. Employees who had already achieved 5 years of experience at the time the plan was implemented were vested upon enrollment. \n \nFunds accumulated in the employer paid accounts are only available to the employee upon termination of employment and 5 years of service to Franklin County Board of Education. If an employee terminates employment prior to 5 years of service, funds paid on behalf of the non-vested employee are credited back to the School District. \n \nEmployer contributions for the current fiscal year and the preceding two fiscal years are as follows: \n \nFiscal Year \n \nPercentage Contributed \n \nRequired Contribution \n \n2019 2018 2017 \n \n100% 100% 100% \n \n$ \n \n9,225.00 \n \n$ \n \n12,100.00 \n \n$ \n \n13,025.00 \n \nNOTE 14: TAX ABATEMENTS \n \nThe School District property tax revenues were reduced by $9,287.37 under an agreement entered into by the Franklin County Industrial Business Authority with Ross Controls, Inc. starting on May 1, 2017 for a ten-year period. The purpose of this property tax abatement agreement is to provide an incentive for Ross Controls, Inc. to expand their plant instead of relocating to another jurisdiction. \nNOTE 15: SUBSEQUENT EVENTS \n \nIn the subsequent fiscal year, the School District issued $4,500,000.00 of general obligation bonds that were authorized in prior years. \n \nIn December 2019, a strain of coronavirus (COVID-19) began to spread worldwide, resulting in a severe impact to the United States economy in March 2020. The spread of COVID-19 has had a negative impact on virtually all businesses and individuals which comprise the tax base of all levels of government. The extent of this impact is uncertain but is expected to have negative results on financial operations, however the impact cannot be reasonably estimated at this time. \n \n- 33 - \n \n (This page left intentionally blank) \n \n FRANKLIN COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY TEACHERS RETIREMENT SYSTEM OF GEORGIA \nFOR THE YEAR ENDED JUNE 30 \n \nSCHEDULE \"1\" \n \nYear Ended \n2019 2018 2017 2016 2015 \n \nSchool District's proportion of the net \npension liability \n \nSchool District's proportionate share of the net pension liability \n \nState of Georgia's proportionate share of the \nnet pension liability associated with the \nSchool District \n \n0.166224% $ 0.165730% $ 0.166626% $ 0.168496% $ 0.164905% $ \n \n30,854,735.00 $ 30,801,431.00 $ 34,376,802.00 $ 25,651,843.00 $ 20,833,572.00 $ \n \n233,697.00 $ 353,493.00 $ 527,744.00 $ 413,180.00 $ 331,129.00 $ \n \nTotal \n \nSchool District's covered payroll \n \nSchool District's proportionate share of the net pension liability as a percentage of its covered \npayroll \n \nPlan fiduciary net position as a \npercentage of the total pension liability \n \n31,088,432.00 $ 31,154,924.00 $ 34,904,546.00 $ 26,065,023.00 $ 21,164,701.00 $ \n \n19,978,659.21 19,253,341.53 18,595,862.11 18,071,345.00 17,091,045.00 \n \n154.44% 159.98% 184.86% 141.95% 121.90% \n \n80.27% 79.33% 76.06% 81.44% 84.03% \n \nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \n \n- 35 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \nFOR THE YEAR ENDED JUNE 30 \n \nSCHEDULE \"2\" \n \nYear Ended \n \nSchool District's proportion of the net \npension liability \n \nSchool District's proportionate share of the net pension liability \n \nSchool District's covered payroll \n \nSchool District's proportionate share of the net pension liability as a \npercentage of covered payroll \n \n2019 2018 \n \n0.001160% $ 0.000432% $ \n \n47,688.00 $ 17,545.00 $ \n \n29,595.96 8,831.12 \n \n161.13% 198.67% \n \nPlan fiduciary net position as a \npercentage of total pension liability \n76.68% 76.33% \n \nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \n \n- 36 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA \nFOR THE YEAR ENDED JUNE 30 \n \nSCHEDULE \"3\" \n \nYear Ended \n2019 2018 2017 2016 \n \nSchool District's proportion of the net \npension liability \n \nSchool District's proportionate share of the net pension liability \n \nState of Georgia's proportionate share of the net pension liability \nassociated with the School District \n \nTotal \n \nSchool District's covered payroll \n \n0.00% $ 0.00% $ 0.00% $ 0.00% $ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n429,508.00 $ 429,508.00 $ 1,500,460.85 375,754.00 $ 375,754.00 $ 1,234,177.94 486,621.00 $ 486,621.00 $ 1,177,357.03 291,284.00 $ 291,284.00 $ 1,146,939.61 \n \nSchool District's proportionate share of the net pension liability as a percentage of its \ncovered payroll \n \nPlan fiduciary net position as a \npercentage of the total pension liability \n \nN/A \n \n85.26% \n \nN/A \n \n85.69% \n \nN/A \n \n81.00% \n \nN/A \n \n87.00% \n \nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \n \n- 37 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET OPEB LIABILITY \nSCHOOL OPEB FUND FOR THE YEAR ENDED JUNE 30 \n \nSCHEDULE \"4\" \n \nYear Ended \n2019 2018 \n \nSchool District's proportion of the net OPEB liability \n \nSchool District's proportionate share of the net OPEB liability \n \nState of Georgia's proportionate share of the net OPEB liability \nassociated with the School District \n \n0.243340% $ 30,927,768.00 $ \n \n- \n \n0.241819% $ 33,975,472.00 $ \n \n- \n \nTotal \n \nSchool District's covered-employee \npayroll \n \nSchool District's proportionate share of the \nnet OPEB liability as a percentage of its covered- \nemployee payroll \n \nPlan fiduciary net position as a \npercentage of the total OPEB liability \n \n$ 30,927,768.00 $ 33,975,472.00 \n \n$ 19,910,823.89 $ 18,518,343.50 \n \n155.33% 183.47% \n \n2.93% 1.61% \n \nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \n \n- 38 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION \nSCHEDULE OF CONTRIBUTIONS TEACHERS RETIREMENT SYSTEM OF GEORGIA \nFOR THE YEAR ENDED JUNE 30 \n \nSCHEDULE \"5\" \n \nYear Ended \n2019 2018 2017 2016 2015 \n \nContractually required contribution \n \nContributions in relation to the contractually required contribution \n \nContribution deficiency (excess) \n \n$ \n \n4,374,883.00 $ \n \n4,374,883.00 $ \n \n- \n \n$ \n \n3,332,626.00 $ \n \n3,332,626.00 $ \n \n- \n \n$ \n \n2,715,973.35 $ \n \n2,715,973.35 $ \n \n- \n \n$ \n \n2,613,592.63 $ \n \n2,613,592.63 $ \n \n- \n \n$ \n \n2,338,991.09 $ \n \n2,338,991.09 $ \n \n- \n \nSchool District's covered Contribution as a percentage \n \npayroll \n \nof covered payroll \n \n$ \n \n21,076,167.37 \n \n$ \n \n19,978,659.21 \n \n$ \n \n19,253,341.53 \n \n$ \n \n18,595,862.11 \n \n$ \n \n18,071,345.00 \n \n20.76% 16.68% 14.11% 14.05% 12.94% \n \nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \n \n- 39 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION \nSCHEDULE OF CONTRIBUTIONS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \nFOR THE YEAR ENDED JUNE 30 \n \nSCHEDULE \"6\" \n \nYear Ended \n2019 2018 2017 \n \nContractually required contribution \n \nContributions in relation to the contractually required \ncontribution \n \nContribution deficiency (excess) \n \n$ \n \n7,485.00 $ \n \n7,485.00 $ \n \n- \n \n$ \n \n7,342.80 $ \n \n7,342.80 $ \n \n- \n \n$ \n \n2,191.00 $ \n \n2,191.00 $ \n \n- \n \nSchool District's covered payroll \n \n$ \n \n30,096.50 \n \n$ \n \n29,595.96 \n \n$ \n \n8,831.12 \n \nContribution as a percentage of covered \npayroll \n24.78% 24.81% 24.81% \n \nThis schedule is intended to show information for 10 years. Addtional years will be displayed as they become available. \n \n- 40 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION \nSCHEDULE OF CONTRIBUTIONS SCHOOL OPEB FUND \nFOR THE YEAR ENDED JUNE 30 \n \nSCHEDULE \"7\" \n \nYear Ended \n2019 2018 2017 \n \nContractually required contribution \n \nContributions in relation to the contractually required \ncontribution \n \nContribution deficiency (excess) \n \n$ \n \n1,347,712.00 $ \n \n1,347,712.00 $ \n \n- \n \n$ \n \n1,261,210.00 $ \n \n1,261,210.00 $ \n \n- \n \n$ \n \n1,260,865.00 $ \n \n1,260,865.00 $ \n \n- \n \nSchool District's covered-employee \npayroll \n$ 19,462,876.25 $ 19,910,823.89 $ 18,518,343.50 \n \nContribution as a percentage of covered- \nemployee payroll \n6.92% 6.33% 6.81% \n \nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \n \n- 41 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION \nFOR THE YEAR ENDED JUNE 30, 2019 \n \nSCHEDULE \"8\" \n \nTeachers Retirement System \nChanges of assumptions: On November 18, 2015, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System. Primary among the changes were the updates to rates of mortality, retirement, disability, withdrawal and salary increases. The expectation of retired life mortality was changed to RP2000 White Collar Mortality Table with future mortality improvement projected to 2025 with the Society of Actuaries' projection scale BB (set forward one year for males). \nIn 2010 and later, the expectation of retired life mortality was changed to the RP2000 Mortality Tables rather than the 1994 Group Annuity Mortality Table, which was used prior to 2010. In 2010, rates of withdrawal, retirement, disability and mortality were adjusted to more closely reflect actual experience. In 2010, assumed rates of salary increase were adjusted to more closely reflect actual and anticipated experience. \nEmployees' Retirement System \nChanges of benefit terms: A new benefit tier was added for members joining the System on and after July 1, 2009. A one-time 3% payment was granted to certain retirees and beneficiaries effective July 2016. A one-time 3% payment was granted to certain retirees and beneficiaries effective July 2017. \nChanges of assumptions: On March 15, 2018, the Board adopted a new funding policy. Because of this new funding policy, the assumed investment rate of return was reduced from 7.50% to 7.40% for the June 30, 2017 actuarial valuation. In addition, based on the Board's new funding policy, the assumed investment rate of return was further reduced by 0.10% from 7.40% to 7.30% as of the June 30, 2018 measurement date. \nOn December 17, 2015, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System. Primary among the changes were the updates to rates of mortality, retirement, disability, withdrawal and salary increases. \nPublic School Employees Retirement System \nChanges of assumptions: On March 15, 2018, the Board adopted a new funding policy. Because of this new funding policy, the assumed investment rate of return was reduced from 7.50% to 7.40% for June 30, 2017 actuarial valuation. In addition, based on the Board's new funding policy, the assumed investment rate of return was further reduced by 0.10% from 7.40% to 7.30% as of the June 30, 2018 measurement date. \nOn December 17, 2015, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System. Primary among the changes were the updates to rates of mortality, retirement and withdrawal. The expectation of retired life mortality was changed to the RP2000 Blue Collar Mortality Table projected to 2025 with projection scale BB (set forward 3 years for males and 2 years for females). \nIn 2010 and later, the expectation of retired life mortality was changed to the RP2000 Mortality Tables rather than the 1994 Group Annuity Mortality Table, which was used prior to 2010. In 2010, rates of withdrawal, retirement, disability and mortality were adjusted to more closely reflect actual experience. \nSchool OPEB Fund \nChanges of benefit terms: There have been no changes in benefit terms. \nChanges in assumptions: June 30, 2017 valuation: the June 30, 2017 actuarial valuation was revised, for various factors, including the methodology used to determine how employees and retirees were assigned to each of the OPEB Funds and anticipated participation percentages. Current and former employees of State organizations (including technical colleges, community service boards and public health departments) are now assigned to the State OPEB fund based on their last employer payroll location: irrespective of retirement affiliation. \nThe discount rate was updated from 3.58% as of June 30, 2017 to 3.87% as of June 30, 2018. \n \n- 42 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION GENERAL FUND \nSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL \nYEAR ENDED JUNE 30, 2019 \n \nSCHEDULE \"9\" \n \nREVENUES \nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous \nTotal Revenues \nEXPENDITURES \nCurrent 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 Other Support Services Enterprise Operations Food Services Operation \nTotal Expenditures \nExcess of Revenues over (under) Expenditures \nOTHER FINANCING SOURCES \nOther Sources \nNet Change in Fund Balances \nFund Balances - Beginning \nAdjustments \n \nNONAPPROPRIATED BUDGETS \n \nORIGINAL (1) \n \nFINAL (1) \n \nACTUAL AMOUNTS \n \nVARIANCE OVER/UNDER \n \n$ 10,269,400.00 $ 10,269,400.00 $ 10,286,255.72 $ \n \n- \n \n- \n \n213,851.57 \n \n25,366,969.00 \n \n25,494,548.43 \n \n25,334,050.71 \n \n4,192,087.40 \n \n4,420,380.40 \n \n3,495,236.07 \n \n525,250.00 \n \n525,250.00 \n \n528,705.60 \n \n17,000.00 \n \n17,000.00 \n \n11,051.93 \n \n40,000.00 \n \n40,000.00 \n \n1,277,128.51 \n \n40,410,706.40 \n \n40,766,578.83 \n \n41,146,280.11 \n \n16,855.72 213,851.57 (160,497.72) (925,144.33) \n3,455.60 (5,948.07) 1,237,128.51 \n379,701.28 \n \n26,809,479.55 \n1,854,650.03 2,337,787.31 \n658,784.95 761,575.21 2,348,590.54 353,708.16 2,443,301.75 2,773,314.50 326,000.00 \n1,736,185.79 \n42,403,377.79 \n(1,992,671.39) \n \n27,564,570.57 \n1,879,032.53 2,569,282.25 \n669,474.95 651,930.99 2,313,094.48 342,827.87 2,356,051.75 2,948,534.50 286,000.00 \n1,736,185.79 \n43,316,985.68 \n(2,550,406.85) \n \n26,675,620.58 \n1,688,674.30 2,285,552.53 \n664,545.73 672,459.48 2,334,446.03 293,764.38 2,423,992.73 3,137,449.25 263,773.42 687,190.76 1,829,908.89 \n42,957,378.08 \n(1,811,097.97) \n \n888,949.99 \n190,358.23 283,729.72 \n4,929.22 (20,528.49) (21,351.55) 49,063.49 (67,940.98) (188,914.75) 22,226.58 (687,190.76) (93,723.10) \n359,607.60 \n739,308.88 \n \n103,000.00 (1,889,671.39) \n788,422.89 3,305.80 \n \n103,000.00 (2,447,406.85) 7,496,338.60 \n(6,229.06) \n \n(1,811,097.97) 7,496,338.60 \n- \n \n(103,000.00) 636,308.88 \n6,229.06 \n \nFund Balances - Ending \n \n$ (1,097,942.70) $ \n \n5,042,702.69 $ \n \n5,685,240.63 $ \n \n642,537.94 \n \nNotes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual \n(1) Original and Final Budget amounts do not include the budgeted revenues or expenditures of the various principal accounts. The actual revenues and expenditures of the various principal accounts are $1,038,956.97 and $1,141,946.26, respectively. \nThe accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements. \n \nSee notes to the basic financial statements. \n \n- 43 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \nYEAR ENDED JUNE 30, 2019 \n \nSCHEDULE \"10\" \n \nFUNDING AGENCY PROGRAM/GRANT \nAgriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program \nTotal Child Nutrition Cluster \nOther Programs Pass-Through From Georgia Department of Education Food Services Child Nutrition Discretionary Grants Limited Availability \nTotal U. S. Department of Agriculture \nEducation, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Special Education Grants to States Grants to States Preschool Grants \nTotal Special Education Cluster \nOther Programs Pass-Through From Georgia Department of Education Career and Technical Education - Basic Grants to States English Language Acquisition State Grants English Language Acquisition State Grants Migrant Education - State Grant Program Migrant Education - State Grant Program Rural Education Rural Education Student Support and Academic Enrichment Program Student Support and Academic Enrichment Program Supporting Effective Instruction State Grants Supporting Effective Instruction State Grants Title I Grants to Local Educational Agencies Title I Grants to Local Educational Agencies \nTotal Other Programs \nTotal U. S. Department of Education \n \nCFDA NUMBER \n \nPASSTHROUGH \nENTITY ID \nNUMBER \n \nEXPENDITURES IN PERIOD \n \n10.553 10.555 \n \n195GA324N1099 $ 195GA324N1099 \n \n323,830.84 1,415,600.61 \n1,739,431.45 \n \n10.579 \n \n185GA350N8103 \n \n12,000.00 1,751,431.45 \n \n84.027 84.027 84.173 \n \nH027A170073 H027A180073 H173A180081 \n \n84.048 84.365 84.365 84.011 84.011 84.358 84.358 84.424A 84.424A 84.367 84.367 84.010 84.010 \n \nV048A180010 S365A170010 S365A180010 S011A170011 S011A180011 S365B170010 S365B180010 S424A170011 S424A180011 S367A170001 S367A180001 S010A170010 S010A180010 \n \n268,552.00 578,286.14 \n23,701.11 \n870,539.25 \n42,101.89 7,152.00 6,538.84 7,858.05 \n30,784.06 67,975.83 27,757.54 \n4,034.00 20,003.00 19,041.00 101,047.33 61,227.00 963,249.57 \n1,358,770.11 \n2,229,309.36 \n \nTotal Expenditures of Federal Awards \n \n$ 3,980,740.81 \n \nNotes to the Schedule of Expenditures of Federal Awards \n \nNote 1. Basis of Presentation \n \nThe accompanying schedule of expenditures of federal awards (the \"Schedule\") includes the federal award activity of the Franklin County Board of Education (the \"Board\") under programs of the federal government for the year ended June 30, 2019. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Board, it is not intended to and does not present the financial position or changes in net position of the Board. \n \nNote 2. Summary of Significant Accounting Policies \n \nExpenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. \n \nNote 3. Indirect Cost Rate \n \nThe Board has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. \n \nSee notes to the basic financial statements. \n \n- 44 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2019 \nAGENCY/FUNDING \nGRANTS 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 Elementary Grades (4-5) Program Upper Elementary Grades - Early Intervention (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program 20 Days Additional Instruction Staff and Professional Development Principal Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Mid-term Adjustment Hold-Harmless State Health Benefit Plan Employer Holiday Categorical Grants Pupil Transportation Regular Nursing Services Education Equalization Funding Grant Other State Programs Bus Purchases - State Allotment Food Services Math and Science Supplements Preschool Disability Services School Safety Grant Teachers Retirement Vocational Education Vocational Supervisors \nOffice of the State Treasurer Public School Employees Retirement \nCONTRACT Human Resources, Georgia Department of Family Connection \n \nSCHEDULE \"11\" \n \nGOVERNMENTAL FUND TYPE GENERAL FUND \n \n$ \n \n696,693.00 \n \n873,455.00 \n \n1,911,888.00 \n \n1,862,302.00 \n \n647,010.00 \n \n1,836,386.00 \n \n2,656,268.00 \n \n1,997,737.00 \n \n674,123.00 \n \n3,223,972.00 \n \n535,756.00 \n \n757,358.00 \n \n179,788.00 \n \n181,707.00 \n \n447,781.00 \n \n138,742.00 \n \n77,221.00 \n \n1,625.00 \n \n577,558.00 967,187.00 949,526.00 \n72,183.00 (237,195.00) \n \n644,295.00 77,224.00 \n2,877,913.00 \n154,440.00 46,615.44 14,911.43 \n134,062.00 38,065.12 29,582.01 \n154,227.72 14,299.00 \n \n69,933.00 \n \n49,411.99 \n \n$ 25,334,050.71 \n \nSee notes to the basic financial statements. \n \n- 45 - \n \n (This page left intentionally blank) \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \nYEAR ENDED JUNE 30, 2019 \n \nSCHEDULE \"12\" \n \nPROJECT (SPLOST IV) \ni) Acquiring, constructing and equipping replacement school building at Franklin County High School; \nii) adding to, renovating, repairing, improving, acquiring and equipping school buildings and school system facilities; \niii) acquiring miscellaneous new equipment, fixtures and furnishings for the school system, including computer technology equipment, computer software, school buses and other vehicles, transportation and maintenance equipment, and security and safety equipment; \niv) acquiring land or improving land for new or existing schools; \nv) acquiring textbooks, e-books, and e-book readers for the school system; \nvi) paying a protion of the payments, including principal and interest, due on the School District's Series 2006 and 2007 Bonds with a maximum payment amount of $1,700,000.00, with the maximum cost of the projects described in items (i)-(vi) payable from said tax being $20,000,000.00. \nPROJECT (SPLOST V) \ni) Constructing, renovating, and equipping a Career Technical and Agricultural Education (\"CTAE\") career academy on the Franklin County High School campus and constructing and equipping additions to Carnesville Elementary School Itermediate campus; \nii) adding to, renovating, repairing, improving, acquiring and equipping school buildings and school system facilities; \niii) acquiring miscellaneous new equipment, fixtures and furnishings for the school system, including computer technology equipment, computer software, school buses and other vehicles, transportation and maintenance equipment, and security and safety equipment; \niv) acquiring land or improving land for new or existing schools; \nv) acquiring texbooks, e-books, and e-book readers for the school system; \nvi) paying any general obligation debt oof the School District issued in conjunction with the imposition of such sales and use tax. \n \nORIGINAL ESTIMATED \nCOST (1) \n \nCURRENT ESTIMATED COSTS (2) \n \nAMOUNT EXPENDED IN CURRENT YEAR (3)(5) \n \nAMOUNT EXPENDED IN PRIOR YEARS (3)(4)(5) \n \nTOTAL COMPLETION \nCOST \n \nEXCESS PROCEEDS NOT \nEXPENDED \n \nESTIMATED COMPLETION \nDATE \n \n$ 16,300,000.00 $ 15,245,081.84 $ \n \n- $ 15,245,081.84 $ 15,245,081.84 $ \n \n- \n \nCompleted \n \n500,000.00 \n \n3,000,000.00 \n \n758,457.44 \n \n2,187,544.69 \n \n- \n \n- \n \nJune 30, 2020 \n \n1,300,000.00 \n \n3,500,000.00 \n \n451,124.48 \n \n2,988,466.15 \n \n- \n \n100,000.00 \n \n- \n \n- \n \n- \n \n- \n \n400,000.00 \n \n- \n \n- \n \n- \n \n- \n \n- \n \nJune 30, 2020 \n \n- \n \nCompleted \n \n- \n \nCompleted \n \n1,700,000.00 20,300,000.00 \n \n227,097.58 21,972,179.42 \n \n1,209,581.92 \n \n227,097.58 20,648,190.26 \n \n227,097.58 15,472,179.42 \n \n- \n \nCompleted \n \n- \n \n11,000,000.00 \n \n11,000,000.00 \n \n7,312,919.56 \n \n542,272.07 \n \n- \n \n3,000,000.00 \n \n3,000,000.00 \n \n4,782.00 \n \n- \n \n- \n \n- \n \nJune 30, 2023 \n \n- \n \nJune 30, 2023 \n \n3,500,000.00 \n \n3,500,000.00 \n \n43,300.00 \n \n- \n \n- \n \n100,000.00 \n \n100,000.00 \n \n- \n \n- \n \n- \n \n300,000.00 \n \n300,000.00 \n \n- \n \n- \n \n- \n \n100,000.00 \n \n100,000.00 \n \n- \n \n- \n \n- \n \n18,000,000.00 \n \n18,000,000.00 \n \n7,361,001.56 \n \n542,272.07 \n \n- \n \n- \n \nJune 30, 2023 \n \n- \n \nJune 30, 2023 \n \n- \n \nJune 30, 2023 \n \n- \n \nJune 30, 2023 \n \n- \n \n$ 38,300,000.00 $ 39,972,179.42 $ 8,570,583.48 $ 21,190,462.33 $ 15,472,179.42 $ \n \n- \n \n(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax. \n \n(2) The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion. \n \n(3) The voters of Franklin County approved the imposition of a 1% sales tax to fund the above projects and retire associated debt. Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the projects. \n \n(4) In addition to the expenditures shown above, the School District has incurred interest to provide advance funding for the above projects as follows: \n \nPrior Years \n \n$ 1,923,786.81 \n \nCurrent Year \n \n- \n \nTotal \n \n$ 1,923,786.81 \n \n(5) In addition to the expenditures shown above, the School District has incurred interest to provide advance funding for the above projects as follows: \n \nPrior Years \n \n$ \n \n247,866.15 \n \nCurrent Year \n \n189,835.81 \n \nTotal \n \n$ \n \n437,701.96 \n \nSee notes to the basic financial statements. \n \n- 47 - \n \n SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS \n \n Greg S. Griffin \nSTATE AUDITOR \n(404) 656-2174 \n \nDEPARTMENT OF AUDITS AND ACCOUNTS \n270 Washington Street, S.W., Suite 4-101 Atlanta, Georgia 30334-8400 \n \nINDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON \nCOMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS \n \nThe Honorable Brian P. Kemp, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the State Board of Education \nand Superintendent and Members of the Franklin County Board of Education \nWe have audited, in accordance with the 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, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Franklin County Board of Education (School District), as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the School District's basic financial statements, and have issued our report thereon dated March 2, 2021. \nInternal Control Over Financial Reporting \nIn planning and performing our audit of the financial statements, we considered the School District's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the School District's internal control. Accordingly, we do not express an opinion on the effectiveness of the School District's internal control. \nA 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. A significant deficiency is a deficiency, or a 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. \nOur consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. \n \n Compliance and Other Matters \nAs part of obtaining reasonable assurance about whether the School District's financial statements are free from 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. \nPurpose of this Report \nThe purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the School District's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the School District's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. \nRespectfully submitted, \n \nMarch 2, 2021 \n \nGreg S. Griffin State Auditor \n \n Greg S. Griffin \nSTATE AUDITOR \n(404) 656-2174 \n \nDEPARTMENT OF AUDITS AND ACCOUNTS \n270 Washington Street, S.W., Suite 4-101 Atlanta, Georgia 30334-8400 \n \nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE \n \nThe Honorable Brian P. Kemp, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the State Board of Education \nand Superintendent and Members of the Franklin County Board of Education \nReport on Compliance for Each Major Federal Program \nWe have audited the Franklin County Board of Education (School District) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2019. The School District's major federal programs are identified in the Summary of Auditor's Results section of the accompanying Schedule of Findings and Questioned Costs. \nManagement's Responsibility \nManagement is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. \nAuditor's Responsibility \nOur responsibility is to express an opinion on compliance for each of the School District's major federal programs based on our audit of the types of compliance requirements referred to above. 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 the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance 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 School District's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. \nWe believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the School District's compliance. \n \n Opinion on Each Major Federal Program \nIn our opinion, the School District complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2019. \nReport on Internal Control over Compliance \nManagement of the School District is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the School District's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, 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 School District's internal control over compliance. \nA 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 compliance 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. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. \nOur 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 material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. \nThe purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. \nRespectfully submitted, \n \nMarch 2, 2021 \n \nGreg S. Griffin State Auditor \n \n SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS \n \n FRANKLIN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2019 \n \nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \n \nFS 2017-001 Control Category: Internal Control Impact: Compliance Impact: \n \nFinancial Reporting Process Financial Reporting Material Weakness None \n \nFinding Status: \n \nPreviously Reported Corrective Action Implemented \n \nFS 2017-002 Control Category: \nInternal Control Impact: Compliance Impact: \n \nInternal Controls at the Central Office Cash and Cash Equivalents Revenues/Receivables/Receipts Expenditures/Liabilities/Disbursements Capital Assets Material Weakness None \n \nFinding Status: \n \nPreviously Reported Corrective Action Implemented \n \nPRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \n \nFA 2015-001 Compliance Category: Internal Control Impact: Compliance Impact: Federal Award Agency: Pass-Through Entity: CFDA Number and Title: \n \nInadequate Controls over Equipment Equipment and Real Property Management Significant Deficiency Nonmaterial Noncompliance U.S. Department of Agriculture Georgia Department of Education 10.553 and 10.555 Child Nutrition Cluster \n \nFinding Status: \n \nPartially Resolved \n \nThe School Food Director has expanded the description of inventory items to include all required details. Inventory item tags were purchased and applied to all food service inventory. \n \nFA 2016-001 Compliance Category: Internal Control Impact: Compliance Impact: Federal Award Agency: Pass-Through Entity: CFDA Number and Title: \n \nControls over Equipment Equipment and Real Property Management Significant Deficiency Nonmaterial Noncompliance U.S. Department of Agriculture Georgia Department of Education 10.553 and 10.555 Child Nutrition Cluster \n \nFinding Status: \n \nPartially Resolved \n \nThe School Food Director has created a new spreadsheet with the necessary components to describe all equipment. In addition, new inventory item tags were purchased and applied to all equipment. \n \n- 1 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2019 \n \nPRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \n \nFA 2018-001 Compliance Requirement: Internal Control Impact: Compliance Impact: Federal Award Agency: Pass-Through Entity: CFDA Number and Title: Federal Award Numbers: Questioned Costs: \n \nImprove Controls over Employee Compensation Allowable Costs/Cost Principles Significant Deficiency Nonmaterial Noncompliance U.S. Department of Agriculture Georgia Department of Education 10.553 and 10.555 Child Nutrition Cluster 18185GA324N1099, 18185GA324N1100 $448.40 \n \nFinding Status: \n \nPreviously Reported Corrective Action Implemented \n \n- 2 - \n \n SECTION IV FINDINGS AND QUESTIONED COSTS \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2019 \n \nI SUMMARY OF AUDITOR'S RESULTS \n \nFinancial Statements \nType of auditor's report issued: Governmental Activities; All Major Funds; Aggregate Remaining Fund Information \n \nUnmodified \n \nInternal control over financial reporting:  Material weakness identified?  Significant deficiency identified? \n \nNo None Reported \n \nNoncompliance material to financial statements noted: \n \nNo \n \nFederal Awards \n \nInternal Control over major programs:  Material weakness identified?  Significant deficiency identified? \n \nNo None Reported \n \nType of auditor's report issued on compliance for major programs: All major programs \n \nUnmodified \n \nAny audit findings disclosed that are required to be reported in \n \naccordance with 2 CFR 200.516(a)? \n \nNo \n \nIdentification of major programs: CFDA Numbers \n \nName of Federal Program or Cluster \n \n10.553, 10.555 \n \nChild Nutrition Cluster \n \nDollar threshold used to distinguish between Type A and Type B programs: \n \n$750,000.00 \n \nAuditee qualified as low-risk auditee? \n \nNo \n \nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. \n \nIII FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. \n \n "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-be26-bf8-b2018-belec-p-btext","title":"Franklin County Board of Education, Carnesville, Georgia, annual financial report for the fiscal year ended 2018 June 30 (including independent auditor's reports)","collection_id":"dlg_ggpd","collection_title":"Georgia Government Publications","dcterms_contributor":["Georgia. Department of Audits and Accounts, issuing body."],"dcterms_spatial":["United States, Georgia, 32.75042, -83.50018"],"dcterms_creator":["Georgia. Department of Audits and Accounts"],"dc_date":["2019-08-01"],"dcterms_description":["Financial report of the Franklin County Board of Education."],"dc_format":["application/pdf"],"dcterms_identifier":null,"dcterms_language":["eng"],"dcterms_publisher":["Atlanta, Ga. : Georgia. Department of Audits and Accounts"],"dc_relation":null,"dc_right":["http://rightsstatements.org/vocab/InC/1.0/"],"dcterms_is_part_of":null,"dcterms_subject":["Franklin County Board of Education (Ga.)--Appropriations and expenditures--Periodicals","Education--Georgia--Franklin County--Auditing--Periodicals","Education--Georgia--Franklin County--Finance--Statistics--Periodicals"],"dcterms_title":["Franklin County Board of Education, Carnesville, Georgia, annual financial report for the fiscal year ended 2018 June 30 (including independent auditor's reports)"],"dcterms_type":["Text"],"dcterms_provenance":["University of Georgia. Map and Government Information Library"],"edm_is_shown_by":["https://dlg.galileo.usg.edu/do:dlg_ggpd_y-ga-ba800-b-pr1-be26-bf8-b2018-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-be26-bf8-b2018-belec-p-btext"],"dcterms_temporal":null,"dcterms_rights_holder":null,"dcterms_bibliographic_citation":null,"dlg_local_right":null,"dcterms_medium":["annual reports","state government records","audits","financial records","financial statements"],"dcterms_extent":null,"dlg_subject_personal":null,"iiif_manifest_url_ss":null,"dcterms_subject_fast":null,"fulltext":"FRANKLIN COUNTY BOARD OF EDUCATION \nCARNESVILLE, GEORGIA \nANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2018 \n(Including Independent Auditor's Reports) \n \n FRANKLIN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \n \nPage \n \nSECTION I \n \nFINANCIAL \n \nINDEPENDENT AUDITOR'S REPORT \n \nREQUIRED SUPPLEMENTARY INFORMATION \n \nMANAGEMENT'S DISCUSSION AND ANALYSIS \n \ni \n \nEXHIBITS \n \nBASIC FINANCIAL STATEMENTS \n \nGOVERNMENT-WIDE FINANCIAL STATEMENTS \n \nA \n \nSTATEMENT OF NET POSITION \n \n1 \n \nB \n \nSTATEMENT OF ACTIVITIES \n \n2 \n \nFUND FINANCIAL STATEMENTS \n \nC \n \nBALANCE SHEET \n \nGOVERNMENTAL FUNDS \n \n4 \n \nD \n \nRECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \n \nTO THE STATEMENT OF NET POSITION \n \n5 \n \nE \n \nSTATEMENT OF REVENUES, EXPENDITURES AND CHANGES \n \nIN FUND BALANCES \n \nGOVERNMENTAL FUNDS \n \n6 \n \nF \n \nRECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT \n \nOF REVENUES, EXPENDITURES AND CHANGES IN FUND \n \nBALANCES TO THE STATEMENT OF ACTIVITIES \n \n7 \n \nG \n \nSTATEMENT OF FIDUCIARY NET POSITION \n \nFIDUCIARY FUNDS \n \n8 \n \nH NOTES TO THE BASIC FINANCIAL STATEMENTS \n \n10 \n \nSCHEDULES \n \nREQUIRED SUPPLEMENTARY INFORMATION \n \n1 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY \n \nTEACHERS RETIREMENT SYSTEM OF GEORGIA \n \n37 \n \n2 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY \n \nEMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \n \n38 \n \n3 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY \n \nPUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA \n \n39 \n \n4 SCHEDULE OF PROPORTIONATE SHARE OF THE NET OPEB LIABILITY \n \nSCHOOL OPEB FUND \n \n40 \n \n5 SCHEDULE OF CONTRIBUTIONS  TEACHERS RETIREMENT SYSTEM OF GEORGIA \n \n41 \n \n6 SCHEDULE OF CONTRIBUTIONS  EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA 42 \n \n7 SCHEDULE OF CONTRIBUTIONS  SCHOOL OPEB FUND \n \n43 \n \n8 NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION \n \n44 \n \n FRANKLIN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \n \nSECTION I \nFINANCIAL \nSCHEDULES \nREQUIRED SUPPLEMENTARY INFORMATION \n9 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND \nSUPPLEMENTARY INFORMATION \n10 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 11 SCHEDULE OF STATE REVENUE 12 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \n \nPage \n45 46 47 49 \n \nSECTION II \nCOMPLIANCE AND INTERNAL CONTROL REPORTS \nINDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS \nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE \n \nSECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS \n \nSECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS \n \nSECTION V MANAGEMENT'S CORRECTIVE ACTION FOR CURRENT YEAR FINDINGS SCHEDULE OF MANAGEMENT'S CORRECTIVE ACTION \n \n SECTION I FINANCIAL \n \n Greg S. Griffin \nSTATE AUDITOR \n(404) 656-2174 \n \nDEPARTMENT OF AUDITS AND ACCOUNTS \n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \nAugust 1, 2019 \n \nThe Honorable Brian P. Kemp, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the State Board of Education \nand Superintendent and Members of the Franklin County Board of Education \nINDEPENDENT AUDITOR'S REPORT \nReport on the Financial Statements \nWe have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Franklin County Board of Education (School District), as of and for the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise the School District's basic financial statements as listed in the table of contents. \nManagement's Responsibility for the Financial Statements \nManagement is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. \nAuditor's Responsibility \nOur 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 Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. \nAn audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also \n \n includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. \nWe believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. \nOpinions \nIn our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the of the governmental activities, each major fund, and the aggregate remaining fund information of the School District as of June 30, 2018, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. \nEmphasis of Matter \nAs described in Note 2 to the financial statements, in 2018, the School District adopted new accounting guidance, Governmental Accounting Standards Board (GASB) Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, as amended by GASB Statement No. 85, Omnibus 2017. The School District restated beginning net position for the effect of GASB Statement No. 75. Our opinions are not modified with respect to this matter. \nOther Matters \nRequired Supplementary Information \nAccounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis and required supplementary information listed in the table of contents 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 our 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. \nOther Information \nOur audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the School District's basic financial statements. The accompanying supplementary information, as listed in the table of contents, is presented for the purposes of additional analysis and is not a required part of the basic financial statements. The Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by Title 2 U. S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is also not a required part of the basic financial statements. \n \n The accompanying supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the accompanying supplementary information is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. \nOther Reporting Required by Government Auditing Standards \nIn accordance with Government Auditing Standards, we have also issued our report dated August 1, 2019 on our consideration of the School District'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 solely 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 effectiveness of the School District's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the School District's internal control over financial reporting and compliance. \nA 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. \nRespectfully submitted, \nGreg S. Griffin State Auditor \n \n (This page left intentionally blank) \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2018 \nINTRODUCTION \nThe discussion and analysis of the Franklin County Board of Education's (School District) financial performance provides an overview of the School District's financial activities for the fiscal years ended June 30, 2018 and June 30, 2017. The intent of this discussion and analysis is to look at the School District's financial performance as a whole. Readers should also review the financial statements and the notes to the basic financial statements to enhance their understanding of the School District's financial performance. \nFINANCIAL HIGHLIGHTS \nKey financial highlights for the fiscal years 2018 and 2017 are as follows: \n The School District had $41,290,804 and $40,404,483 in expenses relating to governmental activities for the fiscal years ended June 30, 2018 and June 30, 2017, respectively. Only $25,669,673 and $26,372,770 of the above mentioned expenses for 2018 and 2017 were offset by program specific charges for services, grants and contributions. General revenues (primarily property and sales taxes) of $18,681,950 and $16,416,771, respectively, for 2018 and 2017, along with fund balance were adequate to provide for these programs. \nOVERVIEW OF THE FINANCIAL STATEMENTS \nThis annual report consists of three parts; management's discussion and analysis (this section), the basic financial statements including the notes to the basic financial statements and required supplementary information. The basic financial statements include two levels of statements that present different views of the School District. These include the government-wide and fund financial statements. \nThe government-wide financial statements include the Statement of Net Position and Statement of Activities. These statements provide information about the activities of the School District presenting both short-term and long-term information about the overall financial status. \nThe fund financial statements focus on individual parts, reporting the School District's operation in more detail. The governmental funds statements disclose how basic services are financed in the shortterm as well as what remains for future spending. The fiduciary funds statements provide information about the financial relationships in which the School District acts solely as a trustee or agent for the benefit of others. \nThe fund financial statements reflect the School District's most significant funds. For the years ending June 30, 2018 and 2017, the general fund, the capital projects fund, and the debt service fund represent the most significant funds. \nThe financial statements also include notes that explain some of the information in the statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and supports the financial statements. Additionally, other supplementary information (not required) is also presented that further supplements understanding of the financial statements. \ni \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2018 \nGovernment-wide Statements \nThe government-wide statements report information about the School District as a whole using accounting methods similar to those used by private-sector companies. The Statement of Net Position includes all of the School District's assets and liabilities. All of the current fiscal year's revenues and expenses are accounted for in the Statement of Activities regardless of when cash is received or paid. \nThe two government-wide statements report the School District's net position and how it has changed. Net position, the difference between the School District's assets and deferred outflows of resources, and liabilities and deferred inflows of resources, are one way to measure the School District's overall financial health or position. Over time, increases or decreases in net position are an indication of whether its financial health is improving or deteriorating. Changes may be the result of many factors, including those not under the School District's control, such as the property tax base, facility conditions, required educational programs and other factors. \nIn the Statement of Net Position and the Statement of Activities, the School District has one distinct type of activity: \n Governmental Activities  All of the School District's programs and services are reported here including instruction, support services, operation and maintenance of plant, pupil transportation, food service, student activity accounts and various others. \nFund Financial Statements \nThe School District's fund financial statements provide detailed information about the most significant funds, not the School District as a whole. Some funds are required by State law and some by bond requirements. The School District's major governmental funds are the general fund, the capital projects fund, and the debt service fund. \nGovernmental Funds - Most of the School District's activities are reported in governmental funds, which focus on the determination of financial position and change in financial position, not on income determination. These funds are reported using the modified accrual method of accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the School District's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance educational programs. The relationship (or differences) between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds are reconciled to the financial statements. \nFiduciary Funds - The School District is the trustee, or fiduciary, for assets that belong to others, such as school clubs and organizations within the principals' accounts. The School District is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. The School District excludes these activities from the governmentwide financial statements because it cannot use these assets to finance its operations. \nii \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2018 \n \nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT AS A WHOLE \nRecall that the Statement of Net Position provides the perspective of the School District as a whole. Table 1 provides a summary of the School District's net position for fiscal years 2018 and 2017. Prior year amounts were not restated to reflect the fiscal year 2018 implementation of GASB Statement No. 75. \nTable 1 Net Position \n \nGovernmental Activities \n \nFiscal \n \nFiscal \n \nYear 2018 \n \nYear 2017 \n \nAssets Current and Other Assets Capital Assets, Net \n \n$ 24,700,527 $ 14,803,930 \n \n64,013,388 \n \n64,122,285 \n \nTotal Assets \n \n88,713,915 \n \n78,926,215 \n \nDeferred Outflows of Resources \n \n6,927,729 \n \n8,844,415 \n \nTotal Assets and Deferred Outflows of Resources \n \n95,641,644 \n \n87,770,630 \n \nLiabilities Current and Other Liabilities Long-Term Liabilities \n \n70,904,621 8,585,000 \n \n40,433,349 2,595,754 \n \nTotal Liabilities \n \n79,489,621 \n \n43,029,103 \n \nDeferred Inflows of Resources \n \n3,429,164 \n \n760,402 \n \nTotal Liabilities and Deferred Inflows of Resources \n \n82,918,785 \n \n43,789,505 \n \nNet Position Net Investment in Capital Assets Restricted Unrestricted (Deficit) \n \n63,316,603 3,504,591 \n(54,098,335) \n \n63,169,340 2,802,677 \n(21,990,892) \n \nTotal Net Position \n \n$ \n \n12,722,859 $ \n \n43,981,125 \n \nTotal assets and deferred outflows of resources increased by $7,871,014 which was primarily due to increase in cash related to the sale of bonds. \n \niii \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2018 \n \nTable 2 shows the changes in net position for fiscal years ending June 30, 2018 and June 30, 2017. Prior year amounts were not restated to reflect the fiscal year 2018 implementation of GASB Statement No. 75. \n \nTable 2 Change in Net Position \n \nRevenues Program Revenues: Charges for Services Operating Grants and Contributions Capital Grants and Contributions \n \nGovernmental Activities \n \nFiscal \n \nFiscal \n \nYear 2018 \n \nYear 2017 \n \n$ \n \n518,599 $ \n \n531,680 \n \n25,073,754 \n \n25,763,874 \n \n77,320 \n \n77,216 \n \nTotal Program Revenues \n \n25,669,673 \n \n26,372,770 \n \nGeneral Revenues: Taxes Property Taxes For Maintenance and Operations Railroad Cars Sales Taxes Special Purpose Local Option Sales Tax For Debt Services Other Taxes Grants and Contributions not Restricted to Specific Program Investment Earnings Miscellaneous \nSpecial Items \n \n10,578,139 12,770 \n \n10,414,500 - \n \n3,518,976 221,783 \n2,579,180 82,754 \n1,147,686 540,662 \n \n3,156,985 191,501 \n1,504,405 23,366 \n1,126,014 - \n \nTotal General Revenues and Special Items \n \n18,681,950 \n \n16,416,771 \n \nTotal Revenues \n \n44,351,623 \n \n42,789,541 \n \nProgram Expenses: 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 Operations of Non-Instructional Services Enterprise Operations Food Services Interest on Short-Term and Long-Term Debt \n \n25,810,075 \n1,533,351 1,718,079 \n713,923 560,664 2,485,369 357,310 2,403,623 2,892,899 \n313,898 \n552,064 1,863,156 \n86,393 \n \n25,606,027 \n1,510,365 2,019,750 \n575,775 592,867 2,152,114 214,749 2,255,607 2,731,444 \n178 295,070 \n597,206 1,677,282 \n176,049 \n \nTotal Expenses \n \n41,290,804 \n \n40,404,483 \n \nIncrease in Net Position \n \n$ 3,060,819 $ 2,385,058 \n \niv \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2018 \n \nGeneral revenues increased by $2,265,179 during fiscal year 2018. The increases are principally due to the higher federal grant funding from the Striving Reader Grant. Other increases occur in sales tax revenue and state QBE funding. \n \nGovernmental Activities \n \nThe Statement of Activities shows the cost of program services and the charges for services and grants offsetting those services. Table 3 shows the total cost of services and the net cost of services. Net cost of services can be defined as the total cost less fees generated by the activities and intergovernmental revenue provided for specific programs. The net cost reflects the financial burden on the School District's taxpayers by each activity. Prior year amounts were not restated to reflect the fiscal year 2018 implementation of GASB Statement No. 75. \n \nInstruction \n \n$ \n \nSupport Services: \n \nPupil Services \n \nImprovement of Instructional Services \n \nEducational Media Services \n \nGeneral Administration \n \nSchool Administration \n \nBusiness Administration \n \nMaintenance and Operation of Plant \n \nStudent Transportation Services \n \nCentral Support Services \n \nOther Support Services \n \nOperations of Non-Instructional Services: \n \nEnterprise Operations \n \nCommunity Services \n \nFood Services \n \nInterest on Short-Term and Long-Term Debt \n \nTotal Expenses \n \n$ \n \nTable 3 Governmental Activities \n \nTotal Cost of Services \n \nFiscal \n \nFiscal \n \nYear 2018 \n \nYear 2017 \n \n25,810,075 $ \n \n25,606,027 $ \n \n1,533,351 1,718,079 \n713,923 560,664 2,485,369 357,310 2,403,623 2,892,899 \n313,898 \n \n1,510,365 2,019,750 \n575,775 592,867 2,152,114 214,749 2,255,607 2,731,444 \n178 295,070 \n \n552,064 - \n1,863,156 86,393 \n \n597,206 - \n1,677,282 176,049 \n \n41,290,804 $ \n \n40,404,483 $ \n \nNet Cost of Services \n \nFiscal \n \nFiscal \n \nYear 2018 \n \nYear 2017 \n \n7,238,829 $ \n \n6,448,493 \n \n1,129,959 1,098,382 \n207,693 (177,244) 1,405,073 353,976 1,296,506 2,139,976 \n266,815 \n \n1,145,980 1,283,502 \n81,344 (111,419) 1,089,109 206,080 1,116,219 1,894,573 \n18 248,002 \n \n366,704 (1,076) \n209,145 86,393 \n \n443,525 (1,212) 11,449 \n176,049 \n \n15,621,131 $ \n \n14,031,712 \n \nAlthough program revenues make up a majority of the funding, the School District is still dependent upon tax revenues for governmental activities. For 2018, 38.57% of instruction and support activities were supplemented by taxes and other general revenues compared to 35.31% in 2017. \n \nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT'S FUNDS The School District's governmental funds are accounted for using the modified accrual basis of accounting. The governmental funds had total revenues and other financing sources of $53,155,930 and total expenses of $43,062,776. There was an increase in the fund balance totaling $10,093,155 for the governmental funds as a whole. The issuance of bonds in the amount of $8,585,000 makes up the majority of this increase. \n \nv \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2018 \n \nGeneral Fund Budgeting Highlights \n \nThe School District's budget is prepared according to Georgia Law. The most significant budgeted fund is the general fund, funded primarily through state revenue and local property tax revenue. During the course of fiscal years 2018 and 2017, the School District amended its general fund budget as needed. \n \nDuring fiscal year 2018 the general fund had final actual revenues and other financing sources totaling $40,435,882, which represented an increase from the original budgeted amount of $38,843,858 by $1,592,024. This difference (final actual vs. original budget) was due to the receipt of state revenue and student activity fees that were not determined at the time of the budget. \n \nCAPITAL ASSETS \n \nAt the fiscal years ended June 30, 2018 and June 30, 2017, the School District had $64,013,388 and $64,122,285, respectively, invested in capital assets, net of accumulated depreciation. These assets are made up of a broad range of capital assets, including land; buildings; transportation, food service and maintenance equipment. Table 4 reflects a summary of these balances, by class, net of accumulated depreciation. \n \nTable 4 Capital Assets (Net of Depreciation) \n \nGovernmental Activities \n \nFiscal \n \nFiscal \n \nYear 2018 \n \nYear 2017 \n \nLand \n \n$ \n \n1,338,157 $ \n \nConstruction In Progress \n \n530,041 \n \nBuilding and Improvements \n \n53,015,806 \n \nEquipment \n \n2,017,177 \n \nLand Improvements \n \n6,846,820 \n \nIntangible Assets \n \n265,387 \n \n1,338,157 323,531 \n53,180,304 2,138,119 6,975,098 167,077 \n \nTotal \n \n$ 64,013,388 $ \n \n64,122,286 \n \nThe overall capital assets decreased in fiscal year 2018 by $108,898 due to few current year additions being added and continuing depreciation of assets. \n \nvi \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2018 \n \nDEBT ADMINISTRATION \n \nAt June 30, 2018, the School District had $8,585,000 in total debt outstanding with $2,550,000 due within one year. Table 5 summarizes bond debt outstanding at June 30, 2018 and 2017. \n \nTable 5 Debt at June 30 \n \nGovernmental Activities \n \nFiscal \n \nFiscal \n \nYear 2018 \n \nYear 2017 \n \nBonds Payable \n \n$ \n \nUnamortized Bond Premiums \n \n8,585,000 $ - \n \n2,550,000 225,754 \n \nTotal \n \n$ \n \n8,585,000 $ \n \n2,775,754 \n \nCURRENT ISSUES \nIn fiscal year 2018, the cost of the employer portion of TRS pension will increase approximately $600,000, and an increase in health insurance premiums for non-certified employees is expected to add another $750,000. These increases are due to a $2,400 higher employer cost in insurance premium for classified employees and a 2.54% higher employer TRS employer rate. In addition, revenues will again be reduced from the true earned amount as the State of Georgia imposes another QBE Austerity Reduction expected to cost the School District $411,711 in revenue, bringing the grand total of revenue lost since the cuts began in 2003 to more than $23.0 million. \nApproximately 85% of general fund expenses, the main operating fund for the School District, were related to salaries and employee benefits for the year ended June 30, 2018. More than a third of certified personnel in the School District have 22 years or more of experience resulting in salaries at the highest possible state pay level. With such personnel heavy expenses, it is difficult to offset mandated expense increases such as TRS and health insurance premium expenses. The School District consistently evaluates how funds can be spent smarter and more effectively to ensure that County students receive a quality education from effective personnel. \nThe School District's millage rate for fiscal year 2018 was 16.868. The net digest has remained flat or decreased still the beginning of the recession in fiscal year 2007. But in fiscal year 2018 there was a $47.0 million increase in the adjusted net maintenance and operations digest. This allowed the School District to decrease the millage rate by 1.25 mills while not substantially decreasing revenue. \nCalendar year 2017 saw the end of SPLOST IV revenue. Starting January 1, 2018, sales tax revenue officially began for SPLOST V projects. Because of two new restaurants and higher sales tax revenue from interstate traffic, sales tax revenue has been up over $50,000 per month in 2018. An $8.5 million construction bond was issued in April 2018 to start the Career and College Academy at the high school. Expansion of Carnesville Intermediate School is also planned within the next two years. \n \nvii \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2018 CONTACTING THE SCHOOL DISTRICT'S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, investors and creditors with a general overview of the School District's finances and to show the School District's accountability for the money it receives. If you have questions about this report or need additional financial information, contact Tom Porter at the Franklin County Board of Education, 280 Busha Road, Carnesville, GA 30521. You may also email your questions to tom.porter@franklin.k12.ga.us. \nviii \n \n FRANKLIN COUNTY BOARD OF EDUCATION \n \n FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF NET POSITION JUNE 30, 2018 \nASSETS \nCash and Cash Equivalents Receivables, Net \nTaxes State Government Federal Government Local Other Inventories Prepaid Items Capital Assets, Non-Depreciable Capital Assets, Depreciable (Net of Accumulated Depreciation) \nTotal Assets \nDEFERRED OUTFLOWS OF RESOURCES \nRelated to Defined Benefit Pension Plans Related to OPEB Plan \nTotal Deferred Outflows of Resources \nLIABILITIES \nAccounts Payable Salaries and Benefits Payable Payroll Withholdings Payable Interest Payable Contracts Payable Retainages Payable Deposits and Unearned Revenues Net Pension Liability Net OPEB Liability Long-Term Liabilities \nDue Within One Year Due in More Than One Year \nTotal Liabilities \nDEFERRED INFLOWS OF RESOURCES \nRelated to Defined Benefit Pension Plans Related to OPEB Plan \nTotal Deferred Inflows of Resources \nNET POSITION \nNet Investment in Capital Assets Restricted for \nContinuation of Federal Programs Debt Service Capital Projects Unrestricted (Deficit) \nTotal Net Position \nThe notes to the basic financial statements are an integral part of this statement. \n \nEXHIBIT \"A\" \n \nGOVERNMENTAL ACTIVITIES \n \n$ \n \n20,057,207.17 \n \n694,608.41 3,102,723.21 \n587,463.60 17,888.89 2,386.97 45,004.61 \n193,244.31 1,868,198.34 62,145,189.88 \n \n88,713,915.39 \n \n5,437,642.20 1,490,087.00 \n6,927,729.20 \n \n1,484,863.80 3,915,873.80 \n442,250.24 26,638.58 74,600.00 11,507.00 \n154,440.00 30,818,976.00 33,975,472.00 \n2,550,000.00 6,035,000.00 \n79,489,621.42 \n \n842,018.00 2,587,146.00 \n3,429,164.00 \n \n63,316,602.58 \n407,125.14 3,048,035.66 \n49,430.38 (54,098,334.59) \n \n$ \n \n12,722,859.17 \n \n- 1 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES \nFOR THE YEAR ENDED JUNE 30, 2018 \n \nGOVERNMENTAL ACTIVITIES \nInstruction Support Services \nPupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Operations of Non-Instructional Services Enterprise Operations Community Services Food Services Interest on Short-Term and Long-Term Debt \nTotal Governmental Activities \nGeneral Revenues Taxes Property Taxes For Maintenance and Operations Railroad Cars Sales Taxes Special Purpose Local Option Sales Tax For Debt Services Other Sales Tax Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous \nSpecial Items Insurance proceeds \nTotal General Revenues and Special Items \nChange in Net Position \nNet Position - Beginning of Year, Restated \n \nEXPENSES \n \nCHARGES FOR SERVICES \n \nPROGRAM REVENUES \n \n$ \n \n25,810,074.79 $ \n \n1,533,350.84 1,718,078.85 \n713,923.05 560,663.99 2,485,369.44 357,310.35 2,403,622.50 2,892,898.74 313,897.90 \n \n552,064.15 - \n1,863,061.15 86,488.58 \n \n$ \n \n41,290,804.33 $ \n \n12,000.00 \n6,875.00 13,646.70 - \n185,359.79 1,076.00 \n299,641.45 - \n518,598.94 \n \nNet Position - End of Year \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 2 - \n \n EXHIBIT \"B\" \n \nPROGRAM REVENUES OPERATING GRANTS AND \nCONTRIBUTIONS \n \nCAPITAL GRANTS AND CONTRIBUTIONS \n \nNET (EXPENSES) REVENUES \nAND CHANGES IN NET POSITION \n \n$ \n \n18,559,245.64 $ \n \n403,391.66 619,697.20 506,230.46 737,908.21 1,080,296.77 \n3,334.03 1,100,241.00 \n661,956.81 47,082.82 \n \n1,354,369.76 - \n \n$ \n \n25,073,754.36 $ \n \n- $ \n77,319.58 - \n- \n77,319.58 \n \n(7,238,829.15) \n(1,129,959.18) (1,098,381.65) \n(207,692.59) 177,244.22 (1,405,072.67) (353,976.32) (1,296,506.50) (2,139,975.65) (266,815.08) \n(366,704.36) 1,076.00 \n(209,049.94) (86,488.58) \n(15,621,131.45) \n \n10,578,139.01 12,770.24 \n3,518,975.66 221,782.67 \n2,579,180.00 82,754.47 \n1,147,686.35 \n540,661.64 \n18,681,950.04 \n3,060,818.59 \n9,662,040.58 \n \n$ \n \n12,722,859.17 \n \n- 3 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION BALANCE SHEET \nGOVERNMENTAL FUNDS JUNE 30, 2018 \n \nEXHIBIT \"C\" \n \nASSETS \nCash and Cash Equivalents Receivables, Net \nTaxes State Government Federal Government Local Other Inventories Prepaid Items \nTotal Assets \nLIABILITIES \nAccounts Payable Salaries and Benefits Payable Payroll Withholdings Payable Contracts Payable Retainages Payable Deposits and Unearned Revenue \nTotal Liabilities \nDEFERRED INFLOWS OF RESOURCES \nUnavailable Revenue - Property Taxes \nFUND BALANCES \nNonspendable Restricted Assigned Unassigned \nTotal Fund Balances \n \nGENERAL FUND \n \nCAPITAL PROJECTS \nFUND \n \nDEBT SERVICE \nFUND \n \nTOTAL \n \n$ \n \n9,296,811.20 $ \n \n8,023,751.74 $ \n \n2,736,644.23 $ 20,057,207.17 \n \n356,578.40 3,102,723.21 \n587,463.60 17,888.89 2,386.97 45,004.61 \n193,244.31 \n \n- \n \n338,030.01 \n \n694,608.41 \n \n- \n \n- \n \n3,102,723.21 \n \n- \n \n- \n \n587,463.60 \n \n- \n \n- \n \n17,888.89 \n \n- \n \n- \n \n2,386.97 \n \n- \n \n- \n \n45,004.61 \n \n- \n \n- \n \n193,244.31 \n \n$ 13,602,101.19 $ \n \n8,023,751.74 $ \n \n3,074,674.24 $ 24,700,527.17 \n \n$ \n \n1,484,863.80 $ \n \n3,915,873.80 \n \n442,250.24 \n \n- \n \n- \n \n154,440.00 \n \n5,997,427.84 \n \n- $ 74,600.00 11,507.00 - \n86,107.00 \n \n- $ - \n- \n \n1,484,863.80 3,915,873.80 \n442,250.24 74,600.00 11,507.00 \n154,440.00 \n6,083,534.84 \n \n108,334.75 \n \n- \n \n- \n \n108,334.75 \n \n238,248.92 362,120.53 525,427.87 6,370,541.28 \n7,496,338.60 \n \n7,937,644.74 \n- \n7,937,644.74 \n \n3,074,674.24 \n- \n3,074,674.24 \n \n238,248.92 11,374,439.51 \n525,427.87 6,370,541.28 \n18,508,657.58 \n \nTotal Liabilities, Deferred Inflows of Resources, and Fund Balances \n \n$ 13,602,101.19 $ \n \n8,023,751.74 $ \n \n3,074,674.24 $ 24,700,527.17 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 4 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \nTO THE STATEMENT OF NET POSITION JUNE 30, 2018 \n \nEXHIBIT \"D\" \n \nTotal fund balances - governmental funds (Exhibit \"C\") \nAmounts reported for governmental activities in the Statement of Net Position are different because: \nCapital assets used in governmental activities are not financial resources and therefore are not reported in the funds. \nLand Construction in progress Buildings and improvements Equipment Land improvements Intangible assets Accumulated depreciation \nSome liabilities are not due and payable in the current period and, therefore, are not reported in the funds. \nNet pension liability Net OPEB liability \nDeferred outflows and inflows of resources related to pensions and OPEB are applicable to future periods and, therefore, are not reported in the funds. \nRelated to pensions Related to OPEB \nTaxes that are not available to pay for current period expenditures are deferred in the funds. \nLong-term liabilities, and related accrued interest, are not due and payable in the current period and therefore are not reported in the funds. \nBonds payable Accrued interest payable \n \n$ 18,508,657.58 \n \n$ 1,338,157.39 530,040.95 \n65,112,119.05 6,698,572.53 8,344,901.15 488,530.40 \n(18,498,933.25) \n \n64,013,388.22 \n \n$ (30,818,976.00) (33,975,472.00) \n \n(64,794,448.00) \n \n$ 4,595,624.20 (1,097,059.00) \n \n3,498,565.20 108,334.75 \n \n$ (8,585,000.00) (26,638.58) \n \n(8,611,638.58) \n \nNet position of governmental activities (Exhibit \"A\") \n \n$ 12,722,859.17 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 5 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES \nGOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2018 \n \nEXHIBIT \"E\" \n \nREVENUES \nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous \nTotal Revenues \nEXPENDITURES \nCurrent 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 Other Support Services Enterprise Operations Food Services Operation \nCapital Outlay Debt Services \nPrincipal Dues and Fees Interest \nTotal Expenditures \nRevenues over (under) Expenditures \nOTHER FINANCING SOURCES \nProceeds of Bonds Insurance Proceeds \nTotal Other Financing Sources \nNet Change in Fund Balances \nFund Balances - Beginning \n \nGENERAL FUND \n \nCAPITAL PROJECTS \nFUND \n \nDEBT SERVICE \nFUND \n \nTOTAL \n \n$ 10,627,791.93 $ 221,782.67 \n24,358,076.16 3,554,602.64 518,598.94 7,343.37 1,147,686.35 \n40,435,882.06 \n \n- $ - \n- \n \n- $ 3,518,975.66 \n75,411.10 - \n3,594,386.76 \n \n10,627,791.93 3,740,758.33 \n24,358,076.16 3,554,602.64 518,598.94 82,754.47 1,147,686.35 \n44,030,268.82 \n \n24,215,537.17 \n1,507,293.82 1,699,722.20 \n686,137.06 553,794.47 2,396,210.55 340,541.14 2,311,055.13 2,639,654.29 313,897.90 552,064.15 1,712,310.77 \n- \n- \n38,928,218.65 \n1,507,663.41 \n \n- \n81,420.00 5,746.42 1,588,115.45 \n1,000.00 \n- \n1,676,281.87 \n(1,676,281.87) \n \n- \n- \n2,370,000.00 - \n88,275.00 \n2,458,275.00 \n1,136,111.76 \n \n24,215,537.17 \n1,507,293.82 1,699,722.20 \n686,137.06 553,794.47 2,396,210.55 421,961.14 2,311,055.13 2,645,400.71 313,897.90 552,064.15 1,712,310.77 1,588,115.45 \n2,370,000.00 1,000.00 \n88,275.00 \n43,062,775.52 \n967,493.30 \n \n1,507,663.41 5,988,675.19 \n \n8,585,000.00 540,661.64 \n9,125,661.64 7,449,379.77 \n488,264.97 \n \n1,136,111.76 1,938,562.48 \n \n8,585,000.00 540,661.64 \n9,125,661.64 10,093,154.94 \n8,415,502.64 \n \nFund Balances - Ending \n \n$ 7,496,338.60 $ 7,937,644.74 $ 3,074,674.24 $ 18,508,657.58 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 6 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF \nREVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2018 \n \nEXHIBIT \"F\" \n \nNet change in fund balances total governmental funds (Exhibit \"E\") \nAmounts reported for governmental activities in the Statement of Activities are different because: \nGovernmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of capital assets is allocated over their estimated useful lives as depreciation expense. \nCapital outlay Depreciation expense \nTaxes reported in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. \nFederal revenue reported in governmental funds that provided prior year financial resources are not reported as revenue in the Statement of Activities. \nThe issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts and the difference between the carrying value of refunded debt and the acquisition cost of refunded debt when debt is first issued. These amounts are deferred and amortized in the Statement of Activities. \nGeneral obligation bonds issued Amortization of bond premium Bond principal retirements \nDistrict pension contributions are reported as expenditures in the governmental funds when made. However, they are reported as deferred outflows of resources in the Statement of Net Position because the reported net pension/OPEB liability is measured a year before the District's report date. Pension/OPEB expense, which is the change in the net pension/OPEB liability adjusted for changes in deferred outflows and inflows of resources related to pensions/OPEB, is reported in the Statement of Activities. \nPension expense OPEB expense \nSome items reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. \nAccrued interest on issuance of bonds \n \n$ 10,093,154.94 \n \n$ 1,317,835.08 (1,426,732.54) \n \n(108,897.46) (36,882.68) \n(216,087.38) \n \n$ (8,585,000.00) 225,753.90 \n2,370,000.00 \n \n(5,989,246.10) \n \n$ \n \n69,436.85 \n \n(753,446.00) \n \n(684,009.15) \n \n2,786.42 \n \nChange in net position of governmental activities (Exhibit \"B\") \n \n$ 3,060,818.59 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 7 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET POSITION \nFIDUCIARY FUNDS JUNE 30, 2018 \nASSETS Cash and Cash Equivalents Investments \nTotal Assets \nLIABILITIES Funds Held for Others \n \nEXHIBIT \"G\" \n \nAGENCY FUNDS \n \n$ \n \n144,853.25 \n \n21,953.97 \n \n$ \n \n166,807.22 \n \n$ \n \n166,807.22 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 8 - \n \n (This page left intentionally blank) \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2018 \n \nEXHIBIT \"H\" \n \nNOTE 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY \nREPORTING ENTITY \nThe Franklin County Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a board elected by the voters and a Superintendent appointed by the Board. The School District 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. \nNOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES \nThe accompanying financial statements of the School District have been prepared in conformity with generally accepted accounting principles (GAAP) as prescribed by the Governmental Accounting Standards Board (GASB). GASB is the accepted standard-setting body for governmental accounting and financial reporting principles. The most significant of the School District's accounting policies are described below. \nBASIS OF PRESENTATION \nThe School District's basic financial statements are collectively comprised of the government-wide financial statements, fund financial statements and notes to the basic financial statements. The government-wide statements focus on the School District as a whole, while the fund financial statements focus on major funds. Each presentation provides valuable information that can be analyzed and compared between years and between governments to enhance the information's usefulness. \nGOVERNMENT-WIDE STATEMENTS: \nThe Statement of Net Position 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. \nThe Statement of Net Position presents the School District's non-fiduciary assets and liabilities, with the difference reported as net position. Net position is reported in three categories as follows: \n1. Net investment in capital assets consists of the School District's total investment in capital assets, net of accumulated depreciation, and reduced by outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of net investment in capital assets. \n2. Restricted net position consists of resources for which the School District is legally or contractually obligated to spend in accordance with restrictions imposed by external third parties or imposed by law through constitutional provisions or enabling legislation. \n3. Unrestricted net position consists of resources not meeting the definition of the two preceding categories. Unrestricted net positon often has constraints on resources imposed by management which can be removed or modified. \nThe Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities. \nDirect expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of 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. \n \n- 10 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2018 \n \nEXHIBIT \"H\" \n \nProgram 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. \nFUND FINANCIAL STATEMENTS \nThe 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 financial statements are presented for governmental and fiduciary funds. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column. All remaining governmental funds are aggregated and reported as nonmajor funds. \nThe School District reports the following major governmental funds: \n The general fund is the School District's primary operating fund. It accounts for and reports all financial resources not accounted for and reported in another fund. \n The capital projects fund accounts for and reports financial resources including Education Special Purpose Local Option Sales Tax (ESPLOST) and bond proceeds that are restricted, committed or assigned for capital outlay expenditures, including the acquisition or construction of capital facilities and other capital assets. \n The debt service fund accounts for and reports financial resources that are restricted, committed, or assigned including taxes (sales) legally restricted for the payment of general long-term principal and interest. \nThe School District reports the following fiduciary fund type: \n Agency funds are used to report resources held by the School District in a purely custodial capacity (assets equal liabilities) and do not involve measurement of results of operations. \nBASIS OF ACCOUNTING \nThe basis of accounting determines when transactions are reported on the financial statements. The government-wide 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 and grants. 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 is recognized in the fiscal year in which all eligibility requirements have been satisfied. \nThe 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. \nGovernmental 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. The School District considers all intergovernmental revenues to be available if they are collected within 120 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, except for principal and interest on general \n \n- 11 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2018 \n \nEXHIBIT \"H\" \n \nlong-term debt, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities are reported as other financing sources. \nThe 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. \nNEW ACCOUNTING PRONOUNCEMENTS \nIn fiscal year 2018, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other than Pensions. This statement establishes standards for recognizing and measuring liabilities, deferred outflows of resources, deferred inflows of resources, and expense/expenditures. For defined benefit OPEB, this statement identifies the methods and assumptions that are required to be used to project benefit payments, discount projected benefit payments to their actuarial present value, and attribute that present value to periods of employee service. Note disclosure and required supplementary information requirements about defined benefit OPEB also are addressed. The adoption of this statement has a significant impact on the School District's financial statements. As noted in the Restatement of Net Position note disclosure, the School District restated beginning net position for the cumulative effect of this accounting change. \nIn fiscal year 2018, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 81, Irrevocable Split-Interest Agreements. This statement requires that a government that receives resources pursuant to an irrevocable split-interest agreement recognize assets, liabilities, and deferred inflows of resources at the inception of the agreement. Furthermore, this statement requires that a government recognize assets representing its beneficial interests in irrevocable split-interest agreements that are administered by a third party, if the government controls the present service capacity of the beneficial interests. This statement requires that a government recognize revenue when the resources become applicable to the reporting period. The adoption of this statement does not have a significant impact on the School District's financial statements. \nIn fiscal year 2018, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 85, Omnibus 2017. The objective of this statement is to address practice issues that have been identified during implementation and application of certain GASB Statements. This statement addresses a variety of topics including issues related to blending component units, goodwill, fair value measurement and application, and postemployment benefits (pensions and other postemployment benefits [OPEB]). The adoption of this statement does not have a significant impact on the School District's financial statements. \nIn fiscal year 2018, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 86, Certain Debt Extinguishment Issues. The primary objective of this statement is to improve consistency in accounting and financial reporting for in-substance defeasance of debt by providing guidance for transactions in which cash and other monetary assets acquired with only existing resources--resources other than the proceeds of refunding debt--are placed in an irrevocable trust for the sole purpose of extinguishing debt. This statement also improves accounting and financial reporting for prepaid insurance on debt that is extinguished and notes to financial statements for debt that is defeased in substance. The adoption of this statement does not have a significant impact on the School District's financial statements. \n \n- 12 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2018 \n \nEXHIBIT \"H\" \n \nCASH AND CASH EQUIVALENTS \nCash and cash equivalents consist of cash on hand, demand deposits, investments in the State of Georgia local government investment pool (Georgia Fund 1) 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 (O.C.G.A.) 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. \nINVESTMENTS \nThe School District can invest its funds as permitted by O.C.G.A. 36-83-4. 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. \nInvestments 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. All other investments are reported at fair value. \nFor accounting purposes, certificates of deposit are classified as investments if they have an original maturity greater than three months when acquired. \nRECEIVABLES \nReceivables 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. \nDue to other funds and due from other funds consist of activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year. \nINVENTORIES \nFood Inventories \nOn 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 (calculated on the first-in, first-out basis). 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. \nPREPAID ITEMS \nPayments made to vendors for services that will benefit future accounting periods are recorded as prepaid items, in both the government-wide and governmental fund financial statements. \nCAPITAL ASSETS \nOn the government-wide financial statements, capital assets are recorded 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 the acquisition value on the date donated. 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. The School District does not capitalize book collections or works of art. \n \n- 13 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2018 \n \nEXHIBIT \"H\" \n \nCapital acquisition and construction are recorded as expenditures in the governmental fund financial statements at the time of purchase (including ancillary charges), and the related assets are reported as capital assets in the governmental activities column in the government-wide financial statements. \n \nDepreciation is computed using the straight-line for all assets, except land, and is used to allocate the actual or estimated historical cost of capital assets over estimated useful lives. \n \nCapitalization thresholds and estimated useful lives of capital assets reported in the governmentwide statements are as follows: \n \nCapitalization Policy \n \nEstimated Useful Life \n \nLand Land Improvements \nBuildings and Improvements Equipment Intangible Assets \n \nAny Amount $ 10,000.00 \n$ 20,000.00 $ 5,000.00 $ 20,000.00 \n \nN/A 20 to 80 years \n25 to 80 years 5 to 50 years Estimated Life \n \nDEFERRED OUTFLOWS/INFLOWS OF RESOURCES \nIn addition to assets, the statement of financial position will report a separate section for deferred outflows of resources. This separate financial statement element, represents a consumption of resources that applies to a future period(s) and therefore will not be recognized as an outflow of resources (expense/expenditure) until then. \nIn addition to liabilities, the statement of financial position will report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of resources that applies to a future period(s) and therefore will not be recognized as an inflow of resources (revenue) until that time. \nLONG-TERM LIABILITIES AND BOND DISCOUNTS/PREMIUMS \nIn the School District's government-wide financial statements, outstanding debt is reported as liabilities. Bond premiums and discounts and the difference between the reacquisition price and the net carrying value of refunded debt are deferred and amortized over the life of the bonds using the straight-line method. To conform to generally accepted accounting principles, bond premiums and discounts should be amortized using the effective interest method. The effect of this deviation is deemed to be immaterial to the fair presentation of the basic financial statements. Bond issuance costs are recognized as an outflow of resources in the fiscal year in which the bonds are issued. \nIn the governmental fund financial statements, the School District recognizes the proceeds of debt and premiums as other financing sources of the current period. Bond issuance costs are reported as debt service expenditures. \nPENSIONS \nFor purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the pension plan's fiduciary net position and additions to/deductions from the plan's fiduciary net position have been determined on the same basis as they are reported by the plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. \n \n- 14 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2018 \n \nEXHIBIT \"H\" \n \nPOSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS (OPEB) \nFor purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the Georgia School Employees Postemployment Benefit Fund (School OPEB Fund) and additions to/deductions from School OPEB Fund fiduciary net position have been determined on the same basis as they are reported by School OPEB Fund. For this purpose, benefit payments are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. \nFUND BALANCES \nFund balance for governmental funds is reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. \nThe School District's fund balances are classified as follows: \nNonspendable consists of resources that cannot be spent either because they are in a nonspendable form or because they are legally or contractually required to be maintained intact. \nRestricted consists of resources that can be used only for specific purposes pursuant constraints either (1) externally imposed by creditors, grantors, contributors, or laws and regulations of other governments or (2) imposed by law through constitutional provisions or enabling legislation. \nCommitted consists of resources that can be used only for specific purposes pursuant to constraints imposed by formal action of the Board. The Board is the School District's highest level of decisionmaking authority, and the formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution approved by the Board. Committed fund balance also should incorporate contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements. \nAssigned consists of resources constrained by the School District's intent to be used for specific purposes, but are neither restricted nor committed. The intent should be expressed by (1) the Board or (2) the budget or finance committee, or the Superintendent, or designee, to assign amounts to be used for specific purposes. \nUnassigned consists of resources within the general fund not meeting the definition of any aforementioned category. The general fund should be the only fund that reports a positive unassigned fund balance amount. In other governmental funds, it may be necessary to report a negative unassigned fund balance. \nUSE OF ESTIMATES \nThe 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. \nPROPERTY TAXES \nThe Franklin County Board of Commissioners adopted the property tax levy for the 2017 tax digest year (calendar year) on July 31, 2017 (levy date) based on property values as of January 1, 2017. Taxes were due on November 15, 2017 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2017 tax digest are reported as revenue in the governmental funds for fiscal year 2018. The Franklin County Board of Commissioners bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2018, for maintenance and operations amounted to $9,789,366.53. \n \n- 15 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2018 \n \nEXHIBIT \"H\" \n \nThe tax millage rate levied for the 2017 tax year (calendar year) for the School District was as follows (a mill equals $1 per thousand dollars of assessed value): \n \nSchool Operations \n \n16.868 mills \n \nAdditionally, Title Ad Valorem Tax revenues, at the fund reporting level, amounted to $825,655.16 during fiscal year ended June 30, 2018. \nSALES TAXES \nEducation Special Purpose Local Option Sales Tax (ESPLOST), at the fund reporting level, during the year amounted to $3,518,975.66 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be reauthorized at least every five years. \nNOTE 3: BUDGETARY DATA \nThe budget is a complete financial plan for the School District's fiscal year, and is based upon careful estimates of expenditures together with probable funding sources. The budget is legally adopted each year for the general, debt service, and capital projects funds. There is no statutory prohibition regarding over expenditure of the budget at any level. The budget for all governmental funds, except the various school activity (principal) accounts, is prepared and adopted by fund, function and object. The legal level of budgetary control was established by the Board at the aggregate function level. The budget for the general fund was prepared in accordance with accounting principles generally accepted in the United States of America. \nThe budgetary process begins with the School District's administration presenting an initial budget for the Board's review. The administration makes revisions as necessary based on the Board's guidelines, and a tentative budget is approved. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality, as well as the School District's website. At the next regularly scheduled meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final budget. The approved budget is then submitted, in accordance with provisions of O.C.G.A. 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end. \nSee the General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances  Budget to Actual in the Supplementary Information Section for a detail of any over/under expenditures during the fiscal year under review. \nNOTE 4: DEPOSITS AND CASH EQUIVALENTS \nCOLLATERALIZATION OF DEPOSITS \nO.C.G.A.  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% 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.  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 110% of the daily pool balance. \n \n- 16 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2018 \n \nEXHIBIT \"H\" \n \nAcceptable security for deposits consists of any one of or any combination of the following: \n \n(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, \n \n(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, \n \n(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia, \n \n(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, \n \n(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, \n \n(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and \n \n(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. \nCATEGORIZATION OF DEPOSITS \n \nCustodial 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, 2018, the School District had deposits with a carrying amount of $7,714,055.92, and a bank balance of $7,990,419.30. The bank balances insured by Federal depository insurance were $1,021,953.97 and the bank balances collateralized with securities held by the pledging financial institution in the School District's name were $5,904,393.26. \n \nAt June 30, 2018, $1,064,072.07 of the School District's bank balance was exposed to custodial credit risk as follows: \n \nUninsured and Uncollateralized \n \n$ \n \n- \n \nUninsured with collateral held by the pledging \n \nfinancial institution \n \n- \n \nUninsured with collateral held by the pledging financial institution's trust department or agent but not in the School District's name \n \n1,064,072.07 \n \nTotal \n \n$ 1,064,072.07 \n \n- 17 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2018 \n \nEXHIBIT \"H\" \n \nReconciliation of cash and cash equivalents balances to carrying value of deposits: \n \nCash and cash equivalents Statement of Net Position Statement of Fiduciary Net Position \n \n$ 20,057,207.17 144,853.25 \n \nTotal cash and cash equivalents \n \n20,202,060.42 \n \nAdd: Deposits with original maturity of three months or more reported as investments \n \n21,953.97 \n \nLess: Cash on hand Investment pools reported as cash and cash equivalents \nGeorgia Fund 1 \n \n7,205.79 12,502,752.68 \n \nTotal carrying value of deposits - June 30, 2018 \n \n$ 7,714,055.92 \n \nCATEGORIZATION OF CASH EQUIVALENTS \nThe School District reported cash equivalents of $12,502,752.68 in Georgia Fund 1, a local government investment pool, which is included in the cash balances above. Georgia Fund 1 is not registered with the SEC as an investment company and does not operate in a manner consistent with the SEC's Rule 2a-7 of the Investment Company Act of 1940. The investment is valued at the pool's share price, $1.00 per share, which approximates fair value. The pool is an AAAf rated investment pool by Standard and Poor's. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2018, was 10 days. \nGeorgia Fund 1, administered by the State of Georgia, Office of the State Treasurer, is not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office of the State Treasurer for the Georgia Fund 1, does not provide for investment in derivatives or similar investments. Additional information on the Georgia Fund 1 is disclosed in the State of Georgia Comprehensive Annual Financial Report. This audit can be obtained from the Georgia Department of Audits and Accounts at www.audits.ga.gov/SGD/CAFR.html. \n \n- 18 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2018 \n \nEXHIBIT \"H\" \n \nNOTE 5: CAPITAL ASSETS \n \nThe following is a summary of changes in the capital assets for governmental activities during the fiscal year: \n \nBalances July 1, 2017 \n \nIncreases \n \nDecreases \n \nBalances June 30, 2018 \n \nGovernmental Activities Capital Assets, Not Being Depreciated: \nLand Construction in Progress \n \n$ 1,338,157.39 $ \n \n- $ \n \n- $ 1,338,157.39 \n \n323,531.11 \n \n664,508.84 \n \n457,999.00 \n \n530,040.95 \n \nTotal Capital Assets Not Being Depreciated \n \n1,661,688.50 \n \n664,508.84 \n \n457,999.00 \n \n1,868,198.34 \n \nCapital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements Intangible Assets \nLess Accumulated Depreciation for: Buildings and Improvements Equipment Land Improvements Intangible Assets \n \n64,407,930.48 6,465,459.20 8,330,726.15 328,682.06 \n \n704,188.57 233,113.33 \n14,175.00 159,848.34 \n \n11,227,627.23 4,327,339.91 1,355,628.16 161,605.41 \n \n868,685.79 354,055.99 142,453.11 \n61,537.65 \n \n- \n \n65,112,119.05 \n \n- \n \n6,698,572.53 \n \n- \n \n8,344,901.15 \n \n- \n \n488,530.40 \n \n- \n \n12,096,313.02 \n \n- \n \n4,681,395.90 \n \n- \n \n1,498,081.27 \n \n- \n \n223,143.06 \n \nTotal Capital Assets, Being Depreciated, Net \n \n62,460,597.18 \n \n(315,407.30) \n \n- \n \n62,145,189.88 \n \nGovernmental Activity Capital Assets - Net $ 64,122,285.68 $ 349,101.54 $ 457,999.00 $ 64,013,388.22 \n \nCurrent year depreciation expense by function is as follows: \n \nInstruction Support Services \nEducational Media Services School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Food Services \n \n$ \n \n16,387.26 \n \n39,792.97 \n \n11,063.44 \n \n72,885.64 \n \n213,941.35 \n \n$ 980,939.22 \n354,070.66 91,722.66 \n \n$ 1,426,732.54 \n \n- 19 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2018 \n \nEXHIBIT \"H\" \n \nNOTE 6: LONG-TERM LIABILITIES The changes in long-term liabilities during the fiscal year for governmental activities, were as follows: \n \nBalance July 1, 2017 \n \nAdditions \n \nGovernmental Activities \n \nBalance \n \nDeductions \n \nJune 30, 2018 \n \nDue Within One Year \n \nGeneral Obligation (G.O.) Bonds Unamortized Bond Premiums \n \n$ 2,370,000.00 $ 8,585,000.00 $ 2,370,000.00 $ \n \n225,753.90 \n \n- \n \n225,753.90 \n \n8,585,000.00 $ 2,550,000.00 \n \n- \n \n- \n \n$ 2,595,753.90 $ 8,585,000.00 $ 2,595,753.90 $ 8,585,000.00 $ 2,550,000.00 \n \nGENERAL OBLIGATION DEBT OUTSTANDING \n \nThe School District's bonded debt consists of an issue of general obligation bonds that are generally noncallable with interest payable semiannually. Bond proceeds primarily pay for acquiring or constructing capital facilities. The School District repays general obligation bonds from voterapproved sales taxes. General obligation bonds are direct obligations and pledge the full faith and credit of the School District. \n \nDuring the current year, the School District issued general obligation bonds totaling $8,585,000.00 for the purpose of providing funds to the School District to pay or to be applied toward the cost of (i) constructing, renovating, and equipping a Career Technical and Agricultural Education (\"CTAE\") career academy on the Franklin County High School campus; (ii) adding to, renovating, repairing, improving, acquiring and equipping school buildings and school systems facilities; (iii) acquiring miscellaneous new equipment, fixtures and furnishings for the school system, including computer technology equipment, computer software, school buses and other vehicles, transportation and maintenance equipment, and security and safety equipment; (iv) acquiring land or improving land for new for existing schools; (v) acquiring textbooks, e-books, and e-book readers for the school system; (vi) paying the expenses incident to accomplish the foregoing; and (vii) paying a portion of the interest on such debt. \n \nOf the total amount originally authorized, $4,810,000.00 remains unissued. General obligation bonds currently outstanding are as follows: \n \nDescription \n \nInterest Rate \n \nIssue Date \n \nMaturity Date \n \nAmount Issued \n \nAmount Outstanding \n \nGeneral Government - Series 2018 \n \n2.61% 4/26/2018 \n \n3/1/2023 $ 8,585,000.00 $ 8,585,000.00 \n \nThe following schedule details debt service requirements to maturity for the School District's total general obligation bonds payable: \n \nFiscal Year Ended June 30: \n \nGeneral Obligation Debt \n \nPrincipal \n \nInterest \n \n2019 2020 2021 2022 2023 \n \n$ \n \n2,550,000.00 $ \n \n189,835.81 \n \n2,615,000.00 \n \n157,513.50 \n \n1,110,000.00 \n \n89,262.00 \n \n1,140,000.00 \n \n60,291.00 \n \n1,170,000.00 \n \n30,537.00 \n \nTotal Principal and Interest \n \n$ \n \n8,585,000.00 $ \n \n527,439.31 \n \n- 20 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2018 \n \nEXHIBIT \"H\" \n \nNOTE 7: RISK MANAGEMENT \nINSURANCE \nCommercial Insurance \nThe 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; and natural disasters. Except as described below, the School District carries commercial insurance for these risks. Settled claims resulting from these insured risks have not exceeded commercial insurance coverage in any of the past three fiscal years. \nGeorgia School Boards Association Risk and Insurance Management System \nThe School District participates in the Georgia School Boards Association Risk and Insurance Management System (the System), a public entity risk pool organized on July 1, 1994, to develop and administer a plan to reduce risk of loss on account of general liability, motor vehicle liability, or property damage, including safety engineering and other loss prevention and control techniques, and to administer one or more groups of self-insurance funds, including the processing and defense of claims brought against members of the system. The School District pays an annual premium to the System for its general insurance coverage. Additional coverage is provided through agreements by the System with other companies according to their specialty for property, boiler and machinery (including coverage for flood and earthquake), general liability (including coverage for sexual harassment, molestation and abuse), errors and omissions, crime and automobile risks. Payment of excess insurance for the System varies by line of coverage. \nWORKERS' COMPENSATION \nGeorgia School Boards Association Workers' Compensation Fund \nThe School District participates in the Georgia School Boards Association Workers' Compensation Fund (the Fund), a public entity risk pool organized on July 1, 1992, 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 Fund for its Workers' Compensation insurance coverage. Excess insurance coverage is provided through an agreement by the Fund with the Safety National Casualty Corporation to provide coverage for potential losses sustained by the Fund in excess of $550 thousand loss per occurrence, up to the statutory limit. Employers' Liability insurance coverage is also provided by Safety National Casualty Corporation to provide coverage for potential losses sustained by the Fund in excess of $550 thousand loss per occurrence, up to $2.0 million. In addition to the $550,000.00 per occurrence retention, the Fund also retains an additional $200,000.00 per year corridor retention. \nUNEMPLOYMENT COMPENSATION \nThe School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the general fund with expenses/expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. \n \n- 21 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2018 \n \nEXHIBIT \"H\" \n \nChanges in the unemployment compensation claims liability during the last two fiscal years are as follows: \n \nBeginning of Year Liability \n \nClaims and Changes in Estimates \n \nClaims Paid \n \nEnd of Year Liability \n \n2017 $ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n2018 $ \n \n- \n \n$ \n \n1,038.00 \n \n$ \n \n1,038.00 \n \n$ \n \n- \n \nSURETY BOND \n \nThe School District purchased a surety bond to provide additional insurance coverage as follows: \n \nPosition Covered \n \nAmount \n \nSuperintendent \n \n$ 100,000.00 \n \nNOTE 8: FUND BALANCE CLASSIFICATION DETAILS \n \nThe School District's financial statements include the following amounts presented in the aggregate at June 30, 2018: \n \nNonspendable Inventories Prepaid Assets \nRestricted Continuation of Federal Programs Capital Projects Debt Service \nAssigned School Activity Accounts \nUnassigned \n \n$ \n \n45,004.61 \n \n193,244.31 $ \n \n238,248.92 \n \n$ \n \n362,120.53 \n \n7,937,644.74 \n \n3,074,674.24 \n \n11,374,439.51 \n \n525,427.87 6,370,541.28 \n \nFund Balance, June 30, 2018 \n \n$ \n \n18,508,657.58 \n \nWhen multiple categories of fund balance are available for expenditure, the School District will start with the most restricted category and spend those funds first before moving down to the next category with available funds. \n \n- 22 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2018 \n \nEXHIBIT \"H\" \n \nNOTE 9: SIGNIFICANT COMMITMENTS COMMITMENTS UNDER CONSTRUCTION CONTRACTS \n \nThe following is an analysis of significant outstanding construction or renovation contracts executed by the School District as of June 30, 2018: \n \nProject \n \nUnearned Executed Contracts (1) \n \nPayments through June 30, 2018 (2) \n \nFranklin County High School Career Academy $ 7,395,463.73 $ 495,720.27 \n \n(1) The amounts described are not reflected in the basic financial statements. (2) Payments include contracts and retainages payable at year end. \nNOTE 10: SIGNIFICANT CONTINGENT LIABILITIES \nFEDERAL GRANTS \nAmounts 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. Any disallowances resulting from the grantor audit may become a liability of the School District. However, the School District believes that such disallowances, if any, will be immaterial to its overall financial position. \nLITIGATION \nThe School District is a defendant in various legal proceedings pertaining to 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 have a material adverse effect on the financial condition of the School District. \nNOTE 11: OTHER POST-EMPLOYMENT BENEFITS (OPEB) \nGEORGIA SCHOOL PERSONNEL POST-EMPLOYMENT HEALTH BENEFIT FUND \nPlan Description: Certified teachers and non-certified public school employees of the School District as defined in 20-2-875 of the Official Code of Georgia Annotated (O.C.G.A.) are provided OPEB through the School OPEB Fund - a cost-sharing multiple-employer defined benefit postemployment healthcare plan, reported as an employee trust fund and administered by a Board of Community Health (Board). Title 20 of the O.C.G.A. assigns the authority to establish and amend the benefit terms of the group health plan to the Board. \nBenefits Provided: The School OPEB Fund provides healthcare benefits for retirees and their dependents due under the group health plan for public school teachers, including librarians, other certified employees of public schools, regional educational service agencies and non-certified public school employees. Retiree medical eligibility is attained when an employee retires and is immediately eligible to draw a retirement annuity from Employees' Retirement System (ERS), Georgia Judicial Retirement System (JRS), Legislative Retirement System (LRS), Teachers Retirement System (TRS) or Public School Employees Retirement System (PSERS). If elected, dependent coverage starts on the same day as retiree coverage. Medicare-eligible retirees are offered Standard and Premium Medicare Advantage plan options. Non-Medicare eligible retiree plan options include Health Reimbursement Arrangement (HRA), Health Maintenance Organization (HMO) and a High Deductible Health Plan (HDHP). The School OPEB Fund also pays for administrative expenses of the fund. By law, no other use of the assets of the School OPEB Fund is permitted. \n \n- 23 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2018 \n \nEXHIBIT \"H\" \n \nContributions: As established by the Board, the School OPEB Fund is substantially funded on a payas-you-go basis; that is, annual cost of providing benefits will be financed in the same year as claims occur. Contributions to the School OPEB Fund from the School District were $1,261,210.00 for the year ended June 30, 2018. Active employees are not required to contribute to the School OPEB Fund. \nOPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB \n \nAt June 30, 2018, the School District reported a liability of $33,975,472.00 for its proportionate share of the net OPEB liability. The net OPEB liability was measured as of June 30, 2017. The total OPEB liability used to calculate the net OPEB liability was based on an actuarial valuation as of June 30, 2016. An expected total OPEB liability as of June 30, 2017 was determined using standard roll-forward techniques. The School District's proportion of the net OPEB liability was actuarially determined based on employer contributions during the fiscal year ended June 30, 2017. At June 30, 2017, the School District's proportion was 0.241819%, which was an increase of 0.001743% from its proportion measured as of June 30, 2016. \n \nFor the year ended June 30, 2018, the School District recognized OPEB expense of $2,014,656.00. At June 30, 2018, the School District reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: \n \nDeferred Outflows of Resources \n \nOPEB \n \nDeferred Inflows of Resources \n \nChanges of assumptions \n \n$ \n \n- $ 2,587,146.00 \n \nNet difference between projected and actual earnings on OPEB plan investments \n \n9,938.00 \n \n- \n \nChanges in proportion and differences between School District contributions and proportionate share of contributions \n \n218,939.00 \n \n- \n \nSchool District contributions subsequent to the measurement date \nTotal \n \n1,261,210.00 \n \n- \n \n$ \n \n1,490,087.00 $ 2,587,146.00 \n \n- 24 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2018 \n \nEXHIBIT \"H\" \n \nSchool District contributions subsequent to the measurement date of $1,261,210.00 are reported as deferred outflows of resources and will be recognized as a reduction of the net OPEB liability in the year ended June 30, 2019. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: \n \nYear Ended June 30: \n \nOPEB \n \n2019 2020 2021 2022 2023 Thereafter \n \n$ (423,452.00) $ (423,452.00) $ (423,452.00) $ (423,452.00) $ (425,936.00) $ (238,525.00) \n \nActuarial assumptions: The total OPEB liability as of June 30, 2017 was determined by an actuarial valuation as of June 30, 2016 using the following actuarial assumptions and other inputs, applied to all periods included in the measurement and rolled forward to the measurement date of June 30, 2017: \nOPEB: \n \nInflation \n \n2.75% \n \nSalary increases \n \nERS \n \n3.25% - 7.00%, including inflation \n \nJRS \n \n4.50%, including inflation \n \nLRS \n \nNone \n \nTRS \n \n3.25 -- 9.00%, including inflation \n \nPSERS \n \nN/A \n \nLong-term expected rate of return \nHealthcare cost trend rate \n \n3.88%, compounded annually, net of investment expense, and including inflation \n \nPre-Medicare Eligible \n \n7.75% \n \nMedicare Eligible \n \n5.75% \n \nUltimate trend rate \n \nPre-Medicare Eligible \n \n5.00% \n \nMedicare Eligible \n \n5.00% \n \nYear of Ultimate trend rate \n \n2022 \n \n- 25 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2018 \n \nEXHIBIT \"H\" \n \nMortality rates were based on the RP-2000 Combined Mortality Table for Males or Females, as appropriate, with adjustments for mortality improvements based on Scale BB as follows: \n For ERS, JRS and LRS members: The RP-2000 Combined Mortality Table projected to 2025 \nwith projection scale BB and set forward 2 years or both males and females is used for the period after service retirement and for dependent beneficiaries. The RP-2000 Disabled Mortality Table projected to 2025 with projection scale BB and set back 7 years for males and set forward 3 years for females is used for the period after disability retirement. \n For TRS members: The RP-2000 White Collar Mortality Table projected to 2025 with \nprojection scale BB (set forward 1 year for males) is used for death after service retirement and beneficiaries. The RP-2000 Disabled Mortality Table projected to 2025 with projection scale BB (set forward two years for males and four years for females) is used for death after disability retirement. \n For PSERS members: The RP-2000 Blue-Collar Mortality Table projected to 2025 with \nprojection scale BB (set forward 3 years for males and 2 years for females) is used for the period after service retirement and for beneficiaries of deceased members. The RP-2000 Disabled Mortality Table projected to 2025 with projection scale BB (set forward 5 years for both males and females) is used for the period after disability retirement. \n \nThe actuarial assumptions used in the June 30, 2016 valuation were based on the results of an actuarial experience study for the pension systems, which covered the five-year period ending June 30, 2014. \n \nProjection of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculation. \n \nAdditionally, there was a change of assumptions that affected measurement of the total OPEB liability since the prior measurement date. The methodology used to determine employee and retiree participation in the School OPEB Fund is based on their current or last employer payroll location. Current and former employees of public school districts, libraries, regional educational service agencies and community colleges are allocated to the School OPEB Fund irrespective of retirement system affiliation. In addition, the discount rate increased from 3.07% to 3.58%. \nThe long-term expected rate of return on OPEB plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected nominal returns, net of investment expense and the assumed rate of inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: \n \nAsset Class \n \nTarget Allocation \n \nLong-Term Expected Real Rate of Return * \n \nLocal Government Investment Pool \n \n100.00% \n \n1.13% \n \n* Rate shown is net of the 2.75% assumed rate of inflation. \nDiscount rate: In order to measure the total OPEB liability for the School OPEB Fund, a single equivalent interest rate of 3.58% was used as the discount rate. This is comprised mainly of the yield or index rate for 20 year tax-exempt general obligation municipal bonds with an average rating of AA or higher (3.56% per the Bond Buyers Index). The projection of cash flows used to determine \n- 26 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2018 \n \nEXHIBIT \"H\" \n \nthe discount rate assumed that contributions from members and from the employer will be made at the current level as averaged over the last five years, adjusted for annual projected changes in headcount. Projected future benefit payments for all current plan members were projected through 2115. Based on these assumptions, the OPEB plan's fiduciary net position was projected to be available to make OPEB payments for inactive employees through year 2029. Therefore, the calculated discount rate of 3.58% was applied to all periods of projected benefit payments to determine the total OPEB liability. \nSensitivity of the District's proportionate share of the net OPEB liability to changes in the discount rate: The following presents the School District's proportionate share of the net OPEB liability calculated using the discount rate of 3.58%, as well as what the District's proportionate share of the net OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (2.58%) or 1 percentage-point higher (4.58%) than the current discount rate: \n \n1% Decrease (2.58%) \n \nCurrent Discount Rate (3.58%) \n \n1% Increase (4.58%) \n \nNet OPEB Liability \n \n$ 40,339,788.00 $ \n \n33,975,472.00 $ 28,952,738.00 \n \nSensitivity of the District's proportionate share of the net OPEB liability to changes in the healthcare cost trend rates: The following presents the School District's proportionate share of the net OPEB \nliability, as well as what the District's proportionate share of the net OPEB liability would be if it were \ncalculated using healthcare cost trend rates that are 1-percentage-point lower or 1-percentage-point \nhigher than the current healthcare cost trend rates: \n \n1% Decrease \n \nCurrent Healthcare Cost Trend Rate \n \n1% Increase \n \nNet OPEB Liability \n \n$ 28,161,795.00 $ \n \n33,975,472.00 $ 41,544,870.00 \n \nOPEB plan fiduciary net position: Detailed information about the OPEB plan's fiduciary net position is available in the Comprehensive Annual Financial Report (CAFR) which is publicly available at https://sao.georgia.gov/comprehensive-annual-financial-reports. \nNOTE 12: RETIREMENT PLANS \nThe School District participates in various retirement plans administered by the State of Georgia, as further explained below. \nTEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) \nPlan Description: All teachers of the School District as defined in O.C.G.A 47-3-60 and certain other support personnel as defined by 47-3-63 are provided a pension through the Teachers Retirement System of Georgia (TRS). TRS, a cost-sharing multiple-employer defined benefit pension plan, is administered by the TRS Board of Trustees (TRS Board). Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. The Teachers Retirement System of Georgia issues a publicly available separate financial report that can be obtained at www.trsga.com/publications. \nBenefits Provided: TRS provides service retirement, disability retirement, and death benefits. Normal retirement benefits are determined as 2% of the average of the employee's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. An employee is eligible for normal service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. Ten years of service is required for disability and death benefits eligibility. Disability benefits are based on the employee's creditable \n \n- 27 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2018 \n \nEXHIBIT \"H\" \n \nservice and compensation up to the time of disability. Death benefits equal the amount that would be payable to the employee's beneficiary had the employee retired on the date of death. Death benefits are based on the employee's creditable service and compensation up to the date of death. \nContributions: Per Title 47 of the O.C.G.A., contribution requirements of active employees and participating employers, as actuarially determined, are established and may be amended by the TRS Board. Pursuant to O.C.G.A. 47-3-63, the employer contributions for certain full-time public school support personnel are funded on behalf of the employer by the State of Georgia. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees were required to contribute 6% of their annual pay during fiscal year 2018. The School District's contractually required contribution rate for the year ended June 30, 2018 was 16.81% of annual School District payroll, of which 16.68% of payroll was required from the School District and 0.13% of payroll was required from the State. For the current fiscal year, employer contributions to the pension plan were $3,332,626.00 and $23,957.48 from the School District and the State, respectively. \nEMPLOYEES' RETIREMENT SYSTEM \nPlan description: The Employees' Retirement System of Georgia (ERS) is a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly during the 1949 Legislative Session for the purpose of providing retirement allowances for employees of the State of Georgia and its political subdivisions. ERS is directed by a Board of Trustees. Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. ERS issues a publicly available financial report that can be obtained at www.ers.ga.gov/formspubs/formspubs. \nBenefits provided: The ERS Plan supports three benefit tiers: Old Plan, New Plan, and Georgia State Employees' Pension and Savings Plan (GSEPS). Employees under the old plan started membership prior to July 1, 1982 and are subject to plan provisions in effect prior to July 1, 1982. Members hired on or after July 1, 1982 but prior to January 1, 2009 are new plan members subject to modified plan provisions. Effective January 1, 2009, new state employees and rehired state employees who did not retain membership rights under the Old or New Plans are members of GSEPS. ERS members hired prior to January 1, 2009 also have the option to irrevocably change their membership to GSEPS. \nUnder the old plan, the new plan, and GSEPS, a member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 60 or 30 years of creditable service regardless of age. Additionally, there are some provisions allowing for early retirement after 25 years of creditable service for members under age 60. \nRetirement benefits paid to members are based upon the monthly average of the member's highest 24 consecutive calendar months, multiplied by the number of years of creditable service, multiplied by the applicable benefit factor. Annually, postretirement cost-of-living adjustments may also be made to members' benefits, provided the members were hired prior to July 1, 2009. The normal retirement pension is payable monthly for life; however, options are available for distribution of the member's monthly pension, at reduced rates, to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS. \nContributions: Member contributions under the old plan are 4% of annual compensation, up to $4,200.00, plus 6% of annual compensation in excess of $4,200.00. Under the old plan, the state pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these state contributions are included in the members' accounts for refund purposes and are used in the computation of the members' earnable compensation for the purpose of computing retirement benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation. The School District's required contribution rate for the year ended June 30, 2018 was 24.81% of annual covered payroll for old and new plan members and 21.81% for GSEPS members. The rates include the annual actuarially determined employer contributions rate of 24.69% of annual covered \n- 28 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2018 \n \nEXHIBIT \"H\" \n \npayroll for old and new plan members and 21.69% for GSEPS members, plus a 0.12% adjustment for the HB 751 one-time benefit adjustment of 3% to retired state employees. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employer contributions to the pension plan were $7,342.80 for the current fiscal year. \nPUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM (PSERS) \nPlan description: PSERS is a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly in 1969 for the purpose of providing retirement allowances for public school employees who are not eligible for membership in the Teachers Retirement System of Georgia. The ERS Board of Trustees, plus two additional trustees, administers PSERS. Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. PSERS issues a publicly available financial report that can be obtained at www.ers.ga.gov/formspubs/formspubs. \nBenefits provided: A member may retire and elect to receive normal monthly retirement benefits after completion of ten years of creditable service and attainment of age 65. A member may choose to receive reduced benefits after age 60 and upon completion of ten years of service. \nUpon retirement, the member will receive a monthly benefit of $14.75, multiplied by the number of years of creditable service. Death and disability benefits are also available through PSERS. Additionally, PSERS may make periodic cost-of-living adjustments to the monthly benefits. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contribution, the member forfeits all rights to retirement benefits. \nContributions: The general assembly makes an annual appropriation to cover the employer contribution to PSERS on behalf of local school employees (bus drivers, cafeteria workers, and maintenance staff). The annual employer contribution required by statute is actuarially determined and paid directly to PSERS by the State Treasurer in accordance with O.C.G.A. 47-4-29(a) and 60(b). Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. \nIndividuals who became members prior to July 1, 2012 contribute $4 per month for nine months each fiscal year. Individuals who became members on or after July 1, 2012 contribute $10 per month for nine months each fiscal year. The State of Georgia, although not the employer of PSERS members, is required by statute to make employer contributions actuarially determined and approved and certified by the PSERS Board of Trustees. The current fiscal year contribution was $75,729.00. \nPension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions \nAt June 30, 2018, the School District reported a liability of $30,818,976.00 for its proportionate share of the net pension liability for TRS ($30,801,431.00) and ERS ($17,545.00). \n \n- 29 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2018 \n \nEXHIBIT \"H\" \n \nThe TRS net pension liability reflected a reduction for support provided to the School District by the State of Georgia for certain public school support personnel. The amount recognized by the School District as its proportionate share of the net pension liability, the related State of Georgia support, and the total portion of the net pension liability that was associated with the School District were as follows: \n \nSchool District's proportionate share of the net pension liability \n \n$ 30,801,431.00 \n \nState of Georgia's proportionate share of the net pension liability associated with the School District \n \n353,493.00 \n \nTotal \n \n$ 31,154,924.00 \n \nThe net pension liability for TRS and ERS was measured as of June 30, 2017. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2016. An expected total pension liability as of June 30, 2017 was determined using standard roll-forward techniques. The School District's proportion of the net pension liability was based on contributions to TRS and ERS during the fiscal year ended June 30, 2017. \nAt June 30, 2017, the School District's TRS proportion was 0.165730%, which was a decrease of 0.00896% from its proportion measured as of June 30, 2016. At June 30, 2017, the School District's ERS proportion was 0.000432%, which was no change from its proportion measured as of June 30, 2016. \nAt June 30, 2018, the School District did not have a PSERS liability for a proportionate share of the net pension liability because of a Special Funding Situation with the State of Georgia, which is responsible for the net pension liability of the plan. The amount of the State's proportionate share of the net pension liability associated with the School District is $375,754.00. \nThe PSERS net pension liability was measured as of June 30, 2017. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2016. An expected total pension liability as of June 30, 2017 was determined using standard roll-forward techniques. The State's proportion of the net pension liability associated with the School District was based on actuarially determined contributions paid by the State during the fiscal year ended June 30, 2017. \nFor the year ended June 30, 2018, the School District recognized pension expense of $3,263,946.00 for TRS, $8,767.00 for ERS and $75,729.00 for PSERS and revenue of $35,982.00 for TRS and $75,729.00 for PSERS. The revenue is support provided by the State of Georgia. For TRS the State of Georgia support is provided only for certain support personnel. \n \n- 30 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2018 \n \nEXHIBIT \"H\" \n \nAt June 30, 2018, the School District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: \n \nTRS Deferred Outflows of Resources \n \nDeferred Inflows of Resources \n \nERS \n \nDeferred \n \nDeferred \n \nOutflows of \n \nInflows of \n \nResources \n \nResources \n \nDifferences between expected and actual experience \n \n$ 1,152,163.00 $ 116,241.00 \n \n$ \n \n192.00 $ \n \n- \n \nChanges of assumptions \n \n675,206.00 \n \n- \n \n40.00 \n \n- \n \nNet difference between projected and actual earnings on pension plan investments \n \n- \n \n211,965.00 \n \n- \n \n44.00 \n \nChanges in proportion and differences between School \n \nDistrict contributions and proportionate share of \n \ncontributions \n \n258,853.00 \n \n513,768.00 \n \n11,219.00 \n \n- \n \nSchool District contributions subsequent to the measurement date \n \n3,332,626.40 \n \n- \n \n7,342.80 \n \n- \n \nTotal \n \n$ 5,418,848.40 $ 841,974.00 \n \n$ 18,793.80 $ \n \n44.00 \n \nThe School District contributions subsequent to the measurement date of $3,332,626.40 for TRS and $7,342.80 for ERS are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ended June 30, 2019. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: \n \nYear Ended June 30: \n \nTRS \n \nERS \n \n2019 2020 2021 2022 2023 \n \n$ (309,768.00) $ $ 1,599,837.00 $ $ 767,918.00 $ $ (829,338.00) $ $ 15,599.00 $ \n \n6,806.00 4,902.00 \n197.00 (498.00) \n- \n \nActuarial assumptions: The total pension liability as of June 30, 2017 was determined by an actuarial valuation as of June 30, 2016, using the following actuarial assumptions, applied to all periods included in the measurement: \n \nTeachers Retirement System: \n \nInflation \n \n2.75% \n \nSalary increases \n \n3.25%  9.00%, average, including inflation \n \nInvestment rate of return \n \n7.50%, net of pension plan investment expense, including inflation \n \nPost-retirement mortality rates were based on the RP-2000 White Collar Mortality Table with future mortality improvement projected to 2025 with the Society of Actuaries' projection scale BB (set forward one year for males) for service requirements and dependent beneficiaries. The RP-2000 Disabled Mortality table with future mortality improvement projected to 2025 with Society of Actuaries' projection scale BB (set forward two years for males and four years for females) was used for the death after disability retirement. Rates of mortality in active service were based on the RP-2000 Employee Mortality Table projected to 2025 with projection scale BB. \n \n- 31 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2018 \n \nEXHIBIT \"H\" \n \nThe actuarial assumptions used in the June 30, 2016 valuation were based on the results of an actuarial experience study for the period July 1, 2009  June 30, 2014. \nEmployees' Retirement System: \n \nInflation \n \n2.75% \n \nSalary increases \n \n3.25% - 7.00%, average, including inflation \n \nInvestment rate of return \n \n7.50%, net of pension plan investment expense, including inflation \n \nPost-retirement mortality rates were based on the RP-2000 Combined Mortality Table with future \nmortality improvement projected to 2025 with the Society of Actuaries' projection scale BB and set \nforward 2 years for both males and females for service retirements and dependent beneficiaries. The RP- 2000 Disabled Mortality Table with future mortality improvement projected to 2025 with \nSociety of Actuaries' projection scale BB and set back 7 years for males and set forward 3 years for \nfemales was used for death after disability retirement. There is a margin for future mortality \nimprovement in the tables used by the System. Based on the results of the most recent experience \nstudy adopted by the Board on December 17, 2015, the numbers of expected future deaths are 9-12% less than the actual number of deaths that occurred during the study period for service \nretirements and beneficiaries and for disability retirements. Rates of mortality in active service were based on the RP-2000 Employee Mortality Table projected to 2025 with projection scale BB. \n \nThe actuarial assumptions used in the June 30, 2016 valuation were based on the results of an actuarial experience study for the period July 1, 2009  June 30, 2014. \nPublic School Employees Retirement System: \n \nInflation \n \n2.75% \n \nSalary increases \n \nN/A \n \nInvestment rate of return \n \n7.50%, net of pension plan investment expense, including inflation \n \nPost-retirement mortality rates were based on the RP-2000 Blue-Collar Mortality Table projected to 2025 with projection scale BB (set forward 3 years for males and 2 years for females) for the period after service retirements and for dependent beneficiaries. The RP-2000 Disabled Mortality projected to 2025 with projection scale BB (set forward 5 years for both males and females) was used for death after disability retirement. There is a margin for future mortality improvement in the tables used by the System. Based on the results of the most recent experience study adopted by the Board on December 17, 2015, the numbers of expected future deaths are 9-11% less than the actual number of deaths that occurred during the study period for healthy retirees and 9-11% less than expected under the selected table for disabled retirees. Rates of mortality in active service were based on the RP-2000 Employee Mortality Table projected to 2025 with projection scale BB. \nThe actuarial assumptions used in the June 30, 2016 valuation were based on the results of an actuarial experience study for the period July 1, 2009  June 30, 2014. \n \n- 32 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2018 \n \nEXHIBIT \"H\" \n \nThe long-term expected rate of return on TRS, ERS and PSERS pension plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target asset allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: \n \nAsset class \nFixed income Domestic large stocks Domestic mid stocks Domestic small stocks International developed market stocks International emerging market stocks Alternative \nTotal \n* Rates shown are net of the 2.75% assumed rate of inflation \n \nTRS Target allocation \n30.00% 39.80% \n3.70% 1.50% 19.40% 5.60% \n- \n100.00% \n \nERS/PSERS Target \nallocation \n30.00% 37.20% \n3.40% 1.40% 17.80% 5.20% 5.00% \n100.00% \n \nLong-term expected real rate of return* \n(0.50)% 9.00% 12.00% 13.50% 8.00% 12.00% 10.50% \n \nDiscount rate: The discount rate used to measure the total TRS, ERS and PSERS pension liability was 7.50%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and nonemployer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the TRS, ERS and PSERS pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. \nSensitivity of the School District's proportionate share of the net pension liability to changes in the discount rate: The following presents the School District's proportionate share of the net pension liability calculated using the discount rate of 7.50%, as well as what the School District's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.50%) or 1-percentage-point higher (8.50%) than the current rate: \n \nTeachers Retirement System: \nSchool District's proportionate share of the net pension liability \n \n1% Decrease (6.50%) \n \nCurrent Discount Rate (7.50%) \n \n1% Increase (8.50%) \n \n$ 50,548,762.00 $ \n \n30,801,431.00 $ 14,534,069.00 \n \nEmployees' Retirement System: \nSchool District's proportionate share of the net pension liability \n \n1% Decrease (6.50%) \n \nCurrent Discount Rate (7.50%) \n \n1% Increase (8.50%) \n \n$ \n \n24,764.00 $ \n \n17,545.00 $ \n \n11,387.00 \n \nPension plan fiduciary net position: Detailed information about the pension plan's fiduciary net position is available in the separately issued TRS, ERS and PSERS financial report which is publically available at www.trsga.com/publications and http://www.ers.ga.gov/formspubs/formspubs.html. \n- 33 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2018 \n \nEXHIBIT \"H\" \n \nDEFINED CONTRIBUTION PLAN \nThe Franklin County Board of Education participates in an employer paid 403(b) annuity plan for the group of employees covered under the Public School Employees Retirement System (PSERS). Recognizing that PSERS was a limited defined contribution and defined benefit plan which did not provide for an adequate retirement for this group of employees, it was the Board's desire to supplement the retirement of this group. \n \nThe School District selected Lincoln as the provider of this plan. For each employee covered under PSERS, the Board contributes to the plan an amount equal to the amount contributed by the employee not to exceed $25.00 per employee per month. \n \nThe employee becomes vested in the plan with 5 years of experience. Employees who had already achieved 5 years of experience at the time the plan was implemented were vested upon enrollment. \n \nFunds accumulated in the employer paid accounts are only available to the employee upon termination of employment and 5 years of service to Franklin County Board of Education. If an employee terminates employment prior to 5 years of service, funds paid on behalf of the non-vested employee are credited back to the School District. \n \nEmployer contribution for the current fiscal year and the preceding two fiscal years are as follows: \n \nFiscal Year \n \nPercentage Contributed \n \nRequired Contribution \n \n2018 2017 2016 \n \n100% \n \n$ \n \n100% \n \n$ \n \n100% \n \n$ \n \n12,100.00 13,025.00 14,285.00 \n \nNOTE 13: RESTATEMENT OF PRIOR YEAR NET POSITION \n \nFor fiscal year 2018, the School District made prior period adjustments due to the adoption of GASB Statement No. 75, as described in \"New Accounting Pronouncements\", which require the restatement of the June 30, 2017, net position in Governmental Activities. The result is a decrease in net position at July 1, 2017 of $34,319,085.00. This change is in accordance with generally accepted accounting procedures. \n \nNet Position, July 1, 2017 as previously reported \n \n$ 43,981,125.58 \n \nPrior Period Adjustment - Implementation of GASB No. 75: Net OPEB Liability (measurement date) \n \n(35,579,950.00) \n \nDeferred Outflows - School District's Contributions made during fiscal year 2017 \n \n1,260,865.00 \n \nNet Position, July 1, 2017, as restated \n \n$ \n \n9,662,040.58 \n \nNOTE 14: TAX ABATEMENTS \nThe School District property tax revenues were reduced by $10,595.57 under an agreement entered into by the Franklin County Industrial Business Authority with Ross Controls, Inc. starting on May 1, 2017 for a ten-year period. The purpose of this property tax abatement agreement is to provide an incentive for Ross Controls, Inc. to expand their plant instead of relocating to another jurisdiction. \n \n- 34 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2018 \n \nEXHIBIT \"H\" \n \nNOTE 15: SPECIAL ITEMS \nIn April 2017, a hail storm damaged the Central Office roof at 280 Busha Road in Carnesville. Insurance reimbursement of $540,661.64 was received for the cost of the damages. \n \n- 35 - \n \n (This page left intentionally blank) \n \n FRANKLIN COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY TEACHERS RETIREMENT SYSTEM OF GEORGIA \nFOR THE YEAR ENDED JUNE 30 \n \nSCHEDULE \"1\" \n \nYear Ended \n \nSchool District's proportion of the net pension liability \n \nSchool District's proportionate share of the net pension \nliability \n \nState of Georgia's proportionate share of the net pension liability \nassociated with the School District \n \nTotal \n \nSchool District's covered payroll \n \nSchool District's proportionate share of the net pension liability as a percentage of its \ncovered payroll \n \nPlan fiduciary net position as a \npercentage of the total pension liability \n \n2018 2017 2016 2015 \n \n0.165730% $ 30,801,431.00 $ 0.166626% $ 34,376,802.00 $ 0.168496% $ 25,651,843.00 $ 0.164905% $ 20,833,572.00 $ \n \n353,493.00 527,744.00 413,180.00 331,129.00 \n \n$ 31,154,924.00 $ 34,904,546.00 $ 26,065,023.00 $ 21,164,701.00 \n \n$ 19,253,341.53 $ 18,595,862.11 $ 18,071,345.00 $ 17,091,045.00 \n \n159.98% 184.86% 141.95% 121.90% \n \n79.33% 76.06% 81.44% 84.03% \n \nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \n \n- 37 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \nFOR THE YEAR ENDED JUNE 30 \n \nSCHEDULE \"2\" \n \nYear Ended 2018 \n \nSchool District's proportion of the net pension liability \n \nSchool District's proportionate share of the net pension \nliability \n \nSchool District's covered payroll \n \n0.000432% $ \n \n17,545.00 $ \n \n8,831.12 \n \nSchool District's proportionate share of the net pension liability \nas a percentage of covered payroll \n \nPlan fiduciary net position as a \npercentage of total net pension liability \n \n198.67% \n \n76.33% \n \nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \n \n- 38 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY PUBLIC SCHOOLS EMPLOYEES RETIREMENT SYSTEM OF GEORGIA \nFOR THE YEAR ENDED JUNE 30 \n \nSCHEDULE \"3\" \n \nYear Ended \n2018 2017 2016 \n \nSchool District's proportion of the \nnet pension liability \n \nSchool District's proportionate share of the net pension liability \n \n0.00% $ \n \n- \n \n0.00% $ \n \n- \n \n0.00% $ \n \n- \n \nState of Georgia's proportionate share of the net pension liability \nassociated with the School District \n \n$ \n \n375,754.00 $ \n \n$ \n \n486,621.00 $ \n \n$ \n \n291,284.00 $ \n \nTotal \n375,754.00 486,621.00 291,284.00 \n \nSchool District's covered payroll \n \n$ \n \n691,390.07 \n \n$ 1,177,357.03 \n \n$ 1,146,939.61 \n \nSchool District's proportionate share of the net pension \nliability as a percentage of its covered payroll \n \nPlan fiduciary net position as a \npercentage of the total pension liability \n \nN/A \n \n85.69% \n \nN/A \n \n81.00% \n \nN/A \n \n87.00% \n \nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \n \n- 39 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET OPEB LIABILITY \nSCHOOL OPEB FUND FOR THE YEAR ENDED JUNE 30 \n \nSCHEDULE \"4\" \n \nYear Ended 2018 \n \nSchool District's proportion of the net OPEB liability \n \nSchool District's proportionate share \nof the net OPEB liability (asset) \n \nState of Georgia's proportionate share of the net OPEB liability \nassociated with the School District \n \n0.241819% $ 33,975,472.00 $ \n \n- \n \nTotal \n \nSchool District's covered-employee \npayroll \n \nSchool District's proportionate share of the net OPEB liability as \na percentage of its covered-employee \npayroll \n \nPlan fiduciary net position as a \npercentage of the total OPEB liability \n \n$ 33,975,472.00 $ 18,518,343.50 \n \n183.47% \n \n1.61% \n \nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \n \n- 40 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION \nSCHEDULE OF CONTRIBUTIONS TEACHERS RETIREMENT SYSTEM OF GEORGIA \nFOR THE YEAR ENDED JUNE 30 \n \nSCHEDULE \"5\" \n \nYear Ended \n \nContractually required contribution \n \nContributions in relation to the contractually required \ncontribution \n \nContribution deficiency (excess) \n \nSchool District's covered payroll \n \nContribution as a percentage of covered \npayroll \n \n2018 \n \n$ \n \n2017 \n \n$ \n \n2016 \n \n$ \n \n2015 \n \n$ \n \n3,332,626.00 $ 2,715,973.35 $ 2,613,592.63 $ 2,338,991.09 $ \n \n3,332,626.00 $ 2,715,973.35 $ 2,613,592.63 $ 2,338,991.09 $ \n \n- \n \n$ 19,978,659.21 \n \n- \n \n$ 19,253,341.53 \n \n- \n \n$ 18,595,862.11 \n \n- \n \n$ 18,071,345.00 \n \n16.68% 14.11% 14.05% 12.94% \n \nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \n \n- 41 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION \nSCHEDULE OF CONTRIBUTIONS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \nFOR THE YEAR ENDED JUNE 30 \n \nSCHEDULE \"6\" \n \nYear Ended \n \nContractually required contribution \n \nContributions in relation to the contractually required \ncontribution \n \nContribution deficiency (excess) \n \n2018 \n \n$ \n \n7,342.80 $ \n \n7,342.80 $ \n \n- \n \n2017 \n \n$ \n \n2,191.00 $ \n \n2,191.00 $ \n \n- \n \nSchool District's covered payroll \n \n$ \n \n29,595.96 \n \n$ \n \n8,831.12 \n \nContribution as a percentage of covered \npayroll \n24.81% 24.81% \n \nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \n \n- 42 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION \nSCHEDULE OF CONTRIBUTIONS SCHOOL OPEB FUND \nFOR THE YEAR ENDED JUNE 30 \n \nSCHEDULE \"7\" \n \nYear Ended \n \nContractually required contribution \n \nContributions in relation to the contractually required \ncontribution \n \nContribution deficiency (excess) \n \nSchool District's covered-employee \npayroll \n \nContribution as a percentage of covered- \nemployee payroll \n \n2018 2017 \n \n$ \n \n1,261,210.00 $ \n \n$ \n \n1,260,865.00 $ \n \n1,261,210.00 $ 1,260,865.00 $ \n \n- \n \n$ 19,910,823.89 \n \n- \n \n$ 18,518,343.50 \n \n6.33% 6.81% \n \nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \n \n- 43 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION \nFOR THE YEAR ENDED JUNE 30, 2018 \n \nSCHEDULE \"8\" \n \nTeachers Retirement System \nChanges of assumptions: In 2010 and later, the expectation of retired life mortality was changed to the RP2000 Mortality Tables rather than the 1994 Group Annuity Mortality Table, which was used prior to 2010. In 2010, rates of withdrawal, retirement, disability and mortality were adjusted to more closely reflect actual experience. In 2010, assumed rates of salary increase were adjusted to more closely reflect actual and anticipated experience. \nOn November 18, 2015, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System. Primary among the changes were the updates to rates of mortality, retirement, disability, withdrawal and salary increases. The expectation of retired life mortality was changed to RP2000 White Collar Mortality Table with future mortality improvement projected to 2025 with the Society of Actuaries' projection scale BB (set forward one year for males). \nEmployees' Retirement System \nChanges of assumptions: On December 17, 2015, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System. Primary among the changes were the updates to rates of mortality, retirement, disability, withdrawal and salary increases. \nPublic School Employees Retirement System \nChanges of assumptions: In 2010 and later, the expectation of retired life mortality was changed to the RP2000 Mortality Tables rather than the 1994 Group Annuity Mortality Table, which was used prior to 2010. In 2010, rates of withdrawal, retirement, disability and mortality were adjusted to more closely reflect actual experience. \nOn December 17, 2015, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System. Primary among the changes were the updates to rates of mortality, retirement and withdrawal. The expectation of retired life mortality was changed to the RP2000 Blue Collar Mortality Table projected to 2025 with projection scale BB (set forward 3 years for males and 2 years for females). \nSchool OPEB Fund \nChanges of benefit terms: In June 30, 2010 actuarial valuation, there was a change of benefit terms to require Medicare-eligible recipients to enroll in a Medicare Advantage plan to receive the State subsidy. \nChanges in assumptions: In the revised June 30, 2017 actuarial valuation, there was a change relating to employee allocation. Employees were previously allocated based on their Retirement System membership, and currently employees are allocated based on their current employer payroll location. Additionally, there were changes to the discount rate and an increase in the investment rate of return due to a longer-term investment strategy. \nIn the June 30, 2015 actuarial valuation, decremental and underlying inflation assumptions were changed to reflect the Retirement Systems' experience studies. \nIn the June 30, 2012 actuarial valuation, a data audit was performed and data collection procedures and assumptions were changed. \n \n- 44 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION GENERAL FUND \nSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL \nYEAR ENDED JUNE 30, 2018 \n \nSCHEDULE \"9\" \n \nREVENUES \nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous \nTotal Revenues \nEXPENDITURES \nCurrent 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 Food Services Operation \nTotal Expenditures \nExcess of Revenues over (under) Expenditures \nOTHER FINANCING SOURCES \nOther Sources \nNet Change in Fund Balances \nFund Balances - Beginning \nAdjustments \nFund Balances - Ending \n \nNONAPPROPRIATED BUDGETS \n \nORIGINAL (1) \n \nFINAL (1) \n \nACTUAL AMOUNTS \n \nVARIANCE OVER/UNDER \n \n$ \n \n10,043,060.00 $ \n \n- \n \n23,971,880.00 \n \n4,251,468.40 \n \n520,450.00 \n \n17,000.00 \n \n40,000.00 \n \n38,843,858.40 \n \n10,043,060.00 $ - \n23,985,715.00 4,191,833.40 520,450.00 17,000.00 40,000.00 \n38,798,058.40 \n \n10,627,791.93 $ 221,782.67 \n24,358,076.16 3,554,602.64 518,598.94 7,343.37 1,147,686.35 \n40,435,882.06 \n \n584,731.93 221,782.67 372,361.16 (637,230.76) \n(1,851.06) (9,656.63) 1,107,686.35 \n1,637,823.66 \n \n24,900,199.73 \n1,894,701.48 2,307,808.72 \n578,370.64 578,175.24 2,265,386.17 369,249.17 2,327,336.74 2,372,453.54 \n3,000.00 326,000.00 \n1,741,353.46 \n39,664,034.89 \n(820,176.49) \n \n25,311,738.57 \n1,899,722.05 2,146,278.99 \n578,370.64 517,705.13 2,265,386.17 369,249.17 2,327,336.74 2,353,184.54 \n316,000.00 \n1,741,353.46 \n39,826,325.46 \n(1,028,267.06) \n \n24,215,537.17 \n1,507,293.82 1,699,722.20 \n686,137.06 553,794.47 2,396,210.55 340,541.14 2,311,055.13 2,639,654.29 \n313,897.90 552,064.15 1,712,310.77 \n38,928,218.65 \n1,507,663.41 \n \n1,096,201.40 \n392,428.23 446,556.79 (107,766.42) (36,089.34) (130,824.38) \n28,708.03 16,281.61 (286,469.75) \n2,102.10 (552,064.15) 29,042.69 \n898,106.81 \n2,535,930.47 \n \n103,000.00 (717,176.49) 2,766,276.98 \n17,130.21 \n \n103,000.00 (925,267.06) 2,766,276.98 \n17,130.21 \n \n1,507,663.41 5,988,675.19 \n- \n \n(103,000.00) 2,432,930.47 3,222,398.21 \n(17,130.21) \n \n$ \n \n2,066,230.70 $ \n \n1,858,140.13 $ \n \n7,496,338.60 $ \n \n5,638,198.47 \n \nNotes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual \n(1) Original and Final Budget amounts do not include the budgeted revenues or expenditures of the various principal accounts. The actual revenues and expenditures of the various principal accounts are $1,021,230.90 and $941,687.46, respectively. \nThe accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements. \n \nSee notes to the basic financial statements. \n \n- 45 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \nYEAR ENDED JUNE 30, 2018 \n \nSCHEDULE \"10\" \n \nFUNDING AGENCY PROGRAM/GRANT \nAgriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program \nTotal U. S. Department of Agriculture \nEducation, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Special Education Grants to States Grants to States Preschool Grants Preschool Grants \nTotal Special Education Cluster \nOther Programs Pass-Through From Georgia Department of Education Career and Technical Education - Basic Grants to States English Language Acquisition State Grants English Language Acquisition State Grants Migrant Education - State Grant Program Migrant Education - State Grant Program Rural Education Striving Readers Student Support and Academic Enrichment Program Supporting Effective Instruction State Grants Supporting Effective Instruction State Grants Title I Grants to Local Educational Agencies Title I Grants to Local Educational Agencies \nTotal Other Programs \nTotal U. S. Department of Education \n \nCFDA NUMBER \n \nPASSTHROUGH \nENTITY ID \nNUMBER \n \nEXPENDITURES IN PERIOD \n \n10.553 10.555 \n \n18185GA324N1099 $ 18185GA324N1100 \n \n310,796.14 1,326,224.37 \n1,637,020.51 \n \n84.027 84.027 84.173 84.173 \n \nH027A160073 H027A170073 H173A160081 H173A170081 \n \n84.048 84.365 84.365 84.011 84.011 84.358 84.371 84.424A 84.367 84.367 84.010 84.010 \n \nV048A170010 S365A160010 S365A170010 S011A160011 S011A170011 S358B160010 S371C110049 S424A170011 S367A160001 S367A170001 S010A160010 S010A170010 \n \n244,906.79 462,646.08 \n13,984.18 24,428.25 \n745,965.30 \n31,953.96 7,299.00 5,208.27 9,813.67 \n23,909.28 16,882.56 40,456.21 22,023.44 \n1,129.00 100,077.22 \n46,653.00 931,611.48 \n1,237,017.09 \n1,982,982.39 \n \nTotal Expenditures of Federal Awards \n \n$ \n \n3,620,002.90 \n \nNotes to the Schedule of Expenditures of Federal Awards \nNote 1. Basis of Presentation \nThe accompanying schedule of expenditures of federal awards (the \"Schedule\") includes the federal award activity of the Franklin County Board of Education (the \"Board\") under programs of the federal government for the year ended June 30, 2018. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Board, it is not intended to and does not present the financial position or changes in net position of the Board. \nNote 2. Summary of Significant Accounting Policies \nExpenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Board has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. \n \nSee notes to the basic financial statements. \n \n- 46 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2018 \nAGENCY/FUNDING \nGRANTS 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 Elementary Grades (4-5) Program Upper Elementary Grades - Early Intervention (4-5) Program Middle Grades (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program 20 Days Additional Instruction Staff and Professional Development Principal Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Mid-term Adjustment Hold-Harmless Amended Formula Adjustment Categorical Grants Pupil Transportation Regular Nursing Services Education Equalization Funding Grant Vocational Supervisors Other State Programs Food Services Math and Science Supplements Preschool Disability Services Pupil Transportation - State Bonds Teacher of the Year Teachers Retirement Vocational Education \nOffice of the State Treasurer Public School Employees Retirement \nCONTRACT Human Resources, Georgia Department of Family Connection \n \nSCHEDULE \"11\" \n \nGOVERNMENTAL FUND TYPE GENERAL FUND \n \n$ \n \n875,749.00 \n \n630,702.00 \n \n2,323,082.00 \n \n1,301,335.00 \n \n1,114,577.00 \n \n824,104.00 \n \n2,532,269.00 \n \n1,937,097.00 \n \n725,796.00 \n \n3,613,159.00 \n \n589,039.00 \n \n822,845.00 \n \n175,975.00 \n \n180,412.00 \n \n448,477.00 \n \n137,100.00 \n \n77,047.00 \n \n1,615.00 \n \n634,580.00 947,842.00 968,706.00 \n33,136.00 (343,157.00) \n \n638,151.00 75,367.00 \n2,579,180.00 16,502.00 \n43,350.00 14,926.55 106,667.84 77,319.58 \n507.25 23,957.48 117,979.64 \n \n65,598.00 \n \n47,082.82 \n \n$ 24,358,076.16 \n \nSee notes to the basic financial statements. \n \n- 47 - \n \n (This page left intentionally blank) \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \nYEAR ENDED JUNE 30, 2018 \n \nSCHEDULE \"12\" \n \nPROJECT (SPLOST IV) \ni) Acquiring, constructing and equipping replacement school building at Franklin County High School; \nii) adding to, renovating, repairing, improving, acquiring and equipping school buildings and school system facilities; \niii) acquiring miscellaneous new equipment, fixtures and furnishings for the school system, including computer technology equipment, computer software, school buses and other vehicles, transportation and maintenance equipment, and security and safety equipment; \niv) acquiring land or improving land for new or existing schools; \nv) acquiring textbooks, e-books, and e-book readers for the school system; \nvi) paying a portion of the payments, including principal and interest, due on the School District's Series 2006 and 2007 Bonds with a maximum payment amount of $1,700,000.00 with the maximum cost of the projects described in items (i)-(vi) payable from said tax being $20,000,000.00. \nPROJECT (SPLOST V) \ni) Constructing, renovating, and equipping a Career Technical and Agricultural Education (\"CTAE\") career academy on the Franklin County High School campus and constructing and equipping additions to Carnesville Elementary School Intermediate campus; \nii) adding to, renovating, repairing, improving, acquiring and equipping school buildings and school system facilities; \niii) acquiring miscellaneous new equipment, fixtures and furnishings for the school system, including computer technology equipment, computer software, school buses and other vehicles, transportation and maintenance equipment, and security and safety equipment; \niv) acquiring land or improving land for new or existing schools; \nv) acquiring textbooks, e-books, and e-book readers for the school system; \nvi) paying any general obligation debt of the School District issued in conjunction with the imposition of such sales and use tax. \n \nORIGINAL ESTIMATED \nCOST (1) \n \nCURRENT ESTIMATED COSTS (2) \n \nAMOUNT EXPENDED IN CURRENT YEAR (3) (4) (5) \n \nAMOUNT EXPENDED IN PRIOR YEARS (3) (4) (5) \n \nTOTAL COMPLETION \nCOST \n \nEXCESS PROCEEDS NOT \nEXPENDED \n \nESTIMATED COMPLETION \nDATE \n \n$ 16,300,000.00 $ 15,245,081.84 $ \n \n- $ 15,245,081.84 $ 15,245,081.84 $ \n \n- \n \nCompleted \n \n500,000.00 \n \n2,187,544.69 \n \n544,392.13 \n \n1,643,152.56 \n \n- \n \n- \n \nJune 30, 2019 \n \n1,300,000.00 \n \n3,000,000.00 \n \n557,324.16 \n \n2,431,141.99 \n \n- \n \n100,000.00 \n \n- \n \n- \n \n- \n \n- \n \n400,000.00 \n \n- \n \n- \n \n- \n \n- \n \n- \n \nJune 30, 2019 \n \n- \n \nCompleted \n \n- \n \nCompleted \n \n1,700,000.00 20,300,000.00 \n \n227,097.58 20,659,724.11 \n \n1,101,716.29 \n \n227,097.58 19,546,473.97 \n \n227,097.58 15,472,179.42 \n \n- \n \nCompleted \n \n- \n \n11,000,000.00 \n \n11,000,000.00 \n \n441,904.96 \n \n100,367.11 \n \n- \n \n3,000,000.00 \n \n3,000,000.00 \n \n- \n \n- \n \n- \n \n3,500,000.00 \n \n3,500,000.00 \n \n- \n \n- \n \n- \n \n100,000.00 \n \n100,000.00 \n \n- \n \n- \n \n- \n \n300,000.00 \n \n300,000.00 \n \n- \n \n- \n \n- \n \n100,000.00 \n \n100,000.00 \n \n- \n \n- \n \n- \n \n18,000,000.00 \n \n18,000,000.00 \n \n441,904.96 \n \n100,367.11 \n \n- \n \n- \n \nJune 30, 2023 \n \n- \n \nJune 30, 2023 \n \n- \n \nJune 30, 2023 \n \n- \n \nJune 30, 2023 \n \n- \n \nJune 30, 2023 \n \n- \n \nJune 30, 2023 \n \n- \n \n$ 38,300,000.00 $ 38,659,724.11 $ 1,543,621.25 $ 19,646,841.08 $ 15,472,179.42 $ \n \n- \n \n(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax. \n \n(2) The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion. \n \n(3) The voters of Franklin County approved the imposition of a 1% sales tax to fund the above projects and retire associated debt. Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the projects. \n \n(4) In addition to the expenditures shown above, the School District has incurred interest to provide advance funding for the above projects as follows: \n \nPrior Years \n \n$ 1,835,511.80 \n \nCurrent Year \n \n88,275.00 \n \nTotal \n \n$ 1,923,786.80 \n \n(5) In addition to the expenditures shown above, the School District has incurred interest to provide advance funding for the above projects as follows: \n \nPrior Years \n \n$ \n \n166,446.15 \n \nCurrent Year \n \n81,420.00 \n \nTotal \n \n$ \n \n247,866.15 \n \nSee notes to the basic financial statements. \n \n- 49 - \n \n SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS \n \n Greg S. Griffin \nSTATE AUDITOR \n(404) 656-2174 \n \nDEPARTMENT OF AUDITS AND ACCOUNTS \n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \nAugust 1, 2019 \n \nThe Honorable Brian P. Kemp, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the State Board of Education \nand Superintendent and Members of the Franklin County Board of Education \nINDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED \nIN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS \nWe have audited, in accordance with the 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, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Franklin County Board of Education (School District), as of and for the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise the School District's basic financial statements, and have issued our report thereon dated August 1, 2019. \nInternal Control Over Financial Reporting \nIn planning and performing our audit of the financial statements, we considered the School District's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the School District's internal control. Accordingly, we do not express an opinion on the effectiveness of the School District's internal control. \nA 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. A significant deficiency is a deficiency, or a 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. \nOur consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. \n \n Compliance and Other Matters \nAs part of obtaining reasonable assurance about whether the School District's financial statements are free from 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. \nPurpose of this Report \nThe purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the School District's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the School District's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. \nRespectfully submitted, \nGreg S. Griffin State Auditor \n \n Greg S. Griffin \nSTATE AUDITOR \n(404) 656-2174 \n \nDEPARTMENT OF AUDITS AND ACCOUNTS \n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \nAugust 1, 2019 \n \nThe Honorable Brian P. Kemp, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the State Board of Education \nand Superintendent and Members of the Franklin County Board of Education \nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE \nReport on Compliance for Each Major Federal Program \nWe have audited the Franklin County Board of Education (School District) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2018. The School District's major federal programs are identified in the Summary of Auditor's Results section of the accompanying Schedule of Findings and Questioned Costs. \nManagement's Responsibility \nManagement is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. \nAuditor's Responsibility \nOur responsibility is to express an opinion on compliance for each of the School District's major federal programs based on our audit of the types of compliance requirements referred to above. 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 the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance 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 School District's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. \nWe believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the School District's compliance. \n \n Opinion on Each Major Federal Program \nIn our opinion, the School District complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2018. \nOther Matters \nThe results of our auditing procedures disclosed an instance of noncompliance, which is required to be reported in accordance with the Uniform Guidance and which is described in the accompanying Schedule of Findings and Questioned Costs as item FA 2018-001. Our opinion on each major federal program is not modified with respect to this matter. \nThe School District's response to the noncompliance finding identified in our audit is described in the accompanying Schedule of Findings and Questioned Costs. The School District's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. \nReport on Internal Control over Compliance \nManagement of the School District is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the School District's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, 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 School District's internal control over compliance. \nA 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 compliance 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. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. \nOur 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 material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, we identified a deficiency in internal control over compliance, as described in the accompanying Schedule of Findings and Questioned Costs as item FA 2018-001, that we consider to be a significant deficiency. \n \n The School District's response to the internal control over compliance finding identified in our audit is described in the accompanying Schedule of Findings and Questioned Costs. The School District's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. \nThe purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. \nRespectfully submitted, \nGreg S. Griffin State Auditor \n \n SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS \n \n FRANKLIN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2018 \n \nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \n \nFS-6591-13-01 Control Category: \nInternal Control Impact: Compliance Impact: \n \nInadequate Internal Controls Cash and Cash Equivalents Revenues/Receivables/Receipts Expenditures/Liabilities/Disbursements General ledger Capital Assets Material Weakness None \n \nFinding Status: \n \nPreviously Reported Corrective Action Implemented \n \nFS 2014-001 Control Category: \nInternal Control Impact: Compliance Impact: Finding Status: \n \nInadequate Internal Control Procedures Cash and Cash Equivalents Investments General Ledger Capital Assets Significant Deficiency None \nPreviously Reported Corrective Action Implemented \n \nFS 2015-001 Control Category: \nInternal Control Impact: Compliance Impact: Finding Status: \n \nInadequate Internal Control Procedures Cash and Cash Equivalents Investments Revenues/Receivables/Receipts Employee Compensation General Ledger Capital Assets Accounting System Significant Deficiency None \nPreviously Reported Corrective Action Implemented \n \nFS 2016-001 Control Category: \nInternal Control Impact: Compliance Impact: \nFinding Status: \n \nControl Procedures at the Central Office Cash and Cash Equivalents Capital Assets Significant Deficiency None \nPreviously Reported Corrective Action Implemented \n \n- 1 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2018 \n \nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \n \nFS 2017-001 Control Category: Internal Control Impact: Compliance Impact: \n \nFinancial Reporting Process Financial Reporting Material Weakness None \n \nFinding Status: \n \nPartially Resolved \n \nA third-party consultant will be employed to assist and review in the preparation of the financial statements. This will provide another level of assurance of accuracy and adherence to proper GAAP standards. The changes were put in place June of 2018. \n \nFS-2017-002 Control Category: \nInternal Control Impact: Compliance Impact: \n \nInternal Controls at the Central Office Cash and Cash Equivalents Revenues/Receivables/Receipts Expenditures/Liabilities/Disbursements Capital Assets Material Weakness None \n \nFinding Status: \n \nPartially Resolved \n \nIn the event of long absences by a bookkeeper, timely reconciliation of bank statements at the school level will be achieved by the financial director temporarily completing the reconciliation to prevent long periods between reconciliations. At year end, electronic payment of payroll taxes will be properly recorded as cash payments when the general ledger reflects payment in the preceding month. A schedule of cash by fund and bank will be maintained. The internally pooled cash accounts will be monitored each month to ensure that they net to zero. A separate schedule will be created and maintained to list all accounts receivables by person/project/vendor. The changes were put in place May of 2019. \n \nPRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \n \nFA 2015-001 Compliance Category: Internal Control Impact: Compliance Impact: Federal Award Agency: Pass-Through Entity: CFDA Number and Title: \n \nInadequate Controls over Equipment Equipment and Real Property Management Significant Deficiency Nonmaterial Noncompliance U.S. Department of Agriculture Georgia Department of Education 10.553 and 10.555 Child Nutrition Cluster \n \nFinding Status: \n \nPartially Resolved \n \nThe School Food Director has expanded the description of inventory items to include all required details. Inventory item tags were purchased and applied to all food service inventory. The changes were put in place December of 2018. \n \n- 2 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2018 \n \nPRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \n \nFA 2016-001 Compliance Category: Internal Control Impact: Compliance Impact: Federal Award Agency: Pass-Through Entity: CFDA Number and Title: \n \nControls over Equipment Equipment and Real Property Management Significant Deficiency Nonmaterial Noncompliance U.S. Department of Agriculture Georgia Department of Education 10.553 and 10.555 Child Nutrition Cluster \n \nFinding Status: \n \nPartially Resolved \n \nThe School Food Director has expanded the description parameters of inventory items to include all required details. Inventory item tags were purchased and applied to all food service inventory. The changes were put in place December of 2018. \n \n- 3 - \n \n SECTION IV FINDINGS AND QUESTIONED COSTS \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2018 \n \nI SUMMARY OF AUDITOR'S RESULTS \n \nFinancial Statements \nType of auditor's report issue: Governmental Activities; General Fund; Capital Projects Fund; Debt Service Fund; Aggregate Remaining Fund Information \n \nUnmodified \n \nInternal control over financial reporting:  Material weakness identified?  Significant deficiency identified? \n \nNo None Reported \n \nNoncompliance material to financial statements noted: \n \nNo \n \nFederal Awards \n \nInternal Control over major programs: \n \n Material weakness identified? \n \nNo \n \n Significant deficiency identified? \n \nYes \n \nType of auditor's report issued on compliance for major programs: All major programs \n \nUnmodified \n \nAny audit findings disclosed that are required to be reported in \n \naccordance with 2 CFR 200.516(a)? \n \nNo \n \nIdentification of major programs: CFDA Numbers \n \nName of Federal Program or Cluster \n \n10.553, 10.555 \n \nChild Nutrition Cluster \n \nDollar threshold used to distinguish between Type A and Type B programs: \n \n$750,000.00 \n \nAuditee qualified as low-risk auditee? \n \nNo \n \n- 1 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2018 \n \nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. \n \nIII FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \n \nFA 2018-001 Compliance Requirement: Internal Control Impact: Compliance Impact: Federal Awarding Agency: Pass-Through Entity: CFDA Number and Title: Federal Award Numbers: \nQuestioned Costs: \n \nImprove Controls over Employee Compensation Allowable Costs/Cost Principles Significant Deficiency Nonmaterial Noncompliance U.S. Department of Agriculture Georgia Department of Education Child Nutrition Cluster (CFDA 10.553 and 10.555) 18185GA324N1099 - School Breakfast Program 18185GA324N1100 - National School Lunch Program $448.40 \n \nDescription: The policies and procedures of the School District were insufficient to provide adequate internal controls over the employee compensation process. \n \nCriteria: 2 CFR section 200.430(i) states in part that \"Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity...\" \n \nIn addition, 2 CFR 200.303(a) states in part that the \"non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award... (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards.\" \n \nCondition: A random sample of three employees were selected for testing using a non-statistical sampling approach. These items were reviewed to determine if internal controls were properly functioning and applicable compliance requirements were met. The following deficiencies were noted: \n \n One employee's timesheets for every month in the fiscal year did not support the hours for which the employee was paid and resulted in an overpayment of $448.40. \n One employee's leave records did not support the leave without pay deduction amount calculated by the School District and resulted in an underpayment of $576.93. \n \nQuestioned Cost: Questioned costs of $448.40, with likely questioned costs of $10,392.68, were identified for employee compensation overpayments. \n \n- 2 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2018 III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Cause: In discussing these deficiencies with the School District, they indicated the deficiencies were the result of an inadequacy in the employee compensation process. Changes in hours worked or leave hours were not properly communicated to the appropriate individuals. Effect or Potential Effect: Failure to pay employees of the Child Nutrition Cluster the appropriate amount could result in the expenditure of funds for unallowable purposes. This may also expose the School District to unnecessary financial strains and shortages within the Child Nutrition Cluster fund. Additionally, the School District is not in compliance with the Uniform Guidance and Georgia Department of Education guidance. Recommendation: The School District should evaluate their internal control processes regarding the communication of employee compensation changes between departments to ensure that Child Nutrition Cluster employees are paid appropriately. Furthermore, management should develop and implement a monitoring process to ensure that these procedures are properly implemented. Views of Responsible Officials: We concur with this finding. \n- 3 - \n \n SECTION V MANAGEMENT'S CORRECTIVE ACTION \n \n Chris Forrer \nSuperintendent \n \n\"Preparing Students for the Challenges of Tomorrow,, \n(706) 381-1ss4 \nFu (7061 384-7472 \n \nNo matters were reported. \n \nCORRECTIVE ACTION PLANS _ FEDERAL AWARD FIN DI NGS \n \nFA 2018-001 Compliance Requirement: Internal Control lmpact: Compliance lmpact: Federal Awarding Agency: \nPass-Through Entity: CFDA Number and Title: Federal Award Numbers: \nQuestioned Costs: \n \nlmorove Controls over Emolovee Comoensation Allowable Costs/Cost Principles \nSignificant Deficiency \nNonmaterial Noncomoliance \nU.S. Department of Agriculture \nGeorgia Department of Education child Nutrition ctuster (CFDA 10.553 and 10.555) 18185GA324N1099 - School Breakfast program 18185GA324N1100 - Nationat School Lunch program $448.40 \n \nThe policies and procedures of the School District were insufficient to provide adequate internal \ncontrols over the employee compensation process \n \nCorrective Action Plans: \n \nSchool Food Service Director will begin submitting a Payroll Change Form to the payroll clerk when \n \nthere is any change related to payroll of a food service employee. hours paid and number of hours worked. This will assure that the \npayroll information and employees are paid accurately. \n \nThis will document payroll department \n \nchanges In has correct \n \nEstimated Completion Date: June 2019 \nContact Person: Tom porter Telephone: 7 O63a4-4554 E-mail: tom.porter@franklin.k12.ga.us \n \n280 Busha Road t Carnesville, Ceorgia 3052 I theFr hk(iun,-:ihontsvskndo!!t,,,t,sc,nhd,\",.;)X;,Tilliil.ik?:.i|.,.,,_\",,,,,,,,,nan,arstotus o,han.tLupp,nscont,,nns \n \n "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-be26-bf8-b2017-belec-p-btext","title":"Franklin County Board of Education, Carnesville, Georgia, annual financial report for the fiscal year ended 2017 June 30 (including independent auditor's reports)","collection_id":"dlg_ggpd","collection_title":"Georgia Government Publications","dcterms_contributor":["Georgia. Department of Audits and Accounts, issuing body."],"dcterms_spatial":["United States, Georgia, 32.75042, -83.50018"],"dcterms_creator":["Georgia. Department of Audits and Accounts"],"dc_date":["2019-06-25"],"dcterms_description":["Financial report of the Franklin County Board of Education."],"dc_format":["application/pdf"],"dcterms_identifier":null,"dcterms_language":["eng"],"dcterms_publisher":["Atlanta, Ga. : Georgia. Department of Audits and Accounts"],"dc_relation":null,"dc_right":["http://rightsstatements.org/vocab/InC/1.0/"],"dcterms_is_part_of":null,"dcterms_subject":["Franklin County Board of Education (Ga.)--Appropriations and expenditures--Periodicals","Education--Georgia--Franklin County--Auditing--Periodicals","Education--Georgia--Franklin County--Finance--Statistics--Periodicals"],"dcterms_title":["Franklin County Board of Education, Carnesville, Georgia, annual financial report for the fiscal year ended 2017 June 30 (including independent auditor's reports)"],"dcterms_type":["Text"],"dcterms_provenance":["University of Georgia. Map and Government Information Library"],"edm_is_shown_by":["https://dlg.galileo.usg.edu/do:dlg_ggpd_y-ga-ba800-b-pr1-be26-bf8-b2017-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-be26-bf8-b2017-belec-p-btext"],"dcterms_temporal":null,"dcterms_rights_holder":null,"dcterms_bibliographic_citation":null,"dlg_local_right":null,"dcterms_medium":["annual reports","state government records","audits","financial records","financial statements"],"dcterms_extent":null,"dlg_subject_personal":null,"iiif_manifest_url_ss":null,"dcterms_subject_fast":null,"fulltext":"FRANKLIN COUNTY BOARD OF EDUCATION \nCARNESVILLE, GEORGIA \nANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2017 \n(Including Independent Auditor's Reports) \n \n FRANKLIN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \n \nSECTION I \n \nFINANCIAL \n \nINDEPENDENT AUDITOR'S REPORT \n \nREQUIRED SUPPLEMENTARY INFORMATION \n \nMANAGEMENT'S DISCUSSION AND ANALYSIS \n \nEXHIBITS \n \nBASIC FINANCIAL STATEMENTS \n \nGOVERNMENT-WIDE FINANCIAL STATEMENTS \n \nA \n \nSTATEMENT OF NET POSITION \n \nB \n \nSTATEMENT OF ACTIVITIES \n \nFUND FINANCIAL STATEMENTS \n \nC \n \nBALANCE SHEET \n \nGOVERNMENTAL FUNDS \n \nD \n \nRECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \n \nTO THE STATEMENT OF NET POSITION \n \nE \n \nSTATEMENT OF REVENUES, EXPENDITURES AND CHANGES \n \nIN FUND BALANCES \n \nGOVERNMENTAL FUNDS \n \nF \n \nRECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT \n \nOF REVENUES, EXPENDITURES AND CHANGES IN FUND \n \nBALANCES TO THE STATEMENT OF ACTIVITIES \n \nG \n \nSTATEMENT OF FIDUCIARY NET POSITION \n \nFIDUCIARY FUNDS \n \nH NOTES TO THE BASIC FINANCIAL STATEMENTS \n \nSCHEDULES \n \nREQUIRED SUPPLEMENTARY INFORMATION \n \n1 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY TEACHERS RETIREMENT SYSTEM OF GEORGIA \n2 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA \n3 SCHEDULE OF CONTRIBUTIONS  TEACHERS RETIREMENT SYSTEM OF GEORGIA 4 NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION 5 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES \nIN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND \n \nPage \ni \n1 2 \n4 5 6 7 8 9 \n29 30 31 32 33 \n \n FRANKLIN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \n \nSECTION I \nFINANCIAL \nSCHEDULES \nSUPPLEMENTARY INFORMATION \n6 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 7 SCHEDULE OF STATE REVENUE 8 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \n \nPage \n34 35 37 \n \nSECTION II \nCOMPLIANCE AND INTERNAL CONTROL REPORTS \nINDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS \nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE \n \nSECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS \n \nSECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS \n \nSECTION V MANAGEMENT'S CORRECTIVE ACTION FOR CURRENT YEAR FINDINGS SCHEDULE OF MANAGEMENT'S CORRECTIVE ACTION \n \n SECTION I FINANCIAL \n \n GREG S. GRIFFIN \nSTATE AUDITOR \n(404) 656-2174 \n \nDEPARTMENT OF AUDITS AND ACCOUNTS \n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \nJune 25, 2019 \n \nThe Honorable Brian P. Kemp, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the State Board of Education \nand Superintendent and Members of the Franklin County Board of Education \nINDEPENDENT AUDITOR'S REPORT \nReport on the Financial Statements \nWe have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Franklin County Board of Education (School District), as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the School District's basic financial statements as listed in the table of contents. \nManagement's Responsibility for the Financial Statements \nManagement is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. \nAuditor's Responsibility \nOur 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 Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. \nAn audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also \n \n includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. \nWe believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. \nOpinions \nIn our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the of the governmental activities, each major fund, and the aggregate remaining fund information of the School District as of June 30, 2017, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. \nEmphasis of Matter \nAs described in Note 2 to the financial statements, in 2017, the School District adopted new accounting guidance, Governmental Accounting Standards Board (GASB) Statement No. 77, Tax Abatement Disclosures, GASB Statement No. 80, Blending Requirements for Certain Component Units, and GASB Statement No. 82, Pension Issues. Our opinions are not modified with respect to these matters. \nOther Matters \nRequired Supplementary Information \nAccounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis, Schedules of Proportionate Share of the Net Pension Liability, Schedule of Contributions to Retirement Systems, Notes to the Required Supplementary Information and the Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual as presented on pages i through viii, and pages 29 through 33 respectively, 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 our 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. \nOther Information \nOur audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the School District's basic financial statements. The accompanying supplementary information, as listed in the table of contents, is presented for the purposes of additional analysis and is not a required part of the basic financial statements. The Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by Title 2 U. S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is also not a required part of the basic financial statements. \n \n The accompanying supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic 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 basic financial statements taken as a whole. \nOther Reporting Required by Government Auditing Standards \nIn accordance with Government Auditing Standards, we have also issued our report dated June 25, 2019 on our consideration of the School District'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 solely 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 effectiveness of the School District's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the School District's internal control over financial reporting and compliance. \nA 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. \nRespectfully submitted, \nGreg S. Griffin State Auditor \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2017 \nINTRODUCTION \nThe discussion and analysis of the Franklin County Board of Education's (School District) financial performance provides an overview of the School District's financial activities for the fiscal years ended June 30, 2017 and June 30, 2016. The intent of this discussion and analysis is to look at the School District's financial performance as a whole. Readers should also review the financial statements and the notes to the basic financial statements to enhance their understanding of the School District's financial performance. \nFINANCIAL HIGHLIGHTS \nKey financial highlights for the fiscal years 2017 and 2016 are as follows: \n The School District had $40,404,483 and $35,898,470 million in expenses relating to governmental activities for the fiscal years ended June 30, 2017 and June 30, 2016, respectively. Only $26,372,770 and $23,803,902 of the above mentioned expenses for 2017 and 2016 were offset by program specific charges for services, grants and contributions. General revenues (primarily property and sales taxes) of $16,416,771 and $16,130,737, respectively, for 2017 and 2016, along with fund balance were adequate to provide for these programs. \nOVERVIEW OF THE FINANCIAL STATEMENTS \nThis annual report consists of three parts; management's discussion and analysis (this section), the basic financial statements including the notes to the basic financial statements and supplementary information. The basic financial statements include two levels of statements that present different views of the School District. These include the government-wide and fund financial statements. \nThe government-wide financial statements include the Statement of Net Position and Statement of Activities. These statements provide information about the activities of the School District presenting both short-term and long-term information about the overall financial status. \nThe fund financial statements focus on individual parts, reporting the School District's operation in more detail. The governmental funds statements disclose how basic services are financed in the shortterm as well as what remains for future spending. The fiduciary funds statements provide information about the financial relationships in which the School District acts solely as a trustee or agent for the benefit of others. \nThe fund financial statements reflect the School District's most significant funds. For the years ending June 30, 2017 and 2016, the general fund, the capital projects fund, and the debt service fund represent the most significant funds. \nThe financial statements also include notes that explain some of the information in the statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and supports the financial statements. Additionally, other supplementary information (not required) is also presented that further supplements understanding of the financial statements. \ni \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2017 \nGovernment-Wide Statements \nThe government-wide statements report information about the School District as a whole using accounting methods similar to those used by private-sector companies. The Statement of Net Position includes all of the School District's assets and liabilities. All of the current fiscal year's revenues and expenses are accounted for in the Statement of Activities regardless of when cash is received or paid. \nThe two government-wide statements report the School District's net position and how it has changed. Net position, the difference between the School District's assets and deferred outflows of resources, and liabilities and deferred inflows of resources, are one way to measure the School District's overall financial health or position. Over time, increases or decreases in net position are an indication of whether its financial health is improving or deteriorating. Changes may be the result of many factors, including those not under the School District's control, such as the property tax base, facility conditions, required educational programs and other factors. \nIn the Statement of Net Position and the Statement of Activities, the School District has one distinct type of activity: \n Governmental Activities  All of the School District's programs and services are reported here including instruction, support services, operation and maintenance of plant, pupil transportation, food service, student activity accounts and various others. \nFund Financial Statements \nThe School District's fund financial statements provide detailed information about the most significant funds, not the School District as a whole. Some funds are required by State law and some by bond requirements. The School District's major governmental funds are the general fund, the capital projects fund, and the debt service fund. \nGovernmental Funds - Most of the School District's activities are reported in governmental funds, which focus on the determination of financial position and change in financial position, not on income determination. These funds are reported using the modified accrual method of accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the School District's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance educational programs. The relationship (or differences) between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds are reconciled to the financial statements. \nFiduciary Funds - The School District is the trustee, or fiduciary, for assets that belong to others, such as school clubs and organizations within the principals' accounts. The School District is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. The School District excludes these activities from the governmentwide financial statements because it cannot use these assets to finance its operations. \nii \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2017 \n \nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT AS A WHOLE \nRecall that the Statement of Net Position provides the perspective of the School District as a whole. Table 1 provides a summary of the School District's net position for fiscal years 2017 and 2016. \n \nTable 1 Net Position \n \nGovernmental Activities \n \nFiscal \n \nFiscal \n \nYear 2017 \n \nYear 2016 \n \nAssets Current and Other Assets Capital Assets, Net \n \n$ 14,803,930 $ 13,880,213 \n \n64,122,285 \n \n64,668,621 \n \nTotal Assets \n \n78,926,215 \n \n78,548,834 \n \nDeferred Outflows of Resources \n \n8,844,415 \n \n3,107,768 \n \nTotal Assets and Deferred Outflows of Resouces \n \n87,770,630 \n \n81,656,602 \n \nLiabilities Current and Other Liabilities Long-Term Liabilities \n \n40,433,349 2,595,754 \n \n31,819,326 5,371,508 \n \nTotal Liabilities \n \n43,029,103 \n \n37,190,834 \n \nDeferred Inflows of Resources \n \n760,402 \n \n2,869,701 \n \nTotal Liabilities and Deferred Inflows of Resources \n \n43,789,505 \n \n40,060,535 \n \nNet Position Net Invested in Capital Assets Restricted Unrestricted (Deficit) \n \n63,169,340 2,802,677 \n(21,990,892) \n \n61,458,431 2,508,645 \n(22,371,009) \n \nTotal Net Position \n \n$ 43,981,125 $ 41,596,067 \n \nTotal assets and deferred outflows of resources increased by $6,114,028 which was primarily due to increases in deferred outflows for pension benefits. \n \niii \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2017 \nTable 2 shows the changes in net position for fiscal years ending June 30, 2017 and June 30, 2016. \n \nTable 2 Change in Net Position \n \nRevenues Program Revenues: Charges for Services Operating Grants and Contributions Capital Grants and Contributions \n \nGovernmental Activities \n \nFiscal Year \n \nFiscal Year \n \n2017 \n \n2016 \n \n$ \n \n531,680 $ \n \n463,660 \n \n25,763,874 \n \n23,185,802 \n \n77,216 \n \n154,440 \n \nTotal Program Revenues \n \n26,372,770 \n \n23,803,902 \n \nGeneral Revenues: Taxes Property Taxes For Maintenance and Operations Sales Taxes Special Purpose Local Option Sales Tax For Debt Service Other Taxes Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous \nTotal General Revenues \n \n10,414,500 \n \n10,396,066 \n \n3,156,985 191,501 \n1,504,405 23,366 \n1,126,014 \n16,416,771 \n \n3,123,869 386,587 \n1,386,907 28,510 \n808,798 \n16,130,737 \n \nTotal Revenues \nProgram Expenses: 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 Operations of Non-Instructional Services Enterprise Operations Food Services Interest on Short-Term and Long-Term Debt \n \n42,789,541 \n25,606,027 \n1,510,365 2,019,750 \n575,775 592,867 2,152,114 214,749 2,255,607 2,731,444 \n178 295,070 \n597,206 1,677,282 \n176,049 \n \n39,934,639 \n22,546,588 \n1,314,576 1,673,651 \n507,992 501,230 2,025,622 318,999 2,189,140 2,483,036 303,986 \n- \n325,845 1,629,811 \n77,994 \n \nTotal Expenses \n \n40,404,483 \n \n35,898,470 \n \nIncrease in Net Position \n \n$ \n \n2,385,058 $ \n \n4,036,169 \n \niv \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2017 \nProgram revenues, in the form of charges for services, operating grants and contributions and capital grants and contributions increased $2,352,781 for governmental activities. This increase is largely due to higher funding from the State Quality Basic Education (QBE) Funding Formula. The main factor within the QBE formula was a sharp decrease of $709,915 in the Austerity Reduction. \nGovernmental Activities \nThe Statement of Activities shows the cost of program services and the charges for services and grants offsetting those services. Table 3 shows the total cost of services and the net cost of services. Net cost of services can be defined as the total cost less fees generated by the activities and intergovernmental revenue provided for specific programs. The net cost reflects the financial burden on the School District's taxpayers by each activity. \nTable 3 Governmental Activities \n \nTotal Cost of Services \n \nFiscal \n \nFiscal \n \nYear 2017 \n \nYear 2016 \n \nNet Cost of Services \n \nFiscal \n \nFiscal \n \nYear 2017 \n \nYear 2016 \n \nInstruction Support Services: \nPupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Operations of Non-Instructional Services: Enterprise Operations Community Services Food Services Interest on Short-Term and Long-Term Debt \n \n$ 25,606,027 $ 22,546,588 $ 6,448,493 $ 5,670,316 \n \n1,510,365 2,019,750 \n575,775 592,867 2,152,114 214,749 2,255,607 2,731,444 \n178 295,070 \n \n1,314,576 1,673,651 \n507,992 501,230 2,025,622 318,999 2,189,140 2,483,036 303,986 \n- \n \n1,145,980 1,283,502 \n81,344 (111,419) 1,089,109 206,080 1,116,219 1,894,573 \n18 248,002 \n \n1,033,480 864,243 28,044 (125,937) 980,882 316,763 \n1,086,005 1,644,411 \n235,217 - \n \n597,206 - \n1,677,282 176,049 \n \n325,845 - \n1,629,811 77,994 \n \n443,525 (1,212) 11,449 \n176,049 \n \n196,899 - \n86,250 77,994 \n \nTotal Expenses \n \n$ 40,404,483 $ 35,898,470 $ 14,031,712 $ 12,094,567 \n \nAlthough program revenues make up a majority of the funding, the School District is still dependent upon tax revenues for governmental activities. For 2017, 35.31% of instruction and support activities were supplemented by taxes and other general revenues compared to 34.65% in 2016. \n \nv \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2017 \n \nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT'S FUNDS \n \nThe School District's governmental funds are accounted for using the modified accrual basis of accounting. The governmental funds had total revenues and other financing sources of $42,551,517 and total expenses and other financing uses of $41,737,878. There was an increase in the fund balance totaling $813,639 for the governmental funds as a whole. Higher QBE funding was the main contributor to the increase in fund balance. \n \nGeneral Fund Budgeting Highlights \n \nThe School District's budget is prepared according to Georgia Law. The most significant budgeted fund is the general fund, funded primarily through state revenue and local property tax revenue. During the course of fiscal years 2017 and 2016, the School District amended its general fund budget as needed. \n \nDuring fiscal year 2017 the general fund had final actual revenues and other financing sources totaling $39,377,600, which represented an increase from the original budgeted amount of $35,884,054 by $3,493,546. This difference (final actual vs. original budget) was due to larger state revenue received, larger federal grant revenue, state revenue and unbudgeted student activity fees. \n \nCAPITAL ASSETS \n \nAt the fiscal years ended June 30, 2017 and June 30, 2016, the School District had $63,169,340 and $61,458,431, respectively, invested in capital assets, net of accumulated depreciation. These assets are made up of a broad range of capital assets, including land; buildings; transportation, food service and maintenance equipment. Table 4 reflects a summary of these balances, by class, net of accumulated depreciation. \nTable 4 \nCapital Assets \n(Net of Depreciation) \n \nGovernmental Activities \n \nFiscal \n \nFiscal \n \nYear 2017 \n \nYear 2016 \n \nLand Construction In Progress Building and Improvements Equipment Land Improvements Intangible Assets \n \n$ 1,338,157 $ 1,338,157 \n \n323,531 \n \n- \n \n53,180,304 \n \n54,022,795 \n \n2,138,119 \n \n2,172,911 \n \n6,975,098 \n \n7,091,963 \n \n167,077 \n \n42,795 \n \nTotal \n \n$ 64,122,286 $ 64,668,621 \n \nThe overall capital assets decreased in fiscal year 2017 by $546,335 due to few current year additions being added and continuing depreciation of assets. \n \nvi \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2017 \n \nDEBT ADMINISTRATION \n \nAt June 30, 2017, the School District had $2,595,754 in total debt outstanding with $2,595,754 due within one year. Table 5 summarizes bond debt outstanding at June 30, 2017 and 2016. \n \nTable 5 Debt at June 30 \n \nGovernmental Activities \n \nFiscal \n \nFiscal \n \nYear 2017 Year 2016 \n \nGeneral Obligation Bonds Bond Premiums Amortized \n \n$ 2,370,000 $ 4,920,000 \n \n225,754 \n \n451,508 \n \nTotal \n \n$ 2,595,754 $ 5,371,508 \n \nCURRENT ISSUES \nIn fiscal year 2017, the cost of the employer portion of TRS pension will remain the same after several years of increases. There will be an increase of approximately $100,000 in health insurance premiums for non-certified employees. \nApproximately 85% of general fund expenses, the main operating fund for the School District, were related to salaries and employee benefits for the year ended June 30, 2017. More than a third of certified personnel in the School District have 21 years or more of experience resulting in salaries at the highest possible state pay level. With such personnel heavy expenses, it is difficult to offset mandated expense increases such as health insurance premium expenses. The School District consistently evaluates how funds can be spent smarter and more effectively to ensure that County students receive a quality education from effective personnel. \nThe School District's millage rate for fiscal year 2017 was 18.118. This was a 0.500 mill reduction from the previous year. The net digest continues to be relatively flat. The net digest for fiscal year 2017 produced $10,452,000 in revenue \nThe most significant challenge facing the School District is the relative uncertainty regarding how School Districts will be funded moving forward. The General Assembly is in the process of exploring new funding formulas that would likely cement in the austerity reductions received annually and change the way personnel salaries are calculated. Vouchers for private schools and a growing charter school system may reduce funds available for traditional public schools. \nCONTACTING THE SCHOOL DISTRICT'S FINANCIAL MANAGEMENT \nThis financial report is designed to provide our citizens, taxpayers, investors and creditors with a general overview of the School District's finances and to show the School District's accountability for the money it receives. If you have questions about this report or need additional financial information, contact Tom Porter at the Franklin County Board of Education, 280 Busha Road, Carnesville, GA 30521. You may also email your questions to tom.porter@franklin.k12.ga.us. \n \nvii \n \n FRANKLIN COUNTY BOARD OF EDUCATION \n \n FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF NET POSITION JUNE 30, 2017 \nASSETS \nCash and Cash Equivalents Receivables, Net \nTaxes State Government Federal Government Local Other Inventories Prepaid Items Capital Assets, Non-Depreciable Capital Assets, Depreciable (Net of Accumulated Depreciation) \nTotal Assets \nDEFERRED OUTFLOWS OF RESOURCES \nRelated to Defined Benefit Pension Plan \nLIABILITIES \nAccounts Payable Salaries and Benefits Payable Payroll Withholdings Payable Interest Payable Contracts Payable Retainages Payable Net Pension Liability Long-Term Liabilities \nDue Within One Year \nTotal Liabilities \nDEFERRED INFLOWS OF RESOURCES \nRelated to Defined Benefit Pension Plan \nNET POSITION \nNet Investment in Capital Assets Restricted for \nContinuation of Federal Programs Debt Service Capital Projects Unrestricted (Deficit) \nTotal Net Position \n \nEXHIBIT \"A\" \nGOVERNMENTAL ACTIVITIES \n$ 10,418,368.23 673,647.28 \n2,732,912.73 902,096.03 17,888.89 2,386.97 52,846.24 3,783.34 \n1,661,688.50 62,460,597.18 78,926,215.39 \n8,844,415.35 \n1,498,118.77 3,796,689.30 \n458,769.34 29,425.00 \n252,330.85 21,214.00 \n34,376,802.00 2,595,753.90 \n43,029,103.16 \n760,402.00 \n63,169,339.99 405,275.00 \n1,909,137.48 488,264.97 \n(21,990,891.86) \n$ 43,981,125.58 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 1 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES \nFOR THE YEAR ENDED JUNE 30, 2017 \n \nGOVERNMENTAL ACTIVITIES \nInstruction Support Services \nPupil 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 Operations of Non-Instructional Services Enterprise Operations Community Services Food Services Interest on Short-Term and Long-Term Debt \nTotal Governmental Activities \nGeneral Revenues Taxes Property Taxes For Maintenance and Operations Sales Taxes Special Purpose Local Option Sales Tax For Debt Services Other Sales Tax Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous \nTotal General Revenues \nChange in Net Position \nNet Position - Beginning of Year \n \nEXPENSES \n \nCHARGES FOR SERVICES \n \nPROGRAM REVENUES \n \n$ 25,606,027.20 $ \n1,510,365.40 2,019,750.08 \n575,774.65 592,867.49 2,152,113.48 214,749.38 2,255,606.57 2,731,444.03 \n178.00 295,070.31 \n597,205.76 - \n1,677,281.39 176,048.76 \n$ 40,404,482.50 $ \n \n12,000.00 \n9,100.00 34,125.08 - \n153,680.93 1,212.00 \n321,561.69 - \n531,679.70 \n \nNet Position - End of Year \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 2 - \n \n EXHIBIT \"B\" \n \nPROGRAM REVENUES OPERATING GRANTS AND \nCONTRIBUTIONS \n \nCAPITAL GRANTS AND CONTRIBUTIONS \n \nNET (EXPENSES) REVENUES \nAND CHANGES IN NET POSITION \n \n$ 19,145,533.87 $ \n364,385.32 736,248.52 494,430.45 704,286.97 1,063,004.54 \n8,668.86 1,130,287.55 \n725,529.39 159.76 \n47,068.20 \n1,344,270.96 - \n$ 25,763,874.39 $ \n \n- $ \n77,216.25 - \n- \n77,216.25 \n \n(6,448,493.33) \n(1,145,980.08) (1,283,501.56) \n(81,344.20) 111,419.48 (1,089,108.94) (206,080.52) (1,116,219.02) (1,894,573.31) \n(18.24) (248,002.11) \n(443,524.83) 1,212.00 \n(11,448.74) (176,048.76) \n(14,031,712.16) \n \n10,414,499.95 \n3,156,984.76 191,501.07 \n1,504,405.00 23,365.57 \n1,126,014.28 \n16,416,770.63 \n2,385,058.47 \n41,596,067.11 \n \n$ \n \n43,981,125.58 \n \n- 3 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION BALANCE SHEET \nGOVERNMENTAL FUNDS JUNE 30, 2017 \n \nEXHIBIT \"C\" \n \nASSETS \nCash and Cash Equivalents Receivables, Net \nTaxes State Government Federal Government Local Other Inventories Prepaid Items \n \nGENERAL FUND \n \nCAPITAL PROJECTS \nFUND \n \nDEBT SERVICE \nFUND \n \nTOTAL \n \n$ 8,004,748.58 $ \n386,894.63 2,732,912.73 \n902,096.03 17,888.89 2,386.97 52,846.24 3,783.34 \n \n761,809.82 $ 1,651,809.83 $ 10,418,368.23 \n \n- \n \n286,752.65 \n \n673,647.28 \n \n- \n \n- \n \n2,732,912.73 \n \n- \n \n- \n \n902,096.03 \n \n- \n \n- \n \n17,888.89 \n \n- \n \n- \n \n2,386.97 \n \n- \n \n- \n \n52,846.24 \n \n- \n \n- \n \n3,783.34 \n \nTotal Assets \nLIABILITIES \nAccounts Payable Salaries and Benefits Payable Payroll Withholdings Payable Contracts Payable Retainages Payable \nTotal Liabilities \nDEFERRED INFLOWS OF RESOURCES \nUnavailable Revenue - Federal Grants Unavailable Revenue - Property Taxes \nTotal Deferred Inflows of Resources \nFUND BALANCES \nNonspendable Restricted Assigned Unassigned \nTotal Fund Balances \n \n$ 12,103,557.41 $ \n \n761,809.82 $ 1,938,562.48 $ 14,803,929.71 \n \n$ 1,498,118.77 $ 3,796,689.30 458,769.34 - \n5,753,577.41 \n \n- $ 252,330.85 21,214.00 \n273,544.85 \n \n- $ 1,498,118.77 \n \n- \n \n3,796,689.30 \n \n- \n \n458,769.34 \n \n- \n \n252,330.85 \n \n- \n \n21,214.00 \n \n- \n \n6,027,122.26 \n \n216,087.38 \n \n- \n \n145,217.43 \n \n- \n \n361,304.81 \n \n- \n \n- \n \n216,087.38 \n \n- \n \n145,217.43 \n \n- \n \n361,304.81 \n \n56,629.58 352,428.76 406,004.00 5,173,612.85 \n5,988,675.19 \n \n488,264.97 \n- \n488,264.97 \n \n1,938,562.48 \n- \n1,938,562.48 \n \n56,629.58 2,779,256.21 \n406,004.00 5,173,612.85 \n8,415,502.64 \n \nTotal Liabilities, Deferred Inflows of Resources, and Fund Balances \n \n$ 12,103,557.41 $ \n \n761,809.82 $ 1,938,562.48 $ 14,803,929.71 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 4 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \nTO THE STATEMENT OF NET POSITION JUNE 30, 2017 \n \nEXHIBIT \"D\" \n \nTotal fund balances - governmental funds (Exhibit \"C\") \nAmounts reported for governmental activities in the Statement of Net Position are different because: \nCapital assets used in governmental activities are not financial resources and therefore are not reported in the funds. \nLand Construction in progress Buildings and improvements Equipment Land improvements Intangible assets Accumulated depreciation \nSome liabilities are not due and payable in the current period and, therefore, are not reported in the funds. \nNet pension liability \nDeferred outflows and inflows of resources related to pensions are applicable to future periods and, therefore, are not reported in the funds. \nTaxes that are not available to pay for current period expenditures are deferred in the funds. \nGeorgia Department of Education grants that are not available to pay current period expenditures are deferred in the funds. \nLong-term liabilities, and related accrued interest, are not due and payable in the current period and therefore are not reported in the funds. \nBonds payable Accrued interest payable Unamortized bond premiums \n \n$ 8,415,502.64 \n \n$ \n \n1,338,157.39 \n \n323,531.11 \n \n64,407,930.48 \n \n6,465,459.20 \n \n8,330,726.15 \n \n328,682.06 \n \n(17,072,200.71) \n \n64,122,285.68 \n \n(34,376,802.00) 8,084,013.35 145,217.43 216,087.38 \n \n$ (2,370,000.00) (29,425.00) \n(225,753.90) \n \n(2,625,178.90) \n \nNet position of governmental activities (Exhibit \"A\") \n \n$ 43,981,125.58 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 5 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES \nGOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2017 \n \nEXHIBIT \"E\" \n \nREVENUES \nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous \nTotal Revenues \nEXPENDITURES \nCurrent 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 Food Services Operation \nCapital Outlay Debt Services \nPrincipal Dues and Fees Interest \nTotal Expenditures \nNet Change in Fund Balances \nFund Balances - Beginning \nFund Balances - Ending \n \nGENERAL FUND \n \nCAPITAL PROJECTS \nFUND \n \nDEBT SERVICE \nFUND \n \nTOTAL \n \n$ 10,452,074.20 $ 191,501.07 \n22,385,753.76 4,684,143.43 531,679.70 6,433.79 1,126,014.28 \n39,377,600.23 \n \n- $ \n \n- $ 10,452,074.20 \n \n- \n \n3,156,984.76 \n \n3,348,485.83 \n \n- \n \n- \n \n22,385,753.76 \n \n- \n \n- \n \n4,684,143.43 \n \n- \n \n- \n \n531,679.70 \n \n- \n \n16,931.78 \n \n23,365.57 \n \n- \n \n- \n \n1,126,014.28 \n \n- \n \n3,173,916.54 \n \n42,551,516.77 \n \n24,103,884.67 \n1,475,721.07 1,979,296.03 \n561,169.06 576,822.59 2,082,006.27 330,967.26 2,262,442.61 2,500,117.44 \n178.00 295,070.31 597,205.76 1,682,385.80 \n- \n- \n38,447,266.87 \n930,333.36 \n5,058,341.83 \n \n10,869.38 \n18,336.75 492,855.97 \n2,773.76 \n- \n524,835.86 \n(524,835.86) \n1,013,100.83 \n \n- \n- \n2,550,000.00 - \n215,775.00 \n2,765,775.00 \n408,141.54 \n1,530,420.94 \n \n24,114,754.05 \n1,475,721.07 1,979,296.03 \n561,169.06 576,822.59 2,082,006.27 330,967.26 2,262,442.61 2,518,454.19 \n178.00 295,070.31 597,205.76 1,682,385.80 492,855.97 \n2,550,000.00 2,773.76 \n215,775.00 \n41,737,877.73 \n813,639.04 \n7,601,863.60 \n \n$ 5,988,675.19 $ \n \n488,264.97 $ 1,938,562.48 $ 8,415,502.64 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 6 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION RECONILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES \nTO THE STATEMENT OF ACTIVITIES JUNE 30, 2017 \n \nEXHIBIT \"F\" \n \nNet change in fund balances total governmental funds (Exhibit \"E\") \nAmounts reported for governmental activities in the Statement of Activities are different because: \nGovernmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of capital assets is allocated over their estimated useful lives as depreciation expense. \nCapital outlay Depreciation expense \nTaxes reported in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. \nFederal revenue reported in the Statement of Activities that do not provide current financial resources are not reported as revenue in the funds. \nThe issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts and the difference between the carrying value of refunded debt and the acquisition cost of refunded debt when debt is first issued. These amounts are deferred and amortized in the Statement of Activities. \nAmortization of bond premium Bond principal retirements \nDistrict pension contributions are reported as expenditures in the governmental funds when made. However, they are reported as deferred outflows of resources in the Statement of Net Position because the reported net pension liability is measured a year before the District's report date. Pension expense, which is the change in the net pension liability adjusted for changes in deferred outflows and inflows of resources related to pensions, is reported in the Statement of Activities. \nPension expense \nSome items reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. \nAccrued interest on issuance of bonds \n \n$ \n \n813,639.04 \n \n$ \n \n839,145.10 \n \n(1,385,480.40) \n \n(546,335.30) (37,574.25) 216,087.38 \n \n$ \n \n225,753.88 \n \n2,550,000.00 \n \n2,775,753.88 \n \n(879,012.28) 42,500.00 \n \nChange in net position of governmental activities (Exhibit \"B\") \n \n$ \n \n2,385,058.47 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 7 - \n \n ASSETS Cash and Cash Equivalents Investments \nTotal Assets LIABILITIES Funds Held for Others \n \nFRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET POSITION \nFIDUCIARY FUNDS JUNE 30, 2017 \n \nEXHIBIT \"G\" \nAGENCY FUNDS $ 146,777.79 21,953.97 $ 168,731.76 $ 168,731.76 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 8 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2017 \n \nEXHIBIT \"H\" \n \nNOTE 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY \nREPORTING ENTITY \nThe Franklin County Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a board elected by the voters and a Superintendent appointed by the Board. The School District 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. \nNOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES \nThe accompanying financial statements of the School District have been prepared in conformity with generally accepted accounting principles (GAAP) as prescribed by the Governmental Accounting Standards Board (GASB). GASB is the accepted standard-setting body for governmental accounting and financial reporting principles. The most significant of the School District's accounting policies are described below. \nBASIS OF PRESENTATION \nThe School District's basic financial statements are collectively comprised of the government-wide financial statements, fund financial statements and notes to the basic financial statements. The government-wide statements focus on the School District as a whole, while the fund financial statements focus on major funds. Each presentation provides valuable information that can be analyzed and compared between years and between governments to enhance the information's usefulness. \nGOVERNMENT-WIDE STATEMENTS: \nThe Statement of Net Position 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. \nThe Statement of Net Position presents the School District's non-fiduciary assets and liabilities, with the difference reported as net position. Net position is reported in three categories as follows: \n1. Net investment in capital assets consists of the School District's total investment in capital assets, net of accumulated depreciation, and reduced by outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of net investment in capital assets. \n2. Restricted net position consists of resources for which the School District is legally or contractually obligated to spend in accordance with restrictions imposed by external third parties or imposed by law through constitutional provisions or enabling legislation. \n3. Unrestricted net position consists of resources not meeting the definition of the two preceding categories. Unrestricted net position often has constraints on resources imposed by management which can be removed or modified. \nThe Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities. \nDirect expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of 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. \n \n- 9 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2017 \n \nEXHIBIT \"H\" \n \nProgram 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. \nFUND FINANCIAL STATEMENTS \nThe 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 financial statements are presented for governmental and fiduciary funds. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column. \nThe School District reports the following major governmental funds: \n The general fund is the School District's primary operating fund. It accounts for and reports all financial resources not accounted for and reported in another fund. \n The capital projects fund accounts for and reports financial resources including Education Special Purpose Local Option Sales Tax (ESPLOST) that are restricted, committed or assigned for capital outlay expenditures, including the acquisition or construction of capital facilities and other capital assets. \n The debt service fund accounts for and reports financial resources that are restricted, committed, or assigned including taxes (sales) legally restricted for the payment of general long-term principal and interest. \nThe School District reports the following fiduciary fund type: \n Agency funds are used to report resources held by the School District in a purely custodial capacity (assets equal liabilities) and do not involve measurement of results of operations. \nBASIS OF ACCOUNTING \nThe basis of accounting determines when transactions are reported on the financial statements. The government-wide 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, and grants. 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 is recognized in the fiscal year in which all eligibility requirements have been satisfied. \nThe 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. \nGovernmental 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. The School District considers all intergovernmental revenues to be available if they are collected within 120 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, except for principal and interest on general longterm debt, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities are reported as other financing sources. \n- 10 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2017 \n \nEXHIBIT \"H\" \n \nThe 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. \nNEW ACCOUNTING PRONOUNCEMENTS \nIn fiscal year 2017, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 77, Tax Abatement Disclosures. This statement requires governments that enter into tax abatement agreements to disclose the following information; (1) brief descriptive information, such as the tax being abated, the authority under which tax abatements are provided, eligibility criteria, the mechanism by which taxes are abated, provisions for recapturing abated taxes, and the types of commitments made by tax abatement recipients; (2) the gross dollar amount of taxes abated during the period; and (3) commitments made by a government, other than to abate taxes, as part of a tax abatement agreement. The adoption of this statement does not have a significant impact on the School District's financial statements. \nIn fiscal year 2017, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 80, Blending Requirements for Certain Component Units  an amendment of GASB Statement No. 14. This statement amends the blending requirements for the financial statement presentation of component units of all state and local governments. The additional criterion requires blending of a component unit incorporated as a not-for-profit corporation in which the primary government is the sole corporate member. The additional criterion does apply to component units included in the financial reporting entity pursuant to the provisions of Statement No. 39, Determining Whether Certain Organization Are Component Units. The adoption of this statement does not have a significant impact on the School District's financial statements. \nIn fiscal year 2017, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 82, Pension Issues  an amendment of GASB Statements No. 67, No. 68 and No. 73. This statement addresses certain issues that have been raised with respect to Statements No. 67, Financial Reporting for Pension Plans, No. 68, Accounting and Financial Reporting for Pensions, and No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement No. 68, and Amendments to Certain Provisions of GASB Statements No. 67 and No. 68. Specifically, this statement addresses issues regarding (1) the presentation of payrollrelated measures in required supplementary information, (2) the selection of assumptions and the treatment of deviations from the guidance in an Actuarial Standard of Practice for financial reporting purposes, and (3) the classification of payments made by employers to satisfy employee (plan member) contribution requirements. The adoption of this statement does not have a significant impact on the School District's financial statements. \nCASH AND CASH EQUIVALENTS \nCash and cash equivalents consist of cash on hand, demand deposits, investments in the State of Georgia local government investment pool (Georgia Fund 1) 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 (O.C.G.A.) 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. \nINVESTMENTS \nThe School District can invest its funds as permitted by O.C.G.A. 36-83-4. 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. \n \n- 11 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2017 \n \nEXHIBIT \"H\" \n \nInvestments made by the School District in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. All other investments are reported at fair value. \n \nFor accounting purposes, certificates of deposit are classified as investments if they have an original maturity greater than three months when acquired. \nRECEIVABLES \n \nReceivables 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. \nINVENTORIES \n \nFood Inventories \n \nOn 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 (calculated on the first-in, first-out basis). 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. \nPREPAID ITEMS \n \nPayments made to vendors for services that will benefit future accounting periods are recorded as prepaid items, in both the government-wide and governmental fund financial statements. \nCAPITAL ASSETS \n \nOn the government-wide financial statements, capital assets are recorded 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 the acquisition value on the date donated. 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. The School District does not capitalize book collections or works of art. \n \nCapital acquisition and construction are recorded as expenditures in the governmental fund financial statements at the time of purchase (including ancillary charges), and the related assets are reported as capital assets in the governmental activities column in the government-wide financial statements. \n \nDepreciation is computed using the straight-line for all assets, except land, and is used to allocate the actual or estimated historical cost of capital assets over estimated useful lives. \n \nCapitalization thresholds and estimated useful lives of capital assets reported in the government-wide statements are as follows: \n \nCapitalization Policy \n \nEstimated Useful Life \n \nLand Land Improvements Improvements Equipment Intangible Assets \n \nAny Amount \n \nN/A \n \n$ \n \n10,000.00 \n \n20 to 80 years \n \n$ \n \n20,000.00 \n \n25 to 80 years \n \n$ \n \n5,000.00 \n \n5 to 50 years \n \n$ \n \n20,000.00 \n \nEstimated Life \n \n- 12 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2017 \n \nEXHIBIT \"H\" \n \nDEFERRED OUTFLOWS/INFLOWS OF RESOURCES \nIn addition to assets, the statement of financial position will report a separate section for deferred outflows of resources. This separate financial statement element, represents a consumption of resources that applies to a future period(s) and therefore will not be recognized as an outflow of resources (expense/expenditure) until then. \nIn addition to liabilities, the statement of financial position will report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of resources that applies to a future period(s) and therefore will not be recognized as an inflow of resources (revenue) until that time. \nLONG-TERM LIABILITIES AND BOND DISCOUNTS/PREMIUMS \nIn the School District's government-wide financial statements, outstanding debt is reported as liabilities. Bond premiums and discounts and the difference between the reacquisition price and the net carrying value of refunded debt are deferred and amortized over the life of the bonds using the straight-line method. To conform to generally accepted accounting principles, bond premiums and discounts should be amortized using the effective interest method. The effect of this deviation is deemed to be immaterial to the fair presentation of the basic financial statements. Bond issuance costs are recognized as an outflow of resources in the fiscal year in which the bonds are issued. \nIn the governmental fund financial statements, the School District recognizes the proceeds of debt and premiums as other financing sources of the current period. Bond issuance costs are reported as debt service expenditures. \nPENSIONS \nFor purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the pension plan's fiduciary net position and additions to/deductions from the plan's fiduciary net position have been determined on the same basis as they are reported by the plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. \nFUND BALANCES \nFund balance for governmental funds is reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. \nThe School District's fund balances are classified as follows: \nNonspendable consists of resources that cannot be spent either because they are in a nonspendable form or because they are legally or contractually required to be maintained intact. \nRestricted consists of resources that can be used only for specific purposes pursuant constraints either (1) externally imposed by creditors, grantors, contributors, or laws and regulations of other governments or (2) imposed by law through constitutional provisions or enabling legislation. \nCommitted consists of resources that can be used only for specific purposes pursuant to constraints imposed by formal action of the Board. The Board is the School District's highest level of decisionmaking authority, and the formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution approved by the Board. Committed fund balance also should incorporate contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements. \n \n- 13 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2017 \n \nEXHIBIT \"H\" \n \nAssigned consists of resources constrained by the School District's intent to be used for specific purposes, but are neither restricted nor committed. The intent should be expressed by (1) the Board or (2) the budget or finance committee, or the Superintendent, or designee, to assign amounts to be used for specific purposes. \nUnassigned consists of resources within the general fund not meeting the definition of any aforementioned category. The general fund should be the only fund that reports a positive unassigned fund balance amount. In other governmental funds, it may be necessary to report a negative unassigned fund balance. \nUSE OF ESTIMATES \nThe 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. \nPROPERTY TAXES \nThe Franklin County Board of Commissioners adopted the property tax levy for the 2016 tax digest year (calendar year) on July 26, 2016 (levy date) based on property values as of January 1, 2016. Taxes were due on November 15, 2016 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2016 tax digest are reported as revenue in the governmental funds for fiscal year 2017. The Franklin County Board of Commissioners bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2017, for maintenance and operations amounted to $9,627,554.77. \nThe tax millage rate levied for the 2016 tax year (calendar year) for the School District was as follows (a mill equals $1 per thousand dollars of assessed value): \n \nSchool Operations \n \n18.118 mills \n \nAdditionally, Title Ad Valorem Tax revenues, at the fund reporting level, amounted to $824,519.43 during fiscal year ended June 30, 2017. \nSALES TAXES \nEducation Special Purpose Local Option Sales Tax (ESPLOST), at the fund reporting level, during the year amounted to $3,156,984.76 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years. \nNOTE 3: BUDGETARY DATA \nThe budget is a complete financial plan for the School District's fiscal year and is based upon careful estimates of expenditures together with probable funding sources. The budget is legally adopted each year for the general, debt service, and capital projects funds. There is no statutory prohibition regarding over expenditure of the budget at any level. The budget for all governmental funds, except the various school activity (principal) accounts, is prepared and adopted by fund, function and object. The legal level of budgetary control was established by the Board at the aggregate function level. The budget for the general fund was prepared in accordance with accounting principles generally accepted in the United States of America. \nThe budgetary process begins with the School District's administration presenting an initial budget for the Board's review. The administration makes revisions as necessary based on the Board's guidelines, and a tentative budget is approved. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality, as well as the School \n \n- 14 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2017 \n \nEXHIBIT \"H\" \n \nDistrict's website. At the next regularly scheduled meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final budget. The approved budget is then submitted, in accordance with provisions of O.C.G.A. 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end. \nSee the General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances  Budget to Actual in the Supplementary Information Section for a detail of any over/under expenditures during the fiscal year under review. \nNOTE 4: DEPOSITS AND CASH EQUIVALENTS \nCOLLATERALIZATION OF DEPOSITS \nO.C.G.A.  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% 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.  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 110% of the daily pool balance. At June 30, 2017, $2,176,966.41 of deposits were not secured by surety bond, insurance or collateral as specified above. The School District is working with the affected financial institutions to ensure appropriate levels of collateral are maintained for all of the School District's deposits. \nAcceptable security for deposits consists of any one of or any combination of the following: \n(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, \n(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, \n(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia, \n(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, \n(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, \n(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and \n(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. \nCATEGORIZATION OF DEPOSITS \nCustodial 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, 2017, the School District had deposits with a carrying amount of $7,672,761.71, and a bank balance of $7,467,319.82. The bank balances insured by Federal depository insurance were $1,021,953.97 and the bank balances collateralized with securities held by the pledging financial institution in the School District's name were $3,680,404.15. \n \n- 15 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2017 \n \nEXHIBIT \"H\" \n \nAt June 30, 2017, $2,764,961.70 of the School District's bank balances were exposed to custodial credit risk as follows: \n \nUninsured and Uncollateralized Uninsured with collateral held by the pledging \nfinancial institution Uninsured with collateral held by the pledging \nfinancial institution's trust department or agent but not in the School District's name \n \n$ 2,176,966.41 - \n587,995.29 \n \nTotal \n \n$ 2,764,961.70 \n \nReconciliation of cash and cash equivalents balances to carrying value of deposits: \n \nStatement of Net Position Cash and cash equivalents \nStatement of Fiduciary Net Position Cash and cash equivalents \n \n$ 10,418,368.23 146,777.79 \n \nTotal cash and cash equivalents \nAdd: Deposits with original maturity of three months or more reported as investments \n \n10,565,146.02 21,953.97 \n \nLess: Investment pools reported as cash and cash equivalents \nGeorgia Fund 1 \n \n2,914,338.28 \n \nTotal carrying value of deposits - June 30, 2017 \n \n$ 7,672,761.71 \n \nCATEGORIZATION OF CASH EQUIVALENTS \n \nThe School District reported cash equivalents of $2,914,338.28 in Georgia Fund 1, a local government investment pool, which is included in the cash balances above. Georgia Fund 1 is not registered with the SEC as an investment company and does not operate in a manner consistent with the SEC's Rule 2a-7 of the Investment Company Act of 1940. The investment is valued at the pool's share price, $1.00 per share, which approximates fair value. The pool is an AAAf rated investment pool by Standard and Poor's. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2017, was 56 days. \nGeorgia Fund 1, administered by the State of Georgia, Office of the State Treasurer, is not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office of the State Treasurer for the Georgia Fund 1, does not provide for investment in derivatives or similar investments. Additional information on the Georgia Fund 1 is disclosed in the State of Georgia Comprehensive Annual Financial Report. This audit can be obtained from the Georgia Department of Audits and Accounts at www.audits.ga.gov/SGD/CAFR.html. \n \n- 16 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2017 \n \nEXHIBIT \"H\" \n \nNOTE 5: CAPITAL ASSETS \n \nThe following is a summary of changes in the capital assets for governmental activities during the fiscal year: \n \nBalances July 1, 2016 \n \nIncreases \n \nDecreases \n \nBalances June 30, 2017 \n \nGovernmental Activities Capital Assets, Not Being Depreciated: \nLand Construction in Progress \n \n$ 1,338,157.39 $ \n \n- $ \n \n- \n \n323,531.11 \n \n- $ 1,338,157.39 \n \n- \n \n323,531.11 \n \nTotal Capital Assets Not Being Depreciated \nCapital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements Intangible Assets \nLess Accumulated Depreciation for: Buildings and Improvements Equipment Land Improvements Intangible Assets \n \n1,338,157.39 \n \n323,531.11 \n \n- \n \n1,661,688.50 \n \n64,407,930.48 6,162,786.96 8,319,399.07 141,285.31 \n \n302,672.24 \n25,545.00 187,396.75 \n \n14,217.92 - \n \n64,407,930.48 6,465,459.20 8,330,726.15 328,682.06 \n \n10,385,135.53 3,989,876.23 1,227,436.59 98,489.88 \n \n842,491.70 337,463.68 142,409.49 \n63,115.53 \n \n14,217.92 - \n \n11,227,627.23 4,327,339.91 1,355,628.16 161,605.41 \n \nTotal Capital Assets, Being Depreciated, Net \n \n63,330,463.59 \n \n(869,866.41) \n \n- \n \n62,460,597.18 \n \nGovernmental Activity Capital Assets - Net \n \n$ 64,668,620.98 $ (546,335.30) $ \n \n- $ 64,122,285.68 \n \nCurrent year depreciation expense by function is as follows: \n \nInstruction \n \n$ \n \nSupport Services \n \nEducational Media Services \n \n$ 16,387.26 \n \nSchool Administration \n \n42,136.10 \n \nBusiness Administration \n \n18,146.35 \n \nMaintenance and Operation of Plant \n \n48,008.02 \n \nStudent Transportation Services \n \n203,906.53 \n \nFood Services \n \n963,510.87 \n328,584.26 93,385.27 \n \n$ 1,385,480.40 \n \n- 17 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2017 \n \nEXHIBIT \"H\" \n \nNOTE 6: LONG-TERM LIABILITIES The changes in long-term liabilities during the fiscal year for governmental activities, were as follows: \n \nBalance July 1, 2016 \n \nAdditions \n \nGovernmental Activities \n \nBalance \n \nDeductions \n \nJune 30, 2017 \n \nDue Within One Year \n \nGeneral Obligation Bonds Unamortized Bond Premiums \n \n$ 4,920,000.00 $ 451,507.78 \n \n- $ 2,550,000.00 $ 2,370,000.00 $ 2,370,000.00 \n \n- \n \n225,753.88 \n \n225,753.90 \n \n225,753.90 \n \n$ 5,371,507.78 $ \n \n- $ 2,775,753.88 $ 2,595,753.90 $ 2,595,753.90 \n \nGENERAL OBLIGATION DEBT OUTSTANDING \n \nThe School District's bonded debt consists of an issue of general obligation bonds that are generally callable with interest payable semiannually. Bond proceeds primarily pay for acquiring or constructing capital facilities. The School District repays general obligation bonds from voter-approved sales taxes. General obligation bonds are direct obligations and pledge the full faith and credit of the School District. \n \nOf the total amount authorized, $16,275,000.00 remains unissued. General obligation bonds currently outstanding are as follows: \n \nDescription \n \nInterest Rates Issue Date \n \nMaturity Date \n \nAmount Issued \n \nAmount Outstanding \n \nGeneral Government - Series 2012 \n \n3.00% - 5.00% 7/11/2012 3/1/2018 $ 12,120,000.00 $ 2,370,000.00 \n \nThe following schedule details debt service requirements to maturity for the School District's total general obligation bonds payable: \n \nFiscal Year Ended June 30: \n \nGeneral Obligation Debt \n \nPrincipal \n \nInterest \n \nUnamortized Bond Premium \n \n2018 \n \n$ 2,370,000.00 $ \n \n88,275.00 $ \n \n225,753.90 \n \nNOTE 7: RISK MANAGEMENT \nINSURANCE \nCommercial Insurance \nThe 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; and natural disasters. Except as described below, the School District carries commercial insurance for these risks. Settled claims resulting from these insured risks have not exceeded commercial insurance coverage in any of the past three fiscal years. \nGeorgia School Boards Association Risk and Insurance Management System \nThe School District participates in the Georgia School Boards Association Risk and Insurance Management System (the System), a public entity risk pool organized on July 1, 1994, to develop and administer a plan to reduce risk of loss on account of general liability, motor vehicle liability, or property damage, including safety engineering and other loss prevention and control techniques, and to administer one or more groups of self-insurance funds, including the processing and defense of claims brought against members of the system. The School District pays an annual premium to the System for its general insurance coverage. Additional coverage is provided through agreements by the System \n \n- 18 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2017 \n \nEXHIBIT \"H\" \n \nwith other companies according to their specialty for property, boiler and machinery (including coverage for flood and earthquake), general liability (including coverage for sexual harassment, molestation and abuse), errors and omissions, crime and automobile risks. Payment of excess insurance for the System varies by line of coverage. \nWORKERS' COMPENSATION \nGeorgia School Boards Association Workers' Compensation Fund \n \nThe School District participates in the Georgia School Boards Association Workers' Compensation Fund (the Fund), a public entity risk pool organized on July 1, 1992, 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 Fund for its Workers' Compensation insurance coverage. Excess insurance coverage is provided through an agreement by the Fund with the Safety National Casualty Corporation to provide coverage for potential losses sustained by the Fund in excess of $550 thousand loss per occurrence, up to the statutory limit. Employers' Liability insurance coverage is also provided by Safety National Casualty Corporation to provide coverage for potential losses sustained by the Fund in excess of $550 thousand loss per occurrence, up to $2.0 million. In addition to the $550,000.00 per occurrence retention, the Fund also retains an additional $200,000.00 per year corridor retention. \nUNEMPLOYMENT COMPENSATION \n \nThe School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the general fund with expenses/expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. The School District had no unemployment compensation claims in the past two years. \nSURETY BOND \n \nThe School District purchased a surety bond to provide additional insurance coverage as follows: \n \nPosition Covered \n \nAmount \n \nSuperintendent \n \n$ 100,000.00 \n \nNOTE 8: FUND BALANCE CLASSIFICATION DETAILS \n \nThe School District's financial statements include the following amounts presented in the aggregate at June 30, 2017: \n \nNonspendable Inventories Prepaid \nRestricted Continuation of Federal Programs Capital Projects Debt Service \nAssigned School Activity Accounts \nUnassigned \n \n$ 52,846.24 3,783.34 $ 56,629.58 \n \n$ 352,428.76 488,264.97 \n1,938,562.48 \n \n2,779,256.21 \n \n406,004.00 5,173,612.85 \n \nFund Balance, June 30, 2017 \n \n$ 8,415,502.64 \n \nWhen multiple categories of fund balance are available for expenditure, the School District will start with the most restricted category and spend those funds first before moving down to the next category with available funds. \n \n- 19 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2017 \n \nEXHIBIT \"H\" \n \nIt is the goal of the School District to achieve and maintain a committed, assigned, and unassigned fund balance in the general fund at fiscal year-end of not less than 5% of revenues, not to exceed 15% of the total budget of the subsequent fiscal year. If the unassigned fund balance at fiscal year-end falls below the goal, the School District shall develop a restoration plan to achieve and maintain the minimum fund balance. \nNOTE 9: SIGNIFICANT COMMITMENTS \nCOMMITMENTS UNDER CONSTRUCTION CONTRACTS \nThe following is an analysis of significant outstanding construction or renovation contracts executed by the School District as of June 30, 2017: \n \nProject \n \nUnearned Executed Contracts (1) \n \nPayments through June 30, 2017 (2) \n \nFRANKLIN COUNTY BOARD OF EDUCATION RE-ROOF $ \n \n3,241,835.00 $ \n \n223,164.00 \n \n(1) The amounts described are not reflected in the basic financial statements. (2) Payments include contracts and retainages payable at year-end. OPERATING LEASES \n \nThe School District leases copiers under the provisions of one or more long-term lease agreements classified as operating leases for accounting purposes. Rental expenditures under the terms of the operating leases totaled $87,659.08 for governmental for the year ended June 30, 2017. The following future minimum lease payments were required under operating leases at June 30, 2017: \n \nYear Ending \n \nGovernmental Funds \n \n2018 2019 \n \n$ 87,659.08 21,914.77 \n \nTotal \n \n$ 109,573.85 \n \nNOTE 10: SIGNIFICANT CONTINGENT LIABILITIES FEDERAL GRANTS \n \nAmounts 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. Any disallowances resulting from the grantor audit may become a liability of the School District. However, the School District believes that such disallowances, if any, will be immaterial to its overall financial position. \nLITIGATION \n \nThe School District is a defendant in various legal proceedings pertaining to 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 have a material adverse effect on the financial condition of the School District. \n \n- 20 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2017 \n \nEXHIBIT \"H\" \n \nNOTE 11: POST-EMPLOYMENT BENEFITS \n \nGEORGIA SCHOOL PERSONNEL POST-EMPLOYMENT HEALTH BENEFIT FUND \n \nPlan 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 Fund provides health insurance benefits to eligible former employees and their qualified beneficiaries through the State Employees Health Benefit Plan administered by the Department of Community Health. The Official Code of Georgia Annotated (O.C.G.A.) 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). Additional information about the School OPEB Fund is disclosed in the State of Georgia Comprehensive Annual Financial Report. This report can be obtained from the Georgia Department of Audits and Accounts at www.audits.ga.gov/SGD/CAFR.html. \nFunding 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. For members with fewer than five years of service as of January 1, 2012, contributions also vary based on years of service. On average, members with five years or more of service as of January 1, 2012 pay approximately 25% of the cost of the health insurance coverage. In accordance with the Board resolution dated December 8, 2011, for members with fewer than five years of service as of January 1, 2012, the State provides a premium subsidy in retirement that ranges from 0% for fewer than 10 years of service to 75% (but no greater than the subsidy percentage offered to active employees) for 30 or more years of service. The subsidy for eligible dependents ranges from 0% to 55% (but no greater than the subsidy percentage offered to dependents of active employees minus 20%). No subsidy is available to Medicare eligible members not enrolled in a Medicare Advantage Option. The Board of Community Health sets all member premiums by resolution and in accordance with the law and applicable revenue and expense projections. Any subsidy policy adopted by the Board may be changed at any time by Board resolution and does not constitute a contract or promise of any amount of subsidy. \n \nParticipating 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 \"payas-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. \n \nThe 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, 2017: \n \nFor certificated teachers, librarians and regional educational service agencies and certain other eligible participants: \n \nJuly 1, 2016  June 30, 2017 \n \n$945.00 per member per month \n \nFor non-certificated school personnel: \n \nJuly 1, 2016  December 31, 2016 $746.20 per member per month \n \nJanuary 1, 2017  June 30, 2017 $846.20 per member per month \n \nNo additional contribution was required by the Board for fiscal year 2017 nor contributed to the School OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the School plan for other post-employment benefits and are subject to appropriation. \n \n- 21 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2017 \n \nEXHIBIT \"H\" \n \nThe School District's combined active and retiree contributions to the health insurance plans, which equaled the required contribution, for the current fiscal year and the preceding two fiscal years were as follows: \n \nFiscal Year \n \nPercentage Contributed \n \nRequired Contribution \n \n2017 2016 2015 \n \n100% 100% 100% \n \n$ 4,411,630.58 $ 4,167,767.78 $ 3,898,024.90 \n \nNOTE 12: RETIREMENT PLANS \n \nThe School District participates in various retirement plans administered by the State of Georgia, as further explained below. \nTEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) \nPlan Description: All teachers of the School District as defined in O.C.G.A 47-3-60 and certain other support personnel as defined by 47-3-63 are provided a pension through the Teachers Retirement System of Georgia (TRS). TRS, a cost-sharing multiple-employer defined benefit pension plan, is administered by the TRS Board of Trustees (TRS Board). Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. The Teachers Retirement System of Georgia issues a publicly available separate financial audit report that can be obtained at www.trsga.com/publications. \nBenefits Provided: TRS provides service retirement, disability retirement, and death benefits. Normal retirement benefits are determined as 2% of the average of the employee's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. An employee is eligible for normal service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. Ten years of service is required for disability and death benefits eligibility. Disability benefits are based on the employee's creditable service and compensation up to the time of disability. Death benefits equal the amount that would be payable to the employee's beneficiary had the employee retired on the date of death. Death benefits are based on the employee's creditable service and compensation up to the date of death. \nContributions: Per Title 47 of the O.C.G.A., contribution requirements of active employees and participating employers, as actuarially determined, are established and may be amended by the TRS Board. Pursuant to O.C.G.A. 47-3-63, the employer contributions for certain full-time public school support personnel are funded on behalf of the employer by the State of Georgia. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees were required to contribute 6% of their annual pay during fiscal year 2017. The School District's contractually required contribution rate for the year ended June 30, 2017 was 14.27% of annual School District payroll, of which 14.11% of payroll was required from the School District and 0.16% of payroll was required from the State. For the current fiscal year, employer contributions to the pension plan were $2,715,973.35 and $30,578.93 from the School District and the State, respectively. \nPUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM (PSERS) \nPlan description: PSERS is a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly in 1969 for the purpose of providing retirement allowances for public school employees who are not eligible for membership in the Teachers Retirement System of Georgia. The ERS Board of Trustees, plus two additional trustees, administers PSERS. Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. PSERS issues a publicly available financial report that can be obtained at www.ers.ga.gov/formspubs/formspubs. \n- 22 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2017 \n \nEXHIBIT \"H\" \n \nBenefits provided: A member may retire and elect to receive normal monthly retirement benefits after completion of ten years of creditable service and attainment of age 65. A member may choose to receive reduced benefits after age 60 and upon completion of ten years of service. \nUpon retirement, the member will receive a monthly benefit of $14.75, multiplied by the number of years of creditable service. Death and disability benefits are also available through PSERS. Additionally, PSERS may make periodic cost-of-living adjustments to the monthly benefits. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contribution, the member forfeits all rights to retirement benefits. \nContributions: The general assembly makes an annual appropriation to cover the employer contribution to PSERS on behalf of local school employees (bus drivers, cafeteria workers, and maintenance staff). The annual employer contribution required by statute is actuarially determined and paid directly to PSERS by the State Treasurer in accordance with O.C.G.A. 47-4-29(a) and 60(b). Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. \nIndividuals who became members prior to July 1, 2012 contribute $4 per month for nine months each fiscal year. Individuals who became members on or after July 1, 2012 contribute $10 per month for nine months each fiscal year. The State of Georgia, although not the employer of PSERS members, is required by statute to make employer contributions actuarially determined and approved and certified by the PSERS Board of Trustees. The current fiscal year contribution was $65,518.00. \nPension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions \nAt June 30, 2017, the School District reported a liability of $34,376,802.00 for its proportionate share of the net pension liability for TRS. \nThe TRS net pension liability reflected a reduction for support provided to the School District by the State of Georgia for certain public school support personnel. The amount recognized by the School District as its proportionate share of the net pension liability, the related State of Georgia support, and the total portion of the net pension liability that was associated with the School District were as follows: \nSchool District's proportionate share of the net pension liability $ 34,376,802.00 \n \nState of Georgia's proportionate share of the net pension liability associated with the School District \n \n527,744.00 \n \nTotal \n \n$ 34,904,546.00 \n \nThe net pension liability for TRS was measured as of June 30, 2016. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2015. An expected total pension liability as of June 30, 2016 was determined using standard roll-forward techniques. The School District's proportion of the net pension liability was based on contributions to TRS during the fiscal year ended June 30, 2016. \nAt June 30, 2016, the School District's TRS proportion was 0.166626%, which was a decrease of 0.001870% from its proportion measured as of June 30, 2015. \nAt June 30, 2017, the School District did not have a PSERS liability for a proportionate share of the net pension liability because of a Special Funding Situation with the State of Georgia, which is responsible for the net pension liability of the plan. The amount of the State's proportionate share of the net pension liability associated with the School District is $486,621.00. \n \n- 23 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2017 \n \nEXHIBIT \"H\" \n \nThe PSERS net pension liability was measured as of June 30, 2016. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2015. An expected total pension liability as of June 30, 2016 was determined using standard roll-forward techniques. The State's proportion of the net pension liability associated with the School District was based on actuarially determined contributions paid by the State during the fiscal year ended June 30, 2016. \nFor the year ended June 30, 2017, the School District recognized pension expense of $3,665,386.00 for TRS and $79,775.00 for PSERS and revenue of $75,833.00 for TRS and $79,775.00 for PSERS. The revenue is support provided by the State of Georgia. For TRS the State of Georgia support is provided only for certain support personnel. \nAt June 30, 2017, the School District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: \n \nTRS \n \nDeferred Outflows of Resources \n \nDeferred Inflows of Resources \n \nDifferences between expected and actual experience \n \n$ 512,122.00 $ 169,994.00 \n \nChanges of assumptions \nNet difference between projected and actual earnings on pension plan investments \nChanges in proportion and differences between School District contributions and proportionate share of contributions \nSchool District contributions subsequent to the measurement date \n \n890,999.00 \n \n- \n \n4,348,807.00 \n \n- \n \n376,514.00 \n \n590,408.00 \n \n2,715,973.35 \n \n- \n \nTotal \n \n$ 8,844,415.35 $ 760,402.00 \n \nThe School District contributions subsequent to the measurement date of $2,715,973.35 for TRS are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ended June 30, 2018. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: \n \nYear Ended June 30: \n \nTRS \n \n2018 2019 2020 2021 2022 \n \n$ 577,617.00 $ 577,616.00 $ 2,497,087.00 $ 1,660,874.00 $ 54,846.00 \n \n- 24 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2017 \n \nEXHIBIT \"H\" \n \nActuarial assumptions: The total pension liability as of June 30, 2016 was determined by an actuarial valuation as of June 30, 2015, using the following actuarial assumptions, applied to all periods included in the measurement: \nTeachers Retirement System: \n \nInflation \n \n2.75% \n \nSalary increases \n \n3.25%  9.00%, average, including inflation \n \nInvestment rate of return \n \n7.50%, net of pension plan investment expense, including inflation \n \nPost-retirement mortality rates were based on the RP-2000 White Collar Mortality Table with future mortality improvement projected to 2025 with the Society of Actuaries' projection scale BB (set forward one year for males) for service requirements and dependent beneficiaries. The RP-2000 Disabled Mortality table with future mortality improvement projected to 2025 with Society of Actuaries' projection scale BB (set forward two years for males and four years for females) was used for the death after disability retirement. Rates of mortality in active service were based on the RP-2000 Employee Mortality Table projected to 2025 with projection scale BB. \n \nThe actuarial assumptions used in the June 30, 2015 valuation were based on the results of an actuarial experience study for the period July 1, 2009  June 30, 2014. \nPublic School Employees Retirement System: \n \nInflation \n \n2.75% \n \nSalary increases \n \nN/A \n \nInvestment rate of return \n \n7.50%, net of pension plan investment expense, including inflation \n \nPost-retirement mortality rates were based on the RP-2000 Blue-Collar Mortality Table projected to 2025 with projection scale BB (set forward 3 years for males and 2 years for females) for the period after service retirements and for dependent beneficiaries. The RP-2000 Disabled Mortality projected to 2025 with projection scale BB (set forward 5 years for both males and females) was used for death after disability retirement. There is a margin for future mortality improvement in the tables used by the System. Based on the results of the most recent experience study adopted by the Board on December 17, 2015, the numbers of expected future deaths are 9-11% less than the actual number of deaths that occurred during the study period for healthy retirees and 9-11% less than expected under the selected table for disabled retirees. Rates of mortality in active service were based on the RP-2000 Employee Mortality Table projected to 2025 with projection scale BB. \nThe actuarial assumptions used in the June 30, 2015 valuation were based on the results of an actuarial experience study for the period July 1, 2009  June 30, 2014. \nThe long-term expected rate of return on TRS and PSERS pension plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return \n \n- 25 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2017 \n \nEXHIBIT \"H\" \n \nby weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target asset allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: \n \nAsset class \n \nTRS Target allocation \n \nPSERS Target allocation \n \nLong-term expected real rate of return* \n \nFixed income Domestic large stocks Domestic mid stocks Domestic small stocks International developed market stocks International emerging market stocks Alternative \n \n30.00% 39.80% \n3.70% 1.50% 19.40% 5.60% \n- \n \n30.00% 37.20% \n3.40% 1.40% 17.80% 5.20% 5.00% \n \n(0.50)% 9.00% \n12.00% 13.50% \n8.00% 12.00% 10.50% \n \nTotal \n \n100.00% \n \n100.00% \n \n* Rates shown are net of the 2.75% assumed rate of inflation \nDiscount rate: The discount rate used to measure the total TRS and PSERS pension liability was 7.50%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and nonemployer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the TRS and PSERS pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. \nSensitivity of the School District's proportionate share of the net pension liability to changes in the discount rate: The following presents the School District's proportionate share of the net pension liability calculated using the discount rate of 7.50%, as well as what the School District's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.50%) or 1-percentage-point higher (8.50%) than the current rate: \n \nTeachers Retirement System: \n \n1% Decrease (6.50%) \n \nCurrent Discount Rate (7.50%) \n \n1% Increase (8.50%) \n \nSchool District's proportionate share of the \n \nnet pension liability \n \n$ 53,507,916.00 $ \n \n34,376,802.00 $ 18,625,483.00 \n \nPension plan fiduciary net position: Detailed information about the pension plan's fiduciary net position is available in the separately issued TRS and PSERS financial report which is publicly available at www.trsga.com/publications and http://www.ers.ga.gov/formspubs/formspubs.html. \n \nDEFINED CONTRIBUTION PLAN \n \nThe Franklin County Board of Education participates in an employer paid 403(b) annuity plan for the group of employees covered under the Public School Employees Retirement System (PSERS). Recognizing that PSERS was a limited defined contribution and defined benefit plan which did not provide for an adequate retirement for this group of employees, it was the Board's desire to supplement the retirement of this group. \n \nThe School District selected Lincoln as the provider of this plan. For each employee covered under PSERS, the Board contributes to the plan an amount equal to the amount contributed by the employee not to exceed $25.00 per employee per month. \n \n- 26 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2017 \n \nEXHIBIT \"H\" \n \nThe employee becomes vested in the plan with 5 years of experience. Employees who had already achieved 5 years of experience at the time the plan was implemented were vested upon enrollment. \nFunds accumulated in the employer paid accounts are only available to the employee upon termination of employment and 5 years of service to Franklin County Board of Education. If an employee terminates employment prior to 5 years of service, funds paid on behalf of the non-vested employee are credited back to the School District. \nEmployer contribution for the current fiscal year and the preceding two fiscal years are as follows: \n \nFiscal Year \n \nPercentage Contributed \n \nRequired Contribution \n \n2017 2016 2015 \n \n100% 100% 100% \n \n$ \n \n13,025.00 \n \n$ \n \n14,285.00 \n \n$ \n \n14,205.00 \n \nNOTE 13: SUBSEQUENT EVENTS \n \nOn April 26, 2018, the Franklin County Board of Education issued general obligation bonds for $8,585,000.00 to provide funding for various capital outlay projects. \n \n- 27 - \n \n (This page left intentionally blank) \n \n FRANKLIN COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY TEACHERS RETIREMENT SYSTEM OF GEORGIA \nFOR THE YEAR ENDED JUNE 30 \n \nSCHEDULE \"1\" \n \nYear Ended \n \nSchool District's proportion of the net \npension liability \n \nSchool District's proportionate share of the net pension liability \n \nState of Georgia's proportionate share of the net \npension liability associated with the School District \n \n2017 2016 2015 \n \n0.166626% $ 0.168496% $ 0.164905% $ \n \n34,376,802.00 $ 25,651,843.00 $ 20,833,572.00 $ \n \n527,744.00 $ 413,180.00 $ 331,129.00 $ \n \nTotal \n34,904,546.00 26,065,023.00 21,164,701.00 \n \nSchool District's covered payroll \n$ 18,595,862.11 $ 18,071,345.00 $ 17,091,045.00 \n \nSchool District's proportionate share of the net pension \nliability as a percentage of its covered payroll \n \nPlan fiduciary net position as a \npercentage of the total pension liability \n \n184.86% 141.95% 121.90% \n \n76.06% 81.44% 84.03% \n \nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \n \n- 29 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMNTARY INFORMATION SCHEDULE OF PROPRTIONATE SHARE OF THE NET PENSION LIABILITY PUBLIC SCHOOLS EMPLOYEES RETIREMNT SYSTEM OF GEORGIA \nFOR THE YEAR ENDED JUNE 30 \n \nSCHEDULE \"2\" \n \nYear Ended \n \nSchool District's proportion of the net \npension liability \n \nSchool District's proportionate share of the \nnet pension liability \n \nState of Georgia's proportionate share of the \nnet pension liability associated with the School \nDistrict \n \n2017 2016 \n \n0.00% $ 0.00% $ \n \n- \n \n$ \n \n- \n \n$ \n \n486,621.00 $ 291,284.00 $ \n \nTotal \n486,621.00 291,284.00 \n \nSchool District's covered payroll \n$ 1,177,357.03 $ 1,146,939.61 \n \nSchool District's proportionate share of the net pension liability as a percentage of its covered \npayroll \n \nPlan fiduciary net position as a \npercentage of the total pension liability \n \nN/A \n \n81.00% \n \nN/A \n \n87.00% \n \nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \n \n- 30 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION \nSCHEDULE OF CONTRIBUTIONS TEACHERS RETIREMENT SYSTEM OF GEORGIA \nFOR THE YEAR ENDED JUNE 30 \n \nSCHEDULE \"3\" \n \nYear Ended \n \nContractually required contribution \n \nContributions in relation to the contractually required \ncontribution \n \nContribution deficiency (excess) \n \n2017 \n \n$ \n \n2,715,973.35 $ \n \n2,715,973.35 $ \n \n- \n \n2016 \n \n$ \n \n2,613,592.63 $ \n \n2,613,592.63 $ \n \n- \n \n2015 \n \n$ \n \n2,338,991.09 $ \n \n2,338,991.09 $ \n \n- \n \nSchool District's covered payroll \n$ 19,253,341.53 $ 18,595,862.11 $ 18,071,345.00 \n \nContribution as a percentage of covered \npayroll \n14.11% 14.05% 12.94% \n \nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \n \n- 31 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION \nFOR THE YEAR ENDED JUNE 30, 2017 \n \nSCHEDULE \"4\" \n \nTeachers Retirement System \nChanges of assumptions: In 2010 and later, the expectation of retired life mortality was changed to the RP2000 Mortality Tables rather than the 1994 Group Annuity Mortality Table, which was used prior to 2010. In 2010, rates of withdrawal, retirement, disability and mortality were adjusted to more closely reflect actual experience. In 2010, assumed rates of salary increase were adjusted to more closely reflect actual and anticipated experience. \nOn November 18, 2015, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System. Primary among the changes were the updates to rates of mortality, retirement, disability, withdrawal and salary increases. The expectation of retired life mortality was changed to RP2000 White Collar Mortality Table with future mortality improvement projected to 2025 with the Society of Actuaries' projection scale BB (set forward one year for males). \nPublic School Employees Retirement System \nChanges of assumptions: In 2010 and later, the expectation of retired life mortality was changed to the RP2000 Mortality Tables rather than the 1994 Group Annuity Mortality Table, which was used prior to 2010. In 2010, rates of withdrawal, retirement, disability and mortality were adjusted to more closely reflect actual experience. \nOn December 17, 2015, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System. Primary among the changes were the updates to rates of mortality, retirement and withdrawal. The expectation of retired life mortality was changed to the RP2000 Blue Collar Mortality Table projected to 2025 with projection scale BB (set forward 3 years for males and 2 years for females). \n \n- 32 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION GENERAL FUND \nSCHEDULE OF REVENUE, EXPENDIUTRES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL \nYEAR ENDED JUNE 30, 2017 \n \nSCHEDULE \"5\" \n \nREVENUES \nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous \nTotal Revenues \nEXPENDITURES \nCurrent 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 Food Services Operation \nTotal Expenditures \nExcess of Revenues over (under) Expenditures \nOTHER FINANCING SOURCES \nOther Sources \nNet Change in Fund Balances \nFund Balances - Beginning \nAdjustments \n \nNONAPPROPRIATED BUDGETS \n \nORIGINAL (1) \n \nFINAL (1) \n \nACTUAL AMOUNTS \n \nVARIANCE OVER/UNDER \n \n$ \n \n10,689,900.00 $ \n \n10,452,501.00 $ \n \n10,452,074.20 $ \n \n- \n \n- \n \n191,501.07 \n \n20,897,201.00 \n \n21,826,974.00 \n \n22,385,753.76 \n \n3,913,353.00 \n \n3,917,033.00 \n \n4,684,143.43 \n \n316,600.00 \n \n316,600.00 \n \n531,679.70 \n \n27,000.00 \n \n27,000.00 \n \n6,433.79 \n \n40,000.00 \n \n40,000.00 \n \n1,126,014.28 \n \n35,884,054.00 \n \n36,580,108.00 \n \n39,377,600.23 \n \n(426.80) 191,501.07 558,779.76 767,110.43 215,079.70 (20,566.21) 1,086,014.28 \n2,797,492.23 \n \n25,169,176.17 \n1,433,112.71 2,558,011.22 \n495,693.68 567,306.20 2,125,461.67 360,152.90 2,347,755.19 2,234,778.52 \n3,000.00 306,000.00 \n1,736,635.69 \n39,337,083.95 \n(3,453,029.95) \n \n25,453,545.67 \n1,685,012.21 2,471,798.40 \n507,381.68 597,957.20 2,173,122.92 364,990.90 2,341,779.19 2,279,819.52 \n3,000.00 306,000.00 \n1,736,635.69 \n39,921,043.38 \n(3,340,935.38) \n \n24,103,884.67 \n1,475,721.07 1,979,296.03 \n561,169.06 576,822.59 2,082,006.27 330,967.26 2,262,442.61 2,500,117.44 \n178.00 295,070.31 597,205.76 1,682,385.80 \n38,447,266.87 \n930,333.36 \n \n1,349,661.00 \n209,291.14 492,502.37 (53,787.38) \n21,134.61 91,116.65 34,023.64 79,336.58 (220,297.92) \n2,822.00 10,929.69 (597,205.76) 54,249.89 \n1,473,776.51 \n4,271,268.74 \n \n103,000.00 (3,350,029.95) 4,834,107.84 \n30,752.56 \n \n103,000.00 (3,237,935.38) 2,457,953.31 \n63,792.19 \n \n930,333.36 5,058,341.83 \n- \n \n(103,000.00) 4,168,268.74 2,600,388.52 \n(63,792.19) \n \nFund Balances - Ending \n \n$ \n \n1,514,830.45 $ \n \n(716,189.88) $ \n \n5,988,675.19 $ \n \n6,704,865.07 \n \nNotes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual \n(1) Original and Final Budget amounts do not include the budgeted revenues or expenditures of the various principal accounts. The actual revenues and expenditures of the various principal accounts are $935,028.91 and $994,194.27, respectively. \nThe accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements. \n \nSee notes to the basic financial statements. \n \n- 33 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \nYEAR ENDED JUNE 30, 2017 \n \nSCHEDULE \"6\" \n \nFUNDING AGENCY PROGRAM/GRANT \nAgriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program \nTotal U. S. Department of Agriculture \nEducation, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Special Education Grants to States Grants to States Preschool Grants Preschool Grants \nTotal Special Education Cluster \nOther Programs Pass-Through From Georgia Department of Education Career and Technical Education - Basic Grants to States English Language Acquisition Grants English Language Acquisition Grants Improving Teacher Quality State Grants Migrant Education - State Grant Program Migrant Education - State Grant Program Rural Education Rural Education Striving Readers Title I Grants to Local Educational Agencies Title I Grants to Local Educational Agencies \nTotal Other Programs \nTotal U. S. Department of Education \n \nCFDA NUMBER \n \nPASSTHROUGH \nENTITY ID \nNUMBER \n \nEXPENDITURES IN PERIOD \n \n10.553 10.555 \n \n17175GA324N1099 $ 17175GA324N1099 \n \n252,019.28 1,371,878.39 \n1,623,897.67 \n \n84.027 84.027 84.173 84.173 \n \nH027A150073 H027A160073 H173A150081 H173A160081 \n \n84.048 84.365 84.365 84.367 84.011 84.011 84.358 84.358 84.371 84.010 84.010 \n \nV048A150010 S365A150010 S365A160010 S367A150001 S011A150011 S011A160011 S358B150010 S358B160010 S371C110049 S010A150010 S010A160010 \n \n170,229.49 588,888.62 \n13,711.33 23,521.51 \n796,350.95 \n40,527.50 5,166.00 6,489.92 \n126,677.64 8,263.96 \n24,624.07 29,831.00 79,957.87 1,562,399.10 \n7,764.00 957,835.93 \n2,849,536.99 \n3,645,887.94 \n \nTotal Expenditures of Federal Awards \n \n$ \n \n5,269,785.61 \n \nNotes to the Schedule of Expenditures of Federal Awards \n \nNote 1. Basis of Presentation \n \nThe accompanying schedule of expenditures of federal awards (the \"Schedule\") includes the federal award activity of the Franklin County Board of Education (the \"Board\") under programs of the federal government for the year ended June 30, 2017. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Board, it is not intended to and does not present the financial position or changes in net position of the Board. \n \nNote 2. Summary of Significant Accounting Policies \n \nExpenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments , or the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards , wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Board has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. \n \nSee notes to the basic financial statements. \n \n- 34 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2017 \nAGENCY/FUNDING \nGRANTS 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 Elementary Grades (4-5) Program Upper Elementary Grades - Early Intervention (4-5) Program Middle Grades (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program 20 Days Additional Instruction Staff and Professional Development Principal Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Amended Formula Adjustment Categorical Grants Pupil Transportation Regular Nursing Services Education Equalization Funding Grant Other State Programs Food Services Math and Science Supplements Preschool Disability Services Pupil Transportation - State Bonds Teacher of the Year Teachers Retirement Vocational Education \nOffice of the State Treasurer Public School Employees Retirement \nCONTRACTS Human Resources, Georgia Department of Family Connection \nTechnical College System of Georgia Move on When Ready \n \nSCHEDULE \"7\" \n \nGOVERNMENTAL FUND TYPE GENERAL FUND \n \n$ \n \n867,944.00 \n \n515,674.00 \n \n2,231,206.00 \n \n1,368,341.00 \n \n1,058,563.00 \n \n823,921.00 \n \n2,359,797.00 \n \n1,953,458.00 \n \n659,789.00 \n \n3,354,170.00 \n \n631,420.00 \n \n729,222.00 \n \n162,300.00 \n \n149,715.00 \n \n432,079.00 \n \n131,767.00 \n \n75,472.00 \n \n1,577.00 \n \n557,604.00 913,354.00 968,109.00 (302,976.00) \n \n624,721.00 71,220.00 \n1,504,405.00 \n43,990.00 18,598.52 112,698.33 77,216.25 \n507.25 30,578.93 132,921.99 \n \n65,518.00 \n \n46,517.49 14,355.00 \n \n$ 22,385,753.76 \n \nSee notes to the basic financial statements. \n \n- 35 - \n \n (This page left intentionally blank) \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \nYEAR ENDED JUNE 30, 2017 \n \nSCHEDULE \"8\" \n \nPROJECT (SPLOST IV) i) Acquiring, constructing, and equipping replacement school buildings at Franklin County High School, \n \nORIGINAL ESTIMATED \nCOST (1) \n \nCURRENT ESTIMATED COSTS (2) \n \nAMOUNT EXPENDED IN CURRENT YEAR (3) (4) (5) \n \nAMOUNT EXPENDED IN PRIOR YEAR (3) (4) (5) \n \nTOTAL COMPLETION \nCOST \n \nEXCESS PROCEEDS NOT \nEXPENDED \n \n$ 16,300,000.00 $ 15,300,000.00 $ \n \n- $ 15,245,081.84 $ \n \n- $ \n \n- \n \nii) adding to, renovating, repairing, improving, \n \nacquiring and equipping school buildings and \n \nschool system facilities; \n \n500,000.00 \n \n2,000,000.00 \n \n294,708.18 \n \n1,348,444.38 \n \n- \n \n- \n \niii) acquiring miscellaneous new equipment, \n \nfixtures and furnishings for the school system, \n \nincluding computer technology equipment, \n \ncomputer software, school buses and other \n \nvehicles, transportation and maintenance \n \nequipment, and security and safety equipment; \n \n1,300,000.00 \n \n2,500,000.00 \n \n126,986.81 \n \n2,304,155.18 \n \n- \n \n- \n \niv) acquiring land or improving land for new or \n \nexisting schools; \n \n100,000.00 \n \n100,000.00 \n \n- \n \n- \n \n- \n \n- \n \nv) acquiring textbooks, e-books, and e-book \n \nreaders for the school system; \n \n400,000.00 \n \n100,000.00 \n \n- \n \n- \n \n- \n \n- \n \nvi) paying a portion of the payments, including \n \nprincipal and interest , due on the School \n \nDistrict's Series 2006 and 2007 Bonds with a \n \nmaximum payment amount of $1,700,000, \n \nwith the maximum cost of the projects \n \ndescribed in items (i)-(vi) payable from said tax \n \nbeing $20,000,000, \n \n1,700,000.00 \n \n300,000.00 \n \n- \n \n227,097.58 \n \n- \n \n- \n \nPROJECT (SPLOST V) \n \ni) Constructing, renovating, and equipping a \n \nCTAE career academy at Franklin County High \n \nSchool and constructing and equipping \n \nadditions to Carnesville Intermediate School \n \n11,000,000.00 \n \n11,000,000.00 \n \n100,367.11 \n \n- \n \n- \n \n- \n \nii) adding to, renovating, repairing, improving, \n \nacquiring and equipping school buildings and \n \nschool system facilities; \n \n3,000,000.00 \n \n3,000,000.00 \n \n- \n \n- \n \n- \n \n- \n \niii) acquiring miscellaneous new equipment, \n \nfixtures and furnishings for the school system, \n \nincluding computer technology equipment, \n \ncomputer software, school buses and other \n \nvehicles, transportation and maintenance \n \nequipment, and security and safety equipment; \n \n3,500,000.00 \n \n3,500,000.00 \n \n- \n \n- \n \n- \n \n- \n \niv) acquiring land or improving land for new or \n \nexisting schools; \n \n100,000.00 \n \n100,000.00 \n \n- \n \n- \n \n- \n \n- \n \nv) acquiring textbooks, e-books, and e-book \n \nreaders for the school system; \n \n300,000.00 \n \n300,000.00 \n \n- \n \n- \n \n- \n \n- \n \nvi) paying any general obligation debt of the \n \nSchool District issued in conjunction with the \n \nimposition of such sales and use tax. \n \n100,000.00 \n \n100,000.00 \n \n- \n \n- \n \n- \n \n- \n \nESTIMATED COMPLETION \nDATE June 30, 2018 June 30, 2018 \nJune 30, 2018 June 30, 2018 June 30, 2018 \nJune 30, 2018 \nJune 30, 2023 June 30, 2023 \nJune 30, 2023 June 30, 2023 June 30, 2023 June 30, 2023 \n \n$ 38,300,000.00 $ 38,300,000.00 $ \n \n522,062.10 $ 19,124,778.98 $ \n \n- $ \n \n- \n \n(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax. \n \n(2) The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion. \n(3) The voters of Franklin County approved the imposition of a 1% sales tax to fund the above projects and retire associated debt. Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the projects. \n \n(4) In addition to the expenditures shown above, the School District has incurred interest to provide advance funding for the above projects as follows: \n \nPrior Years \n \n$ 1,619,736.80 \n \nCurrent Year \n \n215,775.00 \n \nTotal \n \n$ 1,835,511.80 \n \n(5) In addition to the expenditures shown above, the School District has incurred bond issuance cost and related paying agent fees for the above projects as follows: \n \nPrior Years \n \n$ \n \n163,672.39 \n \nCurrent Year \n \n2,773.76 \n \nTotal \n \n$ \n \n166,446.15 \n \nSee notes to the basic financial statements. \n \n- 37 - \n \n SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS \n \n Greg S. Griffin \nSTATE AUDITOR \n(404) 656-2174 \n \nDEPARTMENT OF AUDITS AND ACCOUNTS \n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \nJune 25, 2019 \n \nThe Honorable Brian P. Kemp, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the State Board of Education \nand Superintendent and Members of the Franklin County Board of Education \nINDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED \nIN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS \nWe have audited, in accordance with the 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, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Franklin County Board of Education (School District), as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the School District's basic financial statements, and have issued our report thereon dated June 25, 2019. \nInternal Control Over Financial Reporting \nIn planning and performing our audit of the financial statements, we considered the School District's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the School District's internal control. Accordingly, we do not express an opinion on the effectiveness of the School District's internal control. \nA 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. A significant deficiency is a deficiency, or a 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. \nOur consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did identify certain deficiencies in internal control, described in the accompanying Schedule of Findings and Questioned Costs as items FS 2017-001 and FS 2017-002 that we consider to be material weaknesses. \n \n Compliance and Other Matters \nAs part of obtaining reasonable assurance about whether the School District's financial statements are free from 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. \nSchool District's Response to Findings \nThe School District's response to the findings identified in our audit is described in the accompanying Schedule of Findings and Questioned Costs. The School District's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. \nPurpose of this Report \nThe purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the School District's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the School District's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. \nRespectfully submitted, \nGreg S. Griffin State Auditor \n \n Greg S. Griffin \nSTATE AUDITOR \n(404) 656-2174 \n \nDEPARTMENT OF AUDITS AND ACCOUNTS \n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \nJune 25, 2019 \n \nThe Honorable Brian P. Kemp, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the State Board of Education \nand Superintendent and Members of the Franklin County Board of Education \nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE \nReport on Compliance for Each Major Federal Program \nWe have audited the Franklin County Board of Education (School District) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2017. The School District's major federal programs are identified in the Summary of Auditor's Results section of the accompanying Schedule of Findings and Questioned Costs. \nManagement's Responsibility \nManagement is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. \nAuditor's Responsibility \nOur responsibility is to express an opinion on compliance for each of the School District's major federal programs based on our audit of the types of compliance requirements referred to above. 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 the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance 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 School District's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. \nWe believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the School District's compliance. \n \n Opinion on Each Major Federal Program \nIn our opinion, the School District complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2017. \nReport on Internal Control over Compliance \nManagement of the School District is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the School District's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, 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 School District's internal control over compliance. \nA 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 compliance 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. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. \nOur 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 material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. \nThe purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. \nRespectfully submitted, \nGreg S. Griffin State Auditor \n \n SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS \n \n FRANKLIN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2017 \n \nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \n \nFS-6591-13-01 Control Category: \nInternal Control Impact: Compliance Impact: \n \nInadequate Internal Controls Cash and Cash Equivalents Revenues/Receivables/Receipts Expenditures/Liabilities/Disbursements General ledger Capital Assets Material Weakness None \n \nFinding Status: \n \nPartially Resolved \n \nAll bank reconciliations will be completed in a timely manner. The main cash accounts will be completed within a month and are reviewed and signed off by two staff members in addition to the finance director. \n \nFS 2014-001 Control Category: \nInternal Control Impact: Compliance Impact: \n \nInadequate Internal Control Procedures Cash and Cash Equivalents Investments General Ledger Capital Assets Significant Deficiency None \n \nFinding Status: \n \nPartially Resolved \n \nAll bank reconciliations will be done in a timely manner with at least two (three for the main cash accounts) staff members reviewing the reconciliation. For the GA Fund cash account, a copy of the monthly Georgia Treasury statement will be included to support the ending fund ledger balance. There has been no formal bank reconciliation form included because there are no checks written from this account-only a monthly deposit and a semi-annual withdrawal. For the NE Georgia Bank account, there has been no formal reconciliation because there are no checks written out of this account and the ending balance equals the general ledger. For the Bus Driver Bank account, the transportation director will review and sign off the reconciliation completed by the transportation bookkeeper. Capital asset additions and deletions will be reviewed and signed off by the assistant superintendent before they are entered into the system by the finance director to provide separation of duties for the Capital Asset module. \n \n- 1 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2017 \n \nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \n \nFS 2015-001 Control Category: \nInternal Control Impact: Compliance Impact: \n \nInadequate Internal Control Procedures Cash and Cash Equivalents Investments Revenues/Receivables/Receipts Employee Compensation General Ledger Capital Assets Accounting System Significant Deficiency None \n \nFinding Status: \n \nPartially Resolved \n \nAll bank accounts will be performed in a timely manner with at least two staff members approving the reconciliation. Receipts received at the central office are opened, processed and then recorded by a different staff member for adequate separation of duties. All journal entries will be signed off by the superintendent. All capital asset additions and deletions will be reviewed by the assistant superintendent before the finance director records them. One method of strengthening the financial statement reporting process will be having a third party contractor assist and review the financial statements at year end. \n \nFS 2016-001 Control Category: \nInternal Control Impact: Compliance Impact: \n \nControl Procedures at the Central Office Cash and Cash Equivalents Capital Assets Significant Deficiency None \n \nFinding Status: \n \nUnresolved \n \nAll bank statements will be reconciled monthly. Also, Matt Adams will review changes to the capital asset listing for additional assurance for accuracy and to maintain a separation of duties. \n \nPRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \n \nFA 2015-001 Compliance Category: Internal Control Impact: Compliance Impact: Federal Award Agency: CFDA Number and Title: \n \nInadequate Controls over Equipment Equipment and Real Property Management Significant Deficiency Nonmaterial Noncompliance U.S. Department of Agriculture 10.553 and 10.555 Child Nutrition Cluster \n \nFinding Status: \n \nUnresolved \n \nA new spreadsheet will be created to record all required descriptions of inventory. In addition, the food service staff will retagged all equipment to make sure all equipment is recorded. \n \n- 2 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2017 \n \nPRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \n \nFA 2016-001 Compliance Category: Internal Control Impact: Compliance Impact: Federal Award Agency: Pass-Through Entity: CFDA Number and Title: Federal Award Numbers: Questioned Costs: \n \nControls over Equipment Equipment and Real Property Management Significant Deficiency Nonmaterial Noncompliance U.S. Department of Agriculture Georgia Department of Education 10.553 and 10.555 Child Nutrition Cluster 16165GA324N1099 None Identified \n \nFinding Status: \n \nUnresolved \n \nNew tags for equipment will be purchased and applied to all equipment. This will strengthen the physical controls on equipment and their financial reporting. \n \n- 3 - \n \n SECTION IV FINDINGS AND QUESTIONED COSTS \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2017 \nI SUMMARY OF AUDITOR'S RESULTS \n \nFinancial Statements \n \nType of auditor's report issue: Governmental Activities; General Fund; Capital Projects Fund; Debt Service Fund; Aggregate Remaining Fund Information \n \nUnmodified \n \nInternal control over financial reporting: \n \n Material weaknesses identified? \n \nYes \n \n Significant deficiency identified? \n \nNo \n \nNoncompliance material to financial statements noted: \n \nNo \n \nFederal Awards \n \nInternal Control over major programs:  Material weakness identified?  Significant deficiency identified? \n \nNo None Reported \n \nType of auditor's report issued on compliance for major programs: All major programs \n \nUnmodified \n \nAny audit findings disclosed that are required to be reported in \n \naccordance with 2 CFR 200.516(a)? \n \nNo \n \nIdentification of major programs: \n \nCFDA Numbers \n \nName of Federal Program or Cluster \n \n84.010 84.371 \n \nTitle I Grants to Local Educational Agencies Striving Readers \n \nDollar threshold used to distinguish between Type A and Type B programs: \n \n$750,000.00 \n \nAuditee qualified as low-risk auditee? \n \nNo \n \n- 1 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2017 \n \nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \n \nFS 2017-001 Control Category: Internal Control Impact: Compliance Impact: \n \nFinancial Reporting Process Financial Reporting Material Weakness None \n \nDescription: The School District did not have adequate internal controls in place over the financial statement reporting process. \n \nCriteria: Management is responsible for having adequate controls over the preparation of the financial statements in accordance with generally accepted accounting principles (GAAP). The School District's internal controls over GAAP financial reporting should include adequately trained personnel with the knowledge, skills and experience to prepare GAAP based financial statements and include all disclosures as required by the Governmental Accounting Standards Board (GASB). \n \nGASB Statement No. 34, Basic Financial Statements  Management's Discussion and Analysis  for State and Local Governments (Statement), requires governments to present government-wide and fund financial statements as well as a summary reconciliation of the (a) total governmental funds balances to the net position of governmental activities in the Statement of Net Position, and (b) total change in governmental fund balances to the change in net position of governmental activities in the Statement of Activities. In addition, the Statement requires information about the government's major and nonmajor funds in the aggregate, to be provided in the fund financial statements. \n \nChapter II  Section 2, Annual Financial Reporting of the Financial Management for Georgia Local Units of Administration provides that School Districts must prepare their financial statements in accordance with generally accepted accounting principles. \n \nCondition: The following errors and omissions were noted in the School District's financial statements, note disclosures and schedules as presented for audit: \n \n A material audit adjustment totaling $223,164.00 was proposed and accepted by the client to correctly record contracts and retainage payable in the capital projects fund. \n A material audit adjustment totaling $21,953.97 was proposed and accepted by the client to correctly record certificate of deposit in the agency fund. \n A material audit adjustment totaling $1,915,414.00 was proposed and accepted by the client to correctly record deferred outflows related to pension plans, deferred inflows related to pension plans, and pension expense. \n An audit adjustment totaling $778,433.68 was proposed and accepted by the client to correctly record accounts receivable, and revenue. \n Numerous other audit adjustments and reclassification entries were proposed and accepted by management to properly present the School District's financial statements, notes to the financial statements and schedules. \n \nCause: In discussing these deficiencies with the School District, they indicated the errors occurred due to oversights in preparing the financial statements. \n \n- 2 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2017 \nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \nEffect or Potential Effect: Material misstatements were included in the financial statements presented for audit. The lack of controls and monitoring could impact the reporting of the School District's financial position and results of operations. Numerous adjustments were necessary in order for the School District's financial statements to be in conformity with generally accepted accounting principles (GAAP). \nRecommendation: The School District should strengthen their internal controls and preparation and review procedures over financial reporting to ensure that the financial statements, including disclosures and schedules, presented for audit are complete and accurate. These procedures should be performed by a properly trained individual(s) possessing a thorough understanding of GAAP, the applicable GASB pronouncements and knowledge of the School District's activities and operations. The School District should also consider implementing the use of a review checklist to assist in the review process over the financial statements. \nViews of Responsible Officials: \n \nFS 2017-002 Control Category: \nInternal Control Impact: Compliance Impact: Repeat of Prior Year Finding: \n \nInternal Controls at the Central Office Cash and Cash Equivalents Revenues/Receivables/Receipts Expenditures/Liabilities/Disbursements Capital Assets Material Weakness None FS 6591-13-01, FS 2014-001, FS 2015-001, and FS 2016-001 \n \nDescription: The accounting procedures of the School District were insufficient to provide for adequate internal controls at the Central Office. \n \nCriteria: The School District's management is responsible for designing and maintaining an adequate system of internal controls that provide reasonable assurance that transactions are processed according to established procedures. Such internal controls would limit any one individual's access to both physical assets and the related accounting records. \n \nCondition: Cash and Cash Equivalents \n The School District did not provide a reconciliation of total cash which agreed to the financial statements. \n The September 2016 bank reconciliation of the Franklin County Middle School account was not prepared until April 14, 2017 and the June 2017 bank reconciliation of the operating account was not prepared until August 21, 2017 which is not considered timely. \n One bank reconciliation lacked evidence of review and paper approval.  The School District recorded cash transactions in the amount of $461,681.48 as accounts \npayable at June 30th.  The School District did not properly maintain their cash by bank and fund.  Controls were not in place to ensure that the internally pooled cash accounts net to zero. \n \n- 3 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2017 \nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \nRevenues/Receivables/Receipts  The School District could not provide a listing of accounts receivable by person/project/vendor at June 30th.  Journal entries were posted incorrectly causing misstatements to state accounts receivable, Federal accounts receivable, Federal revenue, beginning fund balance, and unavailable revenue.  The School District did not adequately separate the duties of initiating, authorizing, and recording of revenues. \nExpenditures/Liabilities/Disbursements  The School District was unable to provide an accounts payable listing that agreed to the financial statements at June 30th.  The School District was unable to provide a listing of funds held for others that agreed to the financial statements at June 30th. \nCapital Assets  The School District did not adequately separate the duties of initiating, authorizing, and recording transactions, reconciliations, and maintaining the custody of capital assets. \nCause: These issues were a result of oversights by entity personnel, lack of separation of duties, and internal control procedures within their finance department. \nEffect or Potential Effect: Without satisfactory accounting controls and procedures in place, the School District could place itself in a position where potential misappropriation of assets could occur. In addition, the lack of controls impacted its reporting of financial position and results of operations. \nRecommendation: The School District should review accounting procedures in place and design and implement procedures relative to the above control categories to strengthen the internal controls over the accounting functions. Management should ensure proper separation of duties exists. In the case when management determines that separation of duties is not cost beneficial, management should implement compensating controls that assist in assuring that transactions are properly processed and reported. \nViews of Responsible Officials: \nIII FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \nNo matters were reported. \n- 4 - \n \n SECTION V MANAGEMENT'S CORRECTIVE ACTION \n \n Franklin County School System \n \nChris Forrer Superintendent \n \n\"Preparing Students for the Challenges of Tomorrow\" \n(706) 384-4554 Fax (706) 384-7472 \n \nCORRECTIVE ACTION PLANS - FINANCIAL STATEMENT FINDINGS \n \nFS 2017-001 Control Category: Internal Control Impact: Compliance Impact: \n \nFinancial Reporting Process Financial Reporting Material Weakness None \n \nThe School District did not have adequate internal controls in place over the financial statement reporting process. \n \nCorrective Action Plans: A third party consultant will be employed to assist and review in the preparation of the financial statements. This will provide another level of assurance of accuracy and adherence to proper GAAP standards. \n \nEstimated Completion Date: July 2018 \n \nContact Person: Tom Porter Telephone: 706-384-4554; E-mail: tom.porter@franklin.k12.ga.us \n \nFS 2017-002 Control Category: \nInternal Control Impact: Compliance Impact: Repeat of Prior Year Finding: \n \nInternal Controls at the Central Office Cash and Cash Equivalents Revenues/Receivables/Receipts Expenditures/Liabilities/Disbursements Capital Assets Material Weakness None FS-6591-13-01, FS 2014-001, FS 2015-001, and FS 2016-001 \n \nThe accounting procedures of the School District were insufficient to provide for adequate internal controls at the Central Office. \n \nCorrective Action Plans: In the event of long absences by a bookkeeper, timely reconciliation of bank statements at the school level will be achieved by the financial director temporarily completing the reconciliation to prevent long periods between reconciliations. At year end, electronic payment of payroll taxes will be properly recorded as cash payments when the general ledger reflects payment in the preceding month. A schedule of cash by fund and bank will be maintained. The internally pooled cash accounts will be monitored each month to ensure that they net to zero. A separate schedule will be created and maintained to list all accounts receivable by person/project/vendor. \n \nEstimated Completion Date: June 2019 \n \nContact Person: Tom Porter Telephone: 706-384-4554; E-mail: tom.porter@franklin.k12.ga.us \n280 Busha Road  Carnesville, Georgia 30521 www.franklin.k12.ga.us \nThe Franklin County School System does not discriminate on the basis of sex, race, religion, age, national origin, marital status, or handicapping conditions. \n \n Franklin County School System \n\"Preparing Students for the Challenges of Tomorrow\" \nCORRECTIVE ACTION PLANS  FEDERAL AWARD FINDINGS No matters were reported. \n280 Busha Road  Carnesville, Georgia 30521 www.franklin.k12.ga.us \nThe Franklin County School System does not discriminate on the basis of sex, race, religion, age, national origin, marital status, or handicapping conditions. \n \n "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-be26-bf8-b2016-belec-p-btext","title":"Franklin County Board of Education, Carnesville, Georgia, annual financial report for the fiscal year ended 2016 June 30 (including independent auditor's reports)","collection_id":"dlg_ggpd","collection_title":"Georgia Government Publications","dcterms_contributor":["Georgia. Department of Audits and Accounts, issuing body."],"dcterms_spatial":["United States, Georgia, 32.75042, -83.50018"],"dcterms_creator":["Georgia. Department of Audits and Accounts"],"dc_date":["2017-08-08"],"dcterms_description":["Financial report of the Franklin County Board of Education."],"dc_format":["application/pdf"],"dcterms_identifier":null,"dcterms_language":["eng"],"dcterms_publisher":["Atlanta, Ga. : Georgia. Department of Audits and Accounts"],"dc_relation":null,"dc_right":["http://rightsstatements.org/vocab/InC/1.0/"],"dcterms_is_part_of":null,"dcterms_subject":["Franklin County Board of Education (Ga.)--Appropriations and expenditures--Periodicals","Education--Georgia--Franklin County--Auditing--Periodicals","Education--Georgia--Franklin County--Finance--Statistics--Periodicals"],"dcterms_title":["Franklin County Board of Education, Carnesville, Georgia, annual financial report for the fiscal year ended 2016 June 30 (including independent auditor's reports)"],"dcterms_type":["Text"],"dcterms_provenance":["University of Georgia. Map and Government Information Library"],"edm_is_shown_by":["https://dlg.galileo.usg.edu/do:dlg_ggpd_y-ga-ba800-b-pr1-be26-bf8-b2016-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-be26-bf8-b2016-belec-p-btext"],"dcterms_temporal":null,"dcterms_rights_holder":null,"dcterms_bibliographic_citation":null,"dlg_local_right":null,"dcterms_medium":["annual reports","state government records","audits","financial records","financial statements"],"dcterms_extent":null,"dlg_subject_personal":null,"iiif_manifest_url_ss":null,"dcterms_subject_fast":null,"fulltext":"FRANKLIN COUNTY BOARD OF EDUCATION \nCARNESVILLE, GEORGIA \nANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2016 \n(Including Independent Auditor's Reports) \n \n FRANKLIN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \n \nSECTION I \n \nFINANCIAL \n \nINDEPENDENT AUDITOR'S REPORT \n \nREQUIRED SUPPLEMENTARY INFORMATION \n \nMANAGEMENT'S DISCUSSION AND ANALYSIS \n \nEXHIBITS \n \nBASIC FINANCIAL STATEMENTS \n \nGOVERNMENT-WIDE FINANCIAL STATEMENTS \n \nA \n \nSTATEMENT OF NET POSITION \n \nB \n \nSTATEMENT OF ACTIVITIES \n \nFUND FINANCIAL STATEMENTS \n \nC \n \nBALANCE SHEET \n \nGOVERNMENTAL FUNDS \n \nD \n \nRECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \n \nTO THE STATEMENT OF NET POSITION \n \nE \n \nSTATEMENT OF REVENUES, EXPENDITURES AND CHANGES \n \nIN FUND BALANCES \n \nGOVERNMENTAL FUNDS \n \nF \n \nRECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT \n \nOF REVENUES, EXPENDITURES AND CHANGES IN FUND \n \nBALANCES TO THE STATEMENT OF ACTIVITIES \n \nG \n \nSTATEMENT OF FIDUCIARY NET POSITION \n \nFIDUCIARY FUNDS \n \nH NOTES TO THE BASIC FINANCIAL STATEMENTS \n \nPage \ni \n1 2 4 5 6 7 8 9 \n \nSCHEDULES \n \nREQUIRED SUPPLEMENTARY INFORMATION \n \n1 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY \n \nTEACHERS RETIREMENT SYSTEM OF GEORGIA \n \n29 \n \n2 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY \n \nPUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA \n \n30 \n \n3 SCHEDULE OF CONTRIBUTIONS  TEACHERS RETIREMENT SYSTEM OF GEORGIA \n \n31 \n \n4 NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION \n \n32 \n \n5 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES \n \nIN FUND BALANCES - BUDGET AND ACTUAL \n \nGENERAL FUND \n \n33 \n \n (This page left intentionally blank) \n \n FRANKLIN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \n \nSECTION I \nFINANCIAL \nSCHEDULES \nSUPPLEMENTARY INFORMATION \n6 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 7 SCHEDULE OF STATE REVENUE 8 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \n \nPage \n34 35 37 \n \nSECTION II \nCOMPLIANCE AND INTERNAL CONTROL REPORTS \nINDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS \nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE \n \nSECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS \n \nSECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS \n \nSECTION V MANAGEMENT'S CORRECTIVE ACTION SCHEDULE OF MANAGEMENT'S CORRECTIVE ACTION \n \n (This page left intentionally blank) \n \n SECTION I FINANCIAL \n \n (This page left intentionally blank) \n \n Greg S. Griffin \nSTATE AUDITOR \n(404) 656-2174 \n \nDEPARTMENT OF AUDITS AND ACCOUNTS \n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \nAugust 8, 2017 \n \nHonorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education \nand Superintendent and Members of the Franklin County Board of Education \nINDEPENDENT AUDITOR'S REPORT \nLadies and Gentlemen: \nReport on the Financial Statements \nWe have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Franklin County Board of Education (School District), as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the School District's basic financial statements as listed in the table of contents. \nManagement's Responsibility for the Financial Statements \nManagement is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. \nAuditor's Responsibility \nOur 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 Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. \nAn audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also \n \n (This page left intentionally blank) \n \n includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. \nWe believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. \nOpinions \nIn our opinion, the basic financial statements referred to above 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 School District, as of June 30, 2016, and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. \nEmphasis of Matter \nAs described in Note 2 to the financial statements, in 2016, the School District adopted new accounting guidance, Governmental Accounting Standards Board (GASB) Statement No. 72, Fair Value Measurement and Application, GASB Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets that are not within the Scope of GASB Statement No. 68, and Amendments to Certain Provisions of GASB Statements No. 67 and 68, and GASB Statement No. 79, Certain External Investment Pools and Pool Participants. Our opinions are not modified with respect to this matter. \nOther Matters \nRequired Supplementary Information \nAccounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis, Schedules of Proportionate Share of the Net Pension Liability, Schedule of Contributions to Retirement Systems, Notes to the Required Supplementary Information and the Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual as presented on pages i through viii and pages 29 through 33 respectively, 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 regarding 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 our 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. \nOther Information \nOur audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the School District's basic financial statements. The accompanying supplementary information, consisting of Schedules 6 through 8, is presented for the purposes of additional analysis and is not a required part of the basic financial statements. The Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by Title 2 \n \n (This page left intentionally blank) \n \n U. S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is also not a required part of the basic financial statements. \nThe accompanying supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic 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 basic financial statements as a whole. \nOther Reporting Required by Government Auditing Standards \nIn accordance with Government Auditing Standards, we have also issued our report dated August 8, 2017, on our consideration of the School District'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 internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the School District's internal control over financial reporting and compliance. \nA 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. \nRespectfully submitted, \nGreg S. Griffin State Auditor \n \n (This page left intentionally blank) \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 \nINTRODUCTION \nThe discussion and analysis of the Franklin County Board of Education's (the School District) financial performance provides an overview of the School District's financial activities for the fiscal years ended June 30, 2016 and June 30, 2015. The intent of this discussion and analysis is to look at the School District's financial performance as a whole. Readers should also review the financial statements and the notes to the basic financial statements to enhance their understanding of the School District's financial performance. \nFINANCIAL HIGHLIGHTS \nKey financial highlights for the fiscal years 2016 and 2015 are as follows: \n The School District had $35,898,470 and $35,597,893 in expenses relating to governmental activities for the fiscal years ended June 30, 2016 and June 30, 2015, respectively. Only $23,803,902 and $22,024,291 of the above mentioned expenses for 2016 and 2015 were offset by program specific charges for services, grants and contributions. General revenues (primarily property and sales taxes) of $16,130,737 and $15,415,926, respectively, for 2016 and 2015, along with fund balance were adequate to provide for these programs. \n The general fund (the primary operating fund), presented on a current financial resource basis, ended the fiscal year with a fund balance of $5,058,342, an increase of $1,455,639 from the June 30, 2015 fund balance of $3,602,703. \nOVERVIEW OF THE FINANCIAL STATEMENTS \nThis annual report consists of three parts; management's discussion and analysis (this section), the basic financial statements including notes to the basic financial statements and supplementary information. The basic financial statements include two levels of statements that present different views of the School District. These include the government-wide and fund financial statements. \nThe government-wide financial statements include the `Statement of Net Position' and `Statement of Activities'. These statements provide information about the activities of the School District presenting both short-term and long-term information about the overall financial status. \nThe fund financial statements focus on individual parts, reporting the School District's operation in more detail. The Governmental Funds statements disclose how basic services are financed in the short-term as well as what remains for future spending. The Fiduciary Funds statements provide information about the financial relationships in which the School District acts solely as a trustee or agent for the benefit of others. \nThe fund financial statements reflect the School District's most significant funds. For the years ending June 30, 2016 and 2015, the general fund, the capital projects fund, and the debt service fund represent the most significant funds. \nThe financial statements also include notes that explain some of the information in the statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and supports the financial statements. Additionally, other supplementary information (not required) is also presented that further supplements understanding of the financial statements. \ni \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 \nGovernment-wide Statements \nThe government-wide statements report information about the School District as a whole using accounting methods similar to those used by private-sector companies. The `Statement of Net Position' includes all of the School District's assets and liabilities. All of the current fiscal year's revenues and expenses are accounted for in the `Statement of Activities' regardless of when cash is received or paid. \nThe two government-wide statements report the School District's net position and how it has changed. Net position, the difference between the School District's assets and deferred outflows of resources, and liabilities and deferred inflows of resources, are one way to measure the School District's overall financial health or position. Over time, increases or decreases in net position are an indication of whether its financial health is improving or deteriorating. Changes may be the result of many factors, including those not under the School District's control, such as the property tax base, facility conditions, required educational programs and other factors. \nIn the `Statement of Net Position' and the `Statement of Activities', the School District has one distinct type of activity: \n Governmental Activities  All of the School District's programs and services are reported here including instruction, support services, operation and maintenance of plant, pupil transportation, food service, student activity accounts and various others. \nFund Financial Statements \nThe School District's fund financial statements provide detailed information about the most significant funds, not the School District as a whole. Some funds are required by State law and some by bond requirements. The School District's major governmental funds are the general fund, the capital projects fund, and the debt service fund. \nGovernmental Funds - Most of the School District's activities are reported in governmental funds, which focus on the determination of financial position and change in financial position, not on income determination. These funds are reported using the modified accrual method of accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the School District's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance educational programs. The relationship (or differences) between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds are reconciled to the financial statements. \nFiduciary Funds - The School District is the trustee, or fiduciary, for assets that belong to others, such as school clubs and organizations within the principals' accounts. The School District is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. The School District excludes these activities from the governmentwide financial statements because it cannot use these assets to finance its operations. \nii \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 \n \nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT AS A WHOLE \nRecall that the Statement of Net Position provides the perspective of the School District as a whole. Table 1 provides a summary of the School District's net position for fiscal years 2016 and 2015. \n \nTable 1 Net Position \n \nGovernmental Activities \n \nFiscal \n \nFiscal \n \nYear 2016 \n \nYear 2015 \n \nAssets Current and Other Assets Capital Assets, Net \n \n$ \n \n13,880,213 $ 13,678,374 \n \n64,668,621 \n \n65,027,275 \n \nTotal Assets \n \n78,548,834 \n \n78,705,649 \n \nDeferred Outflows of Resources \n \n3,107,768 \n \n2,338,991 \n \nTotal Assets and Deferred Outflows of Resources \n \n81,656,602 \n \n81,044,640 \n \nLiabilities Current and Other Liabilities Long-Term Liabilities \n \n31,819,326 5,371,508 \n \n27,402,865 8,197,261 \n \nTotal Liabilities \n \n37,190,834 \n \n35,600,126 \n \nDeferred Inflows of Resources \n \n2,869,701 \n \n7,884,616 \n \nTotal Liabilities and Deferred Inflows of Resources \n \n40,060,535 \n \n43,484,742 \n \nNet Position Net Investment in Capital Assets Restricted Unrestricted \nTotal Net Position \n \n61,458,431 2,508,645 \n(22,371,009) \n \n58,377,893 3,853,744 \n(24,671,739) \n \n$ \n \n41,596,067 $ 37,559,898 \n \nTotal liabilities and deferred inflows of resources decreased by $3,424,207. The combination of the increase in total assets and deferred outflows of resources and the decrease in total liabilities and deferred inflows of resources yielded an increase in net position of $4,036,169. \n \niii \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 \n \nTable 2 shows the changes in net position for fiscal years ending June 30, 2016 and June 30, 2015. \n \nTable 2 Change in Net Position \n \nRevenues Program Revenues: Charges for Services Operating Grants and Contributions Capital Grants and Contributions \n \nGovernmental Activities \n \nFiscal Year \n \nFiscal Year \n \n2016 \n \n2015 \n \n$ \n \n463,660 $ \n \n540,326 \n \n23,185,802 \n \n21,157,410 \n \n154,440 \n \n326,555 \n \nTotal Program Revenues \n \n23,803,902 \n \n22,024,291 \n \nGeneral Revenues: Taxes Property Taxes For Maintenance and Operations Sales Taxes Special Purpose Local Option Sales Tax For Debt Services Other Sales Tax Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous \nSpecial Items Loss on Disposal of Capital Assets \n \n10,396,066 \n3,123,869 386,587 \n1,386,907 28,510 \n808,798 \n- \n \n10,250,537 \n3,314,494 155,379 \n1,154,671 27,972 \n661,682 \n(148,809) \n \nTotal General Revenues and Special Items \n \n16,130,737 \n \n15,415,926 \n \nTotal Revenues \n \n39,934,639 \n \n37,440,217 \n \nProgram Expenses: 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 Other Support Services Operations of Non-Instructional Services Enterprise Operations Food Services Interest on short-term and long-term debt \n \n22,546,588 \n1,314,576 1,673,651 \n507,992 501,230 2,025,622 318,999 2,189,140 2,483,036 303,986 \n325,845 1,629,811 \n77,994 \n \n22,387,945 \n1,237,309 1,360,917 \n546,228 537,240 2,026,798 281,845 2,414,408 2,165,454 277,573 \n356,287 1,821,868 \n184,021 \n \nTotal Expenses \n \n35,898,470 \n \n35,597,893 \n \nIncrease in Net Position \n \n$ \n \n4,036,169 $ \n \n1,842,324 \n \niv \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 \n \nGeneral revenues increased by $566,002 during fiscal year 2016. The increases are due to increases in miscellaneous revenue and higher local property revenue. \nGovernmental Activities \nThe Statement of Activities shows the cost of program services and the charges for services and grants offsetting those services. Table 3 shows the total cost of services and the net cost of services. Net cost of services can be defined as the total cost less fees generated by the activities and intergovernmental revenue provided for specific programs. The net cost reflects the financial burden on the School District's taxpayers by each activity. \n \nTable 3 Governmental Activities \n \nTotal Cost of Services \n \nFiscal \n \nFiscal \n \nYear 2016 \n \nYear 2015 \n \nNet Cost of Services \n \nFiscal \n \nFiscal \n \nYear 2016 \n \nYear 2015 \n \nInstruction \n \n$ \n \n22,546,588 $ 22,387,945 $ \n \n5,670,316 $ \n \n7,185,055 \n \nSupport Services: \n \nPupil Services \n \n1,314,576 \n \n1,237,309 \n \n1,033,480 \n \n965,003 \n \nImprovement of Instructional Services \n \n1,673,651 \n \n1,360,917 \n \n864,243 \n \n689,515 \n \nEducational Media Services \n \n507,992 \n \n546,228 \n \n28,044 \n \n67,224 \n \nGeneral Administration \n \n501,230 \n \n537,240 \n \n(125,937) \n \n(135,247) \n \nSchool Administration \n \n2,025,622 \n \n2,026,798 \n \n980,882 \n \n994,803 \n \nBusiness Administration \n \n318,999 \n \n281,845 \n \n316,763 \n \n278,806 \n \nMaintenance and Operation of Plant \n \n2,189,140 \n \n2,414,408 \n \n1,086,005 \n \n1,300,183 \n \nStudent Transportation Services \n \n2,483,036 \n \n2,165,454 \n \n1,644,411 \n \n1,340,974 \n \nOther Support Services \n \n303,986 \n \n277,573 \n \n235,217 \n \n222,335 \n \nOperations of Non-Instructional Services: \n \nEnterprise Operations \n \n325,845 \n \n356,287 \n \n196,899 \n \n233,599 \n \nFood Services \n \n1,629,811 \n \n1,821,868 \n \n86,250 \n \n247,331 \n \nInterest on Short-Term and Long-Term Debt \n \n77,994 \n \n184,021 \n \n77,994 \n \n184,021 \n \nTotal Expenses \n \n$ \n \n35,898,470 $ 35,597,893 $ 12,094,567 $ 13,573,602 \n \nAlthough program revenues make up a majority of the funding, the School District is still dependent upon tax revenues for governmental activities. For 2016, 34.65% of instruction and support activities were supplemented by taxes and other general revenues compared to 38.84% in 2015. \n \nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT'S FUNDS \nThe School District's governmental funds are accounted for using the modified accrual basis of accounting. The governmental funds had total revenues of $40,013,176 and total expenses of $39,438,816. There was an increase in the fund balance totaling $574,360 for the governmental funds as a whole. Higher revenue from increase state funding through QBE and an increase in local revenue from the improving economy are principally responsible for the change \n \nv \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 \n \nGeneral Fund Budgeting Highlights \nThe School District's budget is prepared according to Georgia Law. The most significant budgeted fund is the general fund, funded primarily through state revenue and local property tax revenue. During the course of fiscal years 2016 and 2015, the School District amended its general fund budget as needed. \nDuring fiscal year 2016 the general fund had final actual revenues totaling $36,882,112, which represented an increase from the original budgeted amount of $31,754,203 by $5,127,909. This difference (final actual versus original budget) was due in part to increased federal funding of $2,986,933 not included in the original budget. \nFinal actual expenditures during fiscal year 2016 totaling $35,426,474 represented an increase from the original budgeted amount of $31,892,203 by $3,534,271. The increase in actual expenditures versus original budget expenditures was due primarily to food service operation expenditures not being included in the original budget. \nCAPITAL ASSETS \nAt the fiscal years ended June 30, 2016 and June 30, 2015, the School District had $64,668,621 and $65,207,274 respectively, invested in capital assets, net of accumulated depreciation. These assets are made up of a broad range of capital assets, including land; buildings; transportation, food service and maintenance equipment. Table 4 reflects a summary of these balances, by class, net of accumulated depreciation. \n \nTable 4 Capital Assets (Net of Depreciation) \n \nGovernmental Activities \n \nFiscal \n \nFiscal \n \nYear 2016 \n \nYear 2015 \n \nLand Construction In Progress Building and Improvements Equipment Land Improvements Intangible Assets \n \n$ \n \n1,338,157 $ \n \n1,338,157 \n \n- \n \n500,231 \n \n54,022,795 \n \n54,072,534 \n \n2,172,911 \n \n1,993,446 \n \n7,091,963 \n \n7,065,943 \n \n42,795 \n \n56,963 \n \nTotal \n \n$ \n \n64,668,621 $ \n \n65,027,274 \n \nThe overall capital assets decreased in fiscal year 2016 by $358,653 due to the deletion of various capital assets and the increase of accumulated depreciation associated with the capital assets. \n \nvi \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 \n \nLONG-TERM LIABILITIES \nAt June 30, 2016, the School District had $5,371,509 in total long-term liabilities with $2,775,754 due within one year. Table 5 summarizes long-term liabilities at June 30, 2016 and 2015. \n \nTable 5 Long-Term Liabilities at June 30 \n \nGovernmental Activities \n \nFiscal \n \nFiscal \n \nYear 2016 \n \nYear 2015 \n \nBonds Payable Unamortized Bond Premiums \n \n$ \n \n4,920,000 $ \n \n7,520,000 \n \n451,508 \n \n677,262 \n \nTotal \n \n$ \n \n5,371,508 $ \n \n8,197,262 \n \nCURRENT ISSUES \nThe cost of the employer portion of health insurance premiums for non-certified employees is expected to add another $100,000 for fiscal year 2017 and $200,000 for future years. In addition, revenues will again be cut as the State of Georgia imposes another QBE Austerity Reduction expected to cost the School District approximately $1.1 million in earned revenue. The grand total of revenue lost since the cuts began in 2003 is more than $23.0 million. In spite of these hardships, the School District has restored the local supplement, given all staff a 3% increase in pay for fiscal year 2017 and added numerous teaching positions to help combat increasing class sizes. \n \nApproximately 85% of general fund expenses, the main operating fund for the School District, were related to salaries and employee benefits for the year ended June 30, 2016. More than a third of certified personnel in the School District have 21 years or more of experience resulting in salaries at the highest possible state pay level. With such personnel heavy expenses, it is difficult to offset mandated expense increases such as TRS and health insurance premium expenses. The School District consistently evaluates how funds can be spent smarter and more effectively to ensure that County students receive a quality education from effective personnel. \nThe School District's millage rate for fiscal year 2016 was 18.618. The net digest was relatively flat during fiscal years 2015 and 2014, ending a string of several years where it decreased annually. The net digest for fiscal year 2015 was $545 million, which produced approximately $550,000 per mill. \nThe most significant challenge facing the School District is the relative uncertainty regarding how School Districts will be funded moving forward. The General Assembly is in the process of exploring new funding formulas that would likely cement in the austerity reductions received annually and change the way personnel salaries are calculated. It is uncertain at this point what type of financial impact these changes might have on the School District's finances. \n \nvii \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 CONTACTING THE SCHOOL DISTRICT'S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, investors and creditors with a general overview of the School District's finances and to show the School District's accountability for the money it receives. If you have questions about this report or need additional financial information, contact Tom Porter at the Franklin County Board of Education, 280 Busha Road, Carnesville, GA 30521. You may also email your questions to tom.porter@franklin.k12.ga.us. \nviii \n \n FRANKLIN COUNTY BOARD OF EDUCATION \n \n (This page left intentionally blank) \n \n         FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2016 \n \nEXHIBIT \"H\" \n \nNOTE 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY \nREPORTING ENTITY \nThe Franklin County Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a board elected by the voters and a Superintendent appointed by the Board. The School District 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. \nNOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES \nThe accompanying financial statements of the School District have been prepared in conformity with generally accepted accounting principles (GAAP) as prescribed by the Governmental Accounting Standards Board (GASB). GASB is the accepted standard-setting body for governmental accounting and financial reporting principles. The most significant of the School District's accounting policies are described below. \nBASIS OF PRESENTATION \nThe School District's basic financial statements are collectively comprised of the government-wide financial statements, fund financial statements and notes to the basic financial statements. The government-wide statements focus on the School District as a whole, while the fund financial statements focus on major funds. Each presentation provides valuable information that can be analyzed and compared between years and between governments to enhance the information's usefulness. \nGOVERNMENT-WIDE STATEMENTS: \nThe Statement of Net Position 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. \nThe Statement of Net Position presents the School District's non-fiduciary assets and liabilities, with the difference reported as net position. Net position is reported in three categories as follows: \n1. Net investment in capital assets consists of the School District's total investment in capital assets, net of accumulated depreciation, and reduced by outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of net investment in capital assets. \n2. Restricted net position consists of resources for which the School District is legally or contractually obligated to spend in accordance with restrictions imposed by external third parties or imposed by law through constitutional provisions or enabling legislation. \n3. Unrestricted net position consists of resources not meeting the definition of the two preceding categories. Unrestricted net positon often has constraints on resources imposed by management which can be removed or modified. \nThe Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities. \nDirect expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of 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. \n \n- 9 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2016 \n \nEXHIBIT \"H\" \n \nProgram 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. \nFUND FINANCIAL STATEMENTS \nThe 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 financial statements are presented for governmental and fiduciary funds. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column. \nThe School District reports the following major governmental funds: \n The general fund is the School District's primary operating fund. It accounts for and reports all financial resources not accounted for and reported in another fund. \n The capital projects fund accounts for and reports financial resources including Education \nSpecial Purpose Local Option Sales Tax (ESPLOST) and Bond Proceeds that are restricted, committed or assigned for capital outlay expenditures, including the acquisition or construction of capital facilities and other capital assets. \n The debt service fund accounts for and reports financial resources that are restricted, committed, or assigned including taxes (sales) legally restricted for the payment of general long-term principal and interest. \nThe School District reports the following fiduciary fund type: \n Agency funds are used to report resources held by the School District in a purely custodial capacity (assets equal liabilities) and do not involve measurement of results of operations. \nBASIS OF ACCOUNTING \nThe basis of accounting determines when transactions are reported on the financial statements. The government-wide 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 is recognized in the fiscal year in which all eligibility requirements have been satisfied. \nThe 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. \nGovernmental 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. The School District considers all intergovernmental revenues to be available if they are collected within 120 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, except for principal and interest on general long- \n \n- 10 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2016 \n \nEXHIBIT \"H\" \n \nterm debt, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities are reported as other financing sources. \nThe 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. \nNEW ACCOUNTING PRONOUNCEMENTS \nIn fiscal year 2016, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 72, Fair Value Measurement and Application. This statement addresses accounting and financial reporting issues related to fair value measurements. The definition of fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This statement provides guidance for determining a fair value measurement for financial reporting purposes. This statement also provides guidance for applying fair value to certain investments and disclosures related to all fair value measurements. The School District did not have any items that required a reassessment of value for reporting purposes as a result of adoption of this statement. \nIn fiscal year 2016, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets that are not within the Scope of GASB Statement No. 68, and Amendments to Certain Provisions of GASB Statements No. 67 and 68. This statement establishes requirements for defined benefit pensions that are not within the scope of Statement No. 68, Accounting and Financial Reporting for Pensions, as well as for the assets accumulated for purposes of providing those pensions. In addition, it establishes requirements for defined contribution pensions that are not within the scope of Statement No. 68. It also amends certain provisions of Statement No. 67, Financial Reporting for Pension Plans, and Statement No. 68 for pension plans and pensions that are within their respective scopes. The adoption of this statement does not have a significant impact on the School District's financial statements. \nIn fiscal year 2016, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 79, Certain External Investment Pools and Pool Participants. This statement addresses accounting and financial reporting for certain external investment pools and pool participants. If an external investment pool meets the criteria in this statement and measures all of its investments at amortized cost, the pool's participants also should measure their investments in that external investment pool at amortized cost for financial reporting purposes. The School District participates in an external investment pool, the State of Georgia local government investment pool (Georgia Fund 1), which does not meet the criteria of this statement. Therefore, the investment in this pool is measured at fair value as provided in paragraph 11 of GASB Statement No. 31, as amended. \nCASH AND CASH EQUIVALENTS \nCash and cash equivalents consist of cash on hand, demand deposits, investments in the State of Georgia local government investment pool (Georgia Fund 1) 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 (O.C.G.A.) 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. \n \n- 11 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2016 \n \nEXHIBIT \"H\" \n \nINVESTMENTS \nThe School District can invest its funds as permitted by O.C.G.A. 36-83-4. 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. \nInvestments made by the School District in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest earning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. All other investments are reported at fair value. \nFor accounting purposes, certificates of deposit are classified as investments if they have an original maturity greater than three months when acquired. \nRECEIVABLES \nReceivables 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. \nINVENTORIES \nFood Inventories \nOn 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 (calculated on the first-in first-out basis). 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. \nPREPAID ITEMS \nPayments made to vendors for services that will benefit future accounting periods are recorded as prepaid items, in both the government-wide and governmental fund financial statements. \nCAPITAL ASSETS \nOn the government-wide financial statements, capital assets are recorded 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 acquisition value on the date donated. 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. The School District does not capitalize book collections or works of art. \nCapital acquisition and construction are recorded as expenditures in the governmental fund financial statements at the time of purchase (including ancillary charges), and the related assets are reported as capital assets in the governmental activities column in the government-wide financial statements. \nDepreciation is computed using the straight-line for all assets, except land, and is used to allocate the actual or estimated historical cost of capital assets over estimated useful lives. \n \n- 12 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2016 \n \nEXHIBIT \"H\" \n \nCapitalization thresholds and estimated useful lives of capital assets reported in the government-wide statements are as follows: \n \nCapitalization Policy \n \nEstimated Useful Life \n \nLand \n \nAny Amount \n \nLand Improvements \n \n$ \n \n10,000.00 \n \nBuildings and Improvements $ \n \n20,000.00 \n \nEquipment \n \n$ \n \n5,000.00 \n \nIntangible Assets \n \n$ \n \n20,000.00 \n \nN/A 20 to 80 years 25 to 80 years \n5 to 50 years Estimated Life \n \nDEFERRED OUTFLOWS/INFLOWS OF RESOURCES \nIn addition to assets, the statement of financial position will report a separate section for deferred outflows of resources. This separate financial statement element, represents a consumption of resources that applies to a future period(s) and therefore will not be recognized as an outflow of resources (expense/expenditure) until then. \n \nIn addition to liabilities, the statement of financial position will report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of resources that applies to a future period(s) and therefore will not be recognized as an inflow of resources (revenue) until that time. \n \nLONG-TERM LIABILITIES AND BOND DISCOUNTS/PREMIUMS \nIn the School District's government-wide financial statements, outstanding debt is reported as liabilities. Bond premiums and discounts and the difference between the reacquisition price and the net carrying value of refunded debt are deferred and amortized over the life of the bonds using the straight-line method. To conform to generally accepted accounting principles, bond premiums and discounts should be amortized using the effective interest method. The effect of this deviation is deemed to be immaterial to the fair presentation of the basic financial statements. Bond issuance costs are recognized as an outflow of resources in the fiscal year in which the bonds are issued. \n \nIn the governmental fund financial statements, the School District recognizes the proceeds of debt and premiums as other financing sources of the current period. Bond issuance costs are reported as debt service expenditures. \n \nPENSIONS \nFor purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the pension plan's fiduciary net position and additions to/deductions from the plan's fiduciary net position have been determined on the same basis as they are reported by the plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. \n \nFUND BALANCES \nFund balance for governmental funds is reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. \n \n- 13 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2016 \n \nEXHIBIT \"H\" \n \nThe School District's fund balances are classified as follows: \nNonspendable consists of resources that cannot be spent either because they are in a nonspendable form or because they are legally or contractually required to be maintained intact. \nRestricted consists of resources that can be used only for specific purposes pursuant constraints either (1) externally imposed by creditors, grantors, contributors, or laws and regulations of other governments or (2) imposed by law through constitutional provisions or enabling legislation. \nCommitted consists of resources that can be used only for specific purposes pursuant to constraints imposed by formal action of the Board. The Board is the School District's highest level of decisionmaking authority, and the formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution approved by the Board. Committed fund balance also should incorporate contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements. \nAssigned consists of resources constrained by the School District's intent to be used for specific purposes, but are neither restricted nor committed. The intent should be expressed by (1) the Board or (2) the budget or finance committee, or the Superintendent, or designee, to assign amounts to be used for specific purposes. \nUnassigned consists of resources within the general fund not meeting the definition of any aforementioned category. The general fund should be the only fund that reports a positive unassigned fund balance amount. In other governmental funds, it may be necessary to report a negative unassigned fund balance. \nUSE OF ESTIMATES \nThe 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. \nPROPERTY TAXES \nThe Franklin County Board of Commissioners adopted the property tax levy for the 2015 tax digest year (calendar year) on July 28, 2015 (levy date) based on property values as of January 1, 2015. Taxes were due on November 15, 2015 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2015 tax digest are reported as revenue in the governmental funds for fiscal year 2016. The Franklin County Board of Commissioners bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2016, for maintenance and operations amounted to $9,599,238.16. \nThe tax millage rate levied for the 2015 tax year (calendar year) for the School District was as follows (a mill equals $1 per thousand dollars of assessed value): \n \nSchool Operations \n \n18.618 mills \n \nAdditionally, Title Ad Valorem Tax revenues, at the fund reporting level, amounted to $810,872.62 during fiscal year ended June 30, 2016. \n \n- 14 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2016 \n \nEXHIBIT \"H\" \n \nSALES TAXES \nEducation Special Purpose Local Option Sales Tax (ESPLOST), at the fund reporting level, during the year amounted to $3,123,868.79 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years. \nNOTE 3: BUDGETARY DATA \nThe budget is a complete financial plan for the School District's fiscal year, and is based upon careful estimates of expenditures together with probable funding sources. The budget is legally adopted each year for the general, debt service, and capital projects funds. There is no statutory prohibition regarding over expenditure of the budget at any level. The budget for all governmental funds, except the various school activity (principal) accounts, is prepared and adopted by fund, function and object. The legal level of budgetary control was established by the Board at the aggregate function level. The budget for the general fund was prepared in accordance with accounting principles generally accepted in the United States of America. \nThe budgetary process begins with the School District's administration presenting an initial budget for the Board's review. The administration makes revisions as necessary based on the Board's guidelines, and a tentative budget is approved. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality, as well as the School District's website. At the next regularly scheduled meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final budget. The approved budget is then submitted, in accordance with provisions of O.C.G.A. 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end. \nSee the General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances  Budget to Actual in the Supplementary Information Section for a detail of any over/under expenditures during the fiscal year under review. \nNOTE 4: DEPOSITS AND CASH EQUIVALENTS \nCOLLATERALIZATION OF DEPOSITS \nO.C.G.A.  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% 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.  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 110% of the daily pool balance. \nAcceptable security for deposits consists of any one of or any combination of the following: \n(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, \n(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, \n(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia, \n(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, \n(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, \n- 15 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2016 \n \nEXHIBIT \"H\" \n \n(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and \n \n(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. \n \nCATEGORIZATION OF DEPOSITS \nCustodial 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, 2016, the School District had deposits with a carrying amount of $7,631,996.36, and a bank balance of $6,903,605.69. The bank balances insured by Federal depository insurance were $771,918.85 and the bank balances collateralized with securities held by the pledging financial institution in the School District's name were $6,056,105.62. \n \nAt June 30, 2016, $75,581.22 of the School District's bank balances were exposed to custodial credit risk as follows: \n \nUninsured and Uncollateralized Uninsured with collateral held by the pledging \nfinancial institution Uninsured with collateral held by the pledging \nfinancial institution's trust department or agent but not in the School District's name \n \n$ \n \n- \n \n- \n \n75,581.22 \n \nTotal \n \n$ \n \n75,581.22 \n \nReconciliation of cash and cash equivalents balances to carrying value of deposits: \n \nStatement of Net Position \n \nCash and cash equivalents \n \n$ \n \nStatement of Fiduciary Net Position \n \nCash and cash equivalents \n \nTotal cash and cash equivalents \n \nAdd: Deposits with original maturity of three months or more reported as investments \n \nLess: Investment pools reported as cash and cash equivalents \nGeorgia Fund 1 \n \nTotal carrying value of deposits - June 30, 2016 \n \n$ \n \n9,920,593.88 198,681.14 \n10,119,275.02 22,905.71 \n2,510,184.37 7,631,996.36 \n \n- 16 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2016 \n \nEXHIBIT \"H\" \n \nCATEGORIZATION OF CASH EQUIVALENTS \nThe School District reported cash equivalents of $2,510,184.37 in Georgia Fund 1, a local government investment pool. Georgia Fund 1 is not registered with the SEC as an investment company and does not operate in a manner consistent with the SEC's Rule 2a-7 of the Investment Company Act of 1940. The investment is valued at the pool's share price, $1.00 per share, which approximates fair value. The pool is an AAAf rated investment pool by Standard and Poor's. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2016, was 42 days. \nGeorgia Fund 1, administered by the State of Georgia, Office of the State Treasurer, is not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office of the State Treasurer for the Georgia Fund 1, does not provide for investment in derivatives or similar investments. Additional information on the Georgia Fund 1 is disclosed in the State of Georgia Comprehensive Annual Financial Report. This audit can be obtained from the Georgia Department of Audits and Accounts at www.audits.ga.gov/SGD/CAFR.html. \nNOTE 5: CAPITAL ASSETS \nThe following is a summary of changes in the capital assets for governmental activities during the fiscal year: \n \nGovernmental Activities Capital Assets, Not Being Depreciated: \nLand Construction in Progress \nTotal Capital Assets Not Being Depreciated \nCapital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements Intangible Assets \nLess Accumulated Depreciation for: Buildings and Improvements Equipment Land Improvements Intangible Assets \nTotal Capital Assets, Being Depreciated, Net \nGovernmental Activity Capital Assets - Net \n \nBalances July 1, 2015 \n \nIncreases \n \nDecreases \n \nTransfers \n \nBalances June 30, 2016 \n \n$ 1,338,157.39 $ 500,231.00 \n1,838,388.39 \n \n- $ - \n- \n \n- $ \n \n- $ 1,338,157.39 \n \n- \n \n(500,231.00) \n \n- \n \n- \n \n(500,231.00) \n \n1,338,157.39 \n \n63,627,694.48 5,869,190.94 8,157,163.07 141,285.31 \n \n280,005.00 515,196.02 162,236.00 \n- \n \n221,600.00 \n- \n \n500,231.00 - \n \n64,407,930.48 6,162,786.96 8,319,399.07 141,285.31 \n \n9,555,160.43 3,875,744.57 1,091,219.94 \n84,322.64 \n \n829,975.10 335,731.66 136,216.65 \n14,167.24 \n \n221,600.00 \n- \n \n- \n \n10,385,135.53 \n \n- \n \n3,989,876.23 \n \n- \n \n1,227,436.59 \n \n- \n \n98,489.88 \n \n63,188,886.22 \n \n(358,653.63) \n \n- \n \n500,231.00 \n \n63,330,463.59 \n \n$ 65,027,274.61 $ (358,653.63) $ \n \n- $ \n \n- $ 64,668,620.98 \n \n- 17 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2016 \n \nEXHIBIT \"H\" \n \nCurrent year depreciation expense by function is as follows: \n \nInstruction Support Services \nEducational Media Services School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Food Services \n \n$ \n \n16,432.17 \n \n48,021.48 \n \n17,824.56 \n \n25,580.71 \n \n199,609.32 \n \n$ 914,253.56 \n307,468.24 94,368.85 \n$ 1,316,090.65 \n \nNOTE 6: LONG-TERM LIABILITIES The changes in long-term liabilities during the fiscal year for governmental activities, were as follows: \n \nBalance July 1, 2015 \n \nAdditions \n \nGovernmental Activities \n \nBalance \n \nDeductions \n \nJune 30, 2016 \n \nDue Within One Year \n \nGeneral Obligation Bonds Unamortized Bond Premiums \n \n$ 7,520,000.00 $ 677,261.66 \n \n- $ 2,600,000.00 $ 4,920,000.00 $ 2,550,000.00 \n \n- \n \n225,753.88 \n \n451,507.78 \n \n225,753.88 \n \n$ 8,197,261.66 $ \n \n- $ 2,825,753.88 $ 5,371,507.78 $ 2,775,753.88 \n \nGENERAL OBLIGATION DEBT OUTSTANDING \nThe School District's bonded debt consists of various issues of general obligation bonds that are generally callable with interest payable semiannually. Bond proceeds primarily pay for acquiring or constructing capital facilities. The School District repays general obligation bonds from voter-approved property taxes. General obligation bonds are direct obligations and pledge the full faith and credit of the School District. \n \nDuring the current year, the School District authorized $13,395,000.00 in general obligation debt. \n \nOf the total amount authorized, $16,275,000.00 remains unissued. General obligation bonds currently outstanding are as follows: \n \nDescription \n \nInterest Rates \n \nIssue Date \n \nMaturity Date \n \nAmount Issued \n \nAmount Outstanding \n \nGeneral Government - Series 2012 \n \n3.00% - 5.00% \n \n7/11/2012 \n \n3/1/2018 $ 12,120,000.00 $ 4,920,000.00 \n \n- 18 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2016 \n \nEXHIBIT \"H\" \n \nThe following schedule details debt service requirements to maturity for the School District's total general obligation bonds payable: \n \nFiscal Year Ended June 30: \n \nGeneral Obligation Debt \n \nPrincipal \n \nInterest \n \nUnamortized Bond Premium \n \n2017 2018 \n \n$ \n \n2,550,000.00 $ \n \n2,370,000.00 \n \n215,775.00 \n \n$ \n \n88,275.00 \n \n225,753.88 225,753.90 \n \nTotal Principal and Interest \n \n$ \n \n4,920,000.00 $ \n \n304,050.00 \n \n$ \n \n451,507.78 \n \nNOTE 7: RISK MANAGEMENT \nINSURANCE \nCommercial Insurance \nThe 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; and natural disasters. Except as described below, the School District carries commercial insurance for these risks. Settled claims resulting from these insured risks have not exceed commercial insurance coverage in any of the past three fiscal years. \nGeorgia School Boards Association Risk and Insurance Management System \nThe School District participates in the Georgia School Boards Association Risk and Insurance Management System (the System), a public entity risk pool organized on July 1, 1994, to develop and administer a plan to reduce risk of loss on account of general liability, motor vehicle liability, or property damage, including safety engineering and other loss prevention and control techniques, and to administer one or more groups of self-insurance funds, including the processing and defense of claims brought against members of the system. The School District pays an annual premium to the System for its general insurance coverage. Additional coverage is provided through agreements by the System with other companies according to their specialty for property, boiler and machinery (including coverage for flood and earthquake), general liability (including coverage for sexual harassment, molestation and abuse), errors and omissions, crime and automobile risks. Payment of excess insurance for the System varies by line of coverage. \nWORKERS' COMPENSATION \nGeorgia School Boards Association Workers' Compensation Fund \nThe School District participates in the Georgia School Boards Association Workers' Compensation Fund (the Fund), a public entity risk pool organized on July 1, 1992, 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 Fund for its Workers' Compensation insurance coverage. Excess insurance coverage is provided through an agreement by the Fund with the Safety National Casualty Corporation to provide coverage for potential losses sustained by the Fund in excess of $550 thousand loss per occurrence, up to the statutory limit. Employers' Liability insurance coverage is also provided by Safety National Casualty Corporation to provide coverage for potential losses sustained by the Fund in excess of $550 thousand loss per occurrence, up to $2.0 million. In addition to the $550,000.00 per occurrence retention, the Fund also retains an additional $200,000.00 per year corridor retention. \n \n- 19 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2016 \n \nEXHIBIT \"H\" \n \nUNEMPLOYMENT COMPENSATION \nThe School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the general fund with expenses/expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. \nChanges in the unemployment compensation claims liability during the last two fiscal years are as follows: \n \nBeginning of Year Liability \n \nClaims and Changes in Estimates \n \nClaims Paid \n \nEnd of Year Liability \n \n2015 \n \n$ \n \n- \n \n$ \n \n990.00 \n \n$ \n \n990.00 \n \n$ \n \n- \n \n2016 \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \nSURETY BOND The School District purchased a surety bond to provide additional insurance coverage as follows: \n \nPosition Covered \n \nAmount \n \nSuperintendent \n \n$ \n \n100,000.00 \n \nNOTE 8: FUND BALANCE CLASSIFICATION DETAILS \nThe School District's financial statements include the following amounts presented in the aggregate at June 30, 2016: \n \nNonspendable Inventories Prepaid Assets \nRestricted Continuation of Federal Programs Capital Projects Debt Service \nCommitted School Activity Accounts \nUnassigned \n \n$ \n \n39,958.76 \n \n2,431.83 $ \n \n281,191.00 1,011,713.95 1,530,420.94 \n \n42,390.59 \n2,823,325.89 413,656.65 \n4,322,490.47 \n \nFund Balance, June 30, 2016 \n \n$ \n \n7,601,863.60 \n \nWhen multiple categories of fund balance are available for expenditure, the School District will start with the most restricted category and spend those funds first before moving down to the next category with available funds. \nIt is the goal of the School District to achieve and maintain a committed, assigned, and unassigned fund balance in the general fund at fiscal year-end of not less than 5% of revenues not to exceed 15% of the total budget of the subsequent fiscal year, in compliance with O.C.G.A. 20-2.167(a)5. If the unassigned fund balance at fiscal year-end falls below the goal, the School District shall develop a restoration plan to achieve and maintain the minimum fund balance. \n \n- 20 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2016 \n \nEXHIBIT \"H\" \n \nNOTE 9: SIGNIFICANT CONTINGENT LIABILITIES \nFEDERAL GRANTS \nAmounts 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. Any disallowances resulting from the grantor audit may become a liability of the School District. However, the School District believes that such disallowances, if any, will be immaterial to its overall financial position. \nLITIGATION \nThe School District is a defendant in various legal proceedings pertaining to 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 have a material adverse effect on the financial condition of the School District. \nNOTE 10: POST-EMPLOYMENT BENEFITS \nGEORGIA SCHOOL PERSONNEL POST-EMPLOYMENT HEALTH BENEFIT FUND \nPlan 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 Fund provides health insurance benefits to eligible former employees and their qualified beneficiaries through the State Employees Health Benefit Plan administered by the Department of Community Health. The Official Code of Georgia Annotated (O.C.G.A.) 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). Additional information about the School OPEB Fund is disclosed in the State of Georgia Comprehensive Annual Financial Report. This report can be obtained from the Georgia Department of Audits and Accounts at www.audits.ga.gov/SGD/CAFR.html. \nFunding 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. For members with fewer than five years of service as of January 1, 2012, contributions also vary based on years of service. On average, members with five years or more of service as of January 1, 2012 pay approximately 25% of the cost of the health insurance coverage. In accordance with the Board resolution dated December 8, 2011, for members with fewer than five years of service as of January 1, 2012, the State provides a premium subsidy in retirement that ranges from 0% for fewer than 10 years of service to 75% (but no greater than the subsidy percentage offered to active employees) for 30 or more years of service. The subsidy for eligible dependents ranges from 0% to 55% (but no greater than the subsidy percentage offered to dependents of active employees minus 20%). No subsidy is available to Medicare eligible members not enrolled in a Medicare Advantage Option. The Board of Community Health sets all member premiums by resolution and in accordance with the law and applicable revenue and expense projections. Any subsidy policy adopted by the Board may be changed at any time by Board resolution and does not constitute a contract or promise of any amount of subsidy. \nParticipating 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 \"payas-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. \n- 21 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2016 \n \nEXHIBIT \"H\" \n \nThe 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, 2016: \n \nFor certificated teachers, librarians and regional educational service agencies and certain other eligible participants: \n \nJuly 1, 2015  June 30, 2016 \n \n$945.00 per member per month \n \nFor non-certificated school personnel: \n \nJuly 1, 2015  December 31, 2016 $596.20 per member per month \n \nJanuary 1, 2016  June 30, 2016 $746.20 per member per month \n \nNo additional contribution was required by the Board for fiscal year 2016 nor contributed to the School OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the School plan for other post-employment benefits and are subject to appropriation. \n \nThe School District's combined active and retiree contributions to the health insurance plans, which equaled the required contribution, for the current fiscal year and the preceding two fiscal years were as follows: \n \nFiscal Year \n \nPercentage Contributed \n \nRequired Contribution \n \n2016 2015 2014 \n \n100% \n \n$ \n \n100% \n \n$ \n \n100% \n \n$ \n \n4,167,767.78 3,898,024.90 3,805,385.33 \n \nNOTE 11: RETIREMENT PLANS \nThe School District participates in various retirement plans administered by the State of Georgia, as further explained below. \nTEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) \nPlan Description: All teachers of the School District as defined in O.C.G.A 47-3-60 and certain other support personnel as defined by 47-3-63 are provided a pension through the Teachers Retirement System of Georgia (TRS). TRS, a cost-sharing multiple-employer defined benefit pension plan, is administered by the TRS Board of Trustees (TRS Board). Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. The Teachers Retirement System of Georgia issues a publicly available separate financial audit report that can be obtained at www.trsga.com/publications. \nBenefits Provided: TRS provides service retirement, disability retirement, and death benefits. Normal retirement benefits are determined as 2% of the average of the employee's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. An employee is eligible for normal service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. Ten years of service is required for disability and death benefits eligibility. Disability benefits are based on the employee's creditable service and compensation up to the time of disability. Death benefits equal the amount that would be payable to the employee's beneficiary had the employee retired on the date of death. Death benefits are based on the employee's creditable service and compensation up to the date of death. \n \n- 22 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2016 \n \nEXHIBIT \"H\" \n \nContributions: Per Title 47 of the O.C.G.A., contribution requirements of active employees and participating employers, as actuarially determined, are established and may be amended by the TRS Board. Pursuant to O.C.G.A. 47-3-63, the employer contributions for certain full-time public school support personnel are funded on behalf of the employer by the State of Georgia. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees were required to contribute 6% of their annual pay during fiscal year 2016. The School District's contractually required contribution rate for the year ended June 30, 2016 was 14.27% of annual School District payroll, of which 14.05% of payroll was required from the School District and 0.22% of payroll was required from the State. For the current fiscal year, employer contributions to the pension plan were $2,613,592.63 and $39,878.72 from the School District and the State, respectively. \nPUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM (PSERS) \nP lan description: PSERS is a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly in 1969 for the purpose of providing retirement allowances for public school employees who are not eligible for membership in the Teachers Retirement System of Georgia. The ERS Board of Trustees, plus two additional trustees, administers PSERS. Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. PSERS issues a publicly available financial report that can be obtained at www.ers.ga.gov/formspubs/formspubs. \nBenefits provided: A member may retire and elect to receive normal monthly retirement benefits after completion of ten years of creditable service and attainment of age 65. A member may choose to receive reduced benefits after age 60 and upon completion of ten years of service. \nUpon retirement, the member will receive a monthly benefit of $14.75, multiplied by the number of years of creditable service. Death and disability benefits are also available through PSERS. Additionally, PSERS may make periodic cost-of-living adjustments to the monthly benefits. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contribution, the member forfeits all rights to retirement benefits. \nContributions: The general assembly makes an annual appropriation to cover the employer contribution to PSERS on behalf of local school employees (bus drivers, cafeteria workers, and maintenance staff). The annual employer contribution required by statute is actuarially determined and paid directly to PSERS by the State Treasurer in accordance with O.C.G.A. 47-4-29(a) and 60(b). Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. \nIndividuals who became members prior to July 1, 2012 contribute $4 per month for nine months each fiscal year. Individuals who became members on or after July 1, 2012 contribute $10 per month for nine months each fiscal year. The State of Georgia, although not the employer of PSERS members, is required by statute to make employer contributions actuarially determined and approved and certified by the PSERS Board of Trustees. The current fiscal year contribution was $70,377.00. \n \n- 23 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2016 \n \nEXHIBIT \"H\" \n \nPension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions \nAt June 30, 2016, the School District reported a liability of $25,651,843.00 for its proportionate share of the net pension liability for TRS. \nThe TRS net pension liability reflected a reduction for support provided to the School District by the State of Georgia for certain public school support personnel. The amount recognized by the School District as its proportionate share of the net pension liability, the related State of Georgia support, and the total portion of the net pension liability that was associated with the School District were as follows: \n \nSchool District's proportionate share of the net pension liability \n \n$ 25,651,843.00 \n \nState of Georgia's proportionate share of the net pension liability associated with the School District \n \n413,180.00 \n \nTotal \n \n$ 26,065,023.00 \n \nThe net pension liability for TRS was measured as of June 30, 2015. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2014. An expected total pension liability as of June 30, 2015 was determined using standard roll-forward techniques. The School District's proportion of the net pension liability was based on contributions to TRS during the fiscal year ended June 30, 2015. \nAt June 30, 2015, the School District's TRS proportion was 0.168496%, which was an increase of 0.003591% from its proportion measured as of June 30, 2014. \nAt June 30, 2016, the School District did not have a PSERS liability for a proportionate share of the net pension liability because of a Special Funding Situation with the State of Georgia, which is responsible for the net pension liability of the plan. The amount of the State's proportionate share of the net pension liability associated with the School District is $291,284.00. \nThe PSERS net pension liability was measured as of June 30, 2015. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2014. An expected total pension liability as of June 30, 2015 was determined using standard roll-forward techniques. The State's proportion of the net pension liability associated with the School District was based on actuarially determined contributions paid by the State during the fiscal year ended June 30, 2015. \nFor the year ended June 30, 2016, the School District recognized pension expense of $1,699,373.00 for TRS and $17,371.00 for PSERS and revenue of $51,364.00 for TRS and $17,371.00 for PSERS. The revenue is support provided by the State of Georgia. For TRS the State of Georgia support is provided only for certain support personnel. \n \n- 24 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2016 \n \nEXHIBIT \"H\" \n \nAt June 30, 2016, the School District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: \n \nTRS \n \nDeferred Outflows of Resources \n \nDeferred Inflows of Resources \n \nDifferences between expected and actual experience \n \n$ \n \n- \n \n$ 225,621.00 \n \nNet difference between projected and actual earnings on pension plan investments \n \n- \n \n2,163,760.00 \n \nChanges in proportion and differences between School District contributions and proportionate share of contributions \n \n494,175.00 \n \n480,320.00 \n \nSchool District contributions subsequent to the measurement date \n \n2,613,592.63 \n \n- \n \nTotal \n \n$ 3,107,767.63 $ 2,869,701.00 \n \nThe School District contributions subsequent to the measurement date of $2,613,592.63 for TRS are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ended June 30, 2017. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: \n \nYear Ended June 30: \n \nTRS \n \n2017 2018 2019 2020 2021 \n \n$ (1,082,093.00) \n \n$ (1,082,093.00) \n \n$ (1,082,095.00) \n \n$ 857,967.00 \n \n$ \n \n12,788.00 \n \nActuarial assum ptions: The total pension liability as of June 30, 2015 was determined by an actuarial valuation as of June 30, 2014, using the following actuarial assumptions, applied to all periods included in the measurement: \n \nTeachers Retirement System: \nInflation \n \n3.00% \n \nSalary increases Investment rate of return \n \n3.75%  7.00%, average, including inflation \n7.50%, net of pension plan investment expense, including inflation \n \nMortality rates were based on the RP-2000 Combined Mortality Table for Males or Females set back two years for males and set back three years for females. \nThe actuarial assumptions used in the June 30, 2014 valuation were based on the results of an actuarial experience study for the period July 1, 2004  June 30, 2009. \n \n- 25 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2016 \n \nEXHIBIT \"H\" \n \nPublic School Employees Retirement System: \n \nInflation \n \n3.00% \n \nSalary increases Investment rate of return \n \nN/A \n7.50%, net of pension plan investment expense, including inflation \n \nMortality rates were based on the RP-2000 Combined Mortality Table set forward one year for males for the period after service retirement, for dependent beneficiaries, and for deaths in active service, and the RP-2000 Disabled Mortality Table set back two years for males and set forward one year for females for the period after disability retirement. \n \nThe actuarial assumptions used in the June 30, 2014 valuation were based on the results of an actuarial experience study for the period July 1, 2004  June 30, 2009. \n \nThe long-term expected rate of return on TRS and PSERS pension plan investments was determined \n \nusing a log-normal distribution analysis in which best-estimate ranges of expected future real rates of \n \nreturn (expected returns, net of pension plan investment expense and inflation) are developed for \n \neach major asset class. These ranges are combined to produce the long-term expected rate of return \n \nby weighting the expected future real rates of return by the target asset allocation percentage and by \n \nadding expected inflation. The target asset allocation and best estimates of arithmetic real rates of \n \nreturn for each major asset class are summarized in the following table: \n \nLong-term \n \nTarget \n \nexpected real \n \nAsset class \n \nallocation \n \nrate of return* \n \nFixed income Domestic large stocks Domestic mid stocks Domestic small stocks International developed market stocks International emerging market stocks \n \n30.00% 39.70% \n3.70% 1.60% 18.90% 6.10% \n \n3.00% 6.50% 10.00% 13.00% 6.50% 11.00% \n \nTotal \n \n100.00% \n \n* Rates shown are net of the 3.00% assumed rate of inflation \n \nDiscount rate: The discount rate used to measure the total TRS and PSERS pension liability was 7.50%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and nonemployer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the TRS and PSERS pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. \n \n- 26 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2016 \n \nEXHIBIT \"H\" \n \nSensitivity of the School District's proportionate share of the net pension liability to changes in the discount rate: The following presents the School District's proportionate share of the net pension liability calculated using the discount rate of 7.50%, as well as what the School District's proportionate share of the net pension liability would be if it were calculated using a discount rate that \nis 1-percentage-point lower (6.50%) or 1-percentage-point higher (8.50%) than the current rate: \n \nTeachers Retirement System: \n \n1% Decrease (6.50%) \n \nCurrent Discount Rate (7.50%) \n \n1% Increase (8.50%) \n \nSchool District's proportionate share of the net pension liability \n \n$ 44,080,752.00 $ \n \n25,651,843.00 $ 10,462,036.00 \n \nPension plan fiduciary net position: Detailed information about the pension plan's fiduciary net position is available in the separately issued TRS and PSERS financial report which is publically \navailable at www.trsga.com/publications and http://www.ers.ga.gov/formspubs/formspubs.html. \n \nDEFINED CONTRIBUTION PLAN \nThe Franklin County Board of Education participates in an employer paid 403(b) annuity plan for the group of employees covered under the Public School Employees Retirement System (PSERS). Recognizing that PSERS was a limited defined contribution and defined benefit plan which did not provide for an adequate retirement for this group of employees, it was the Board's desire to supplement the retirement of this group. \n \nThe School District selected Lincoln as the provider of this plan. For each employee covered under PSERS, the Board contributes to the plan an amount equal to the amount contributed by the employee not to exceed $25.00 per employee per month. \nThe employee becomes vested in the plan with 5 years of experience. Employees who had already achieved 5 years of experience at the time the plan was implemented were vested upon enrollment. \n \nFunds accumulated in the employer paid accounts are only available to the employee upon termination of employment and 5 years of service to Franklin County Board of Education. If an employee terminates employment prior to 5 years of service, funds paid on behalf of the non-vested employee are credited back to the School District. \n \nEmployer contribution for the current fiscal year and the preceding two fiscal years are as follows: \n \nFiscal Year \n \nPercentage Contributed \n \nRequired Contribution \n \n2016 2015 2014 \n \n100% \n \n$ \n \n100% \n \n$ \n \n100% \n \n$ \n \n14,285.00 14,205.00 15,540.00 \n \n- 27 - \n \n (This page left intentionally blank) \n \n        (This page left intentionally blank) \n \n  (This page left intentionally blank) \n \n SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS \n \n (This page left intentionally blank) \n \n Greg S. Griffin \nSTATE AUDITOR \n(404) 656-2174 \n \nDEPARTMENT OF AUDITS AND ACCOUNTS \n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \nAugust 8, 2017 \n \nHonorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education \nand Superintendent and Members of the Franklin County Board of Education \nREPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH \nGOVERNMENT AUDITING STANDARDS \nINDEPENDENT AUDITOR'S REPORT \nLadies and Gentlemen: \nWe have audited, 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, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Franklin County Board of Education (School District) as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the School District's basic financial statements, and have issued our report thereon dated August 8, 2017. \nInternal Control Over Financial Reporting \nIn planning and performing our audit of the financial statements, we considered the School District's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the School District's internal control. Accordingly, we do not express an opinion on the effectiveness of the School District's internal control. \nA 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. A significant deficiency is a deficiency, or a 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. \nOur consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies \n \n (This page left intentionally blank) \n \n may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. We did identify a certain deficiency in internal control, described in the accompanying Schedule of Findings and Questioned Costs as item FS 2016-001 that we consider to be a significant deficiency. \nCompliance and Other Matters \nAs part of obtaining reasonable assurance about whether the School District's financial statements are free from 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. \nSchool District's Response to Findings \nThe School District's response to the finding identified in our audit is described in the accompanying Schedule of Findings and Questioned Costs. The School District's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. \nPurpose of this Report \nThe purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the School District's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the School District's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. \nRespectfully submitted, \nGreg S. Griffin State Auditor \n \n (This page left intentionally blank) \n \n Greg S. Griffin \nSTATE AUDITOR \n(404) 656-2174 \n \nDEPARTMENT OF AUDITS AND ACCOUNTS \n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \nAugust 8, 2017 \n \nHonorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education \nand Superintendent and Members of the Franklin County Board of Education \n \nREPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE \n \nINDEPENDENT AUDITOR'S REPORT \n \nLadies and Gentlemen: \n \nReport on Compliance for Each Major Federal Program \n \nWe have audited Franklin County Board of Education's (School District) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2016. The School District's major federal programs are identified in the Summary of Auditor's Results section of the accompanying Schedule of Findings and Questioned Costs. \n \nManagement's Responsibility \n \nManagement is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. \n \nAuditor's Responsibility \n \nOur responsibility is to express an opinion on compliance for each of the School District's major federal programs based on our audit of the types of compliance requirements referred to above. 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 the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance 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 School District's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. \n \nWe believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the School District's compliance. \n \n (This page left intentionally blank) \n \n Opinion on Each Major Federal Program \nIn our opinion, the School District complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2016. \nReport on Internal Control over Compliance \nManagement of the School District is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the School District's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, 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 School District's internal control over compliance. \nA 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 compliance 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. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. \nOur 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 material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, we identified a certain deficiency in internal control over compliance, as described in the accompanying Schedule of Findings and Questioned Costs as item FA 2016-001, that we consider to be a significant deficiency. \nThe School District's response to the internal control over compliance finding identified in our audit is described in the accompanying Schedule of Findings and Questioned Costs. The School District's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. \nThe purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. \nRespectfully submitted, \nGreg S. Griffin State Auditor \n \n (This page left intentionally blank) \n \n SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS \n \n (This page left intentionally blank) \n \n FRANKLIN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2016 \n \nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \n \nFS-6591-13-01 Inadequate Internal Controls \n \nControl Category: \nInternal Control Impact: Compliance Impact: \n \nCash and Cash Equivalents Expenditures/Liabilities/Disbursements Revenues/Receivables/Receipts General Ledger Capital Assets Material Weakness None \n \nFinding Status: \n \nPartially Resolved \n \nWe have implemented procedures to ensure all bank reconciliations are completed in a timely manner. The main cash accounts are completed within a month and reviewed and signed off by two staff members in addition to the finance director. Changes to the capital assets list will be reviewed and signed off by the assistant superintendent for improved separation of duties. These changes were implemented by September 2016. \n \nFS 2014-001 Inadequate Internal Control Procedures \n \nControl Category: \nInternal Control Impact: Compliance Impact: \n \nCash and Cash Equivalents Investments General Ledger Capital Assets Significant Deficiency None \n \nFinding Status: \n \nPartially Resolved \n \nWe have implemented procedures to ensure all bank reconciliations are done in a timely manner with at least two (three for the main cash accounts) staff members reviewing the reconciliation. For the Georgia Fund cash account, a copy of the monthly Georgia Treasury statement is included to support the ending fund ledger balance. There is no formal bank reconciliation form included because there are no checks written from this account  only a monthly deposit and a semi-annual withdrawal. Capital asset additions and deletions are reviewed and signed off by the assistant superintendent before they are entered into the system by the finance director to provide separation of duties for the Capital Assets module. These changes were implemented by September 2016. \n \n- 1 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2016 \n \nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \n \nFS 2015-001 Inadequate Internal Control Procedures \n \nControl Category: \nInternal Control Impact: Compliance Impact: \n \nCash and Cash Equivalents Investments Revenues/Receivables/Receipts Employee Compensation General Ledger Capital Assets Accounting System Significant Deficiency None \n \nFinding Status: \n \nPartially Resolved \n \nWe have implemented procedures to ensure all bank accounts are performed in a timely manner with at least two staff members approving the reconciliation. Receipts received at the central office are opened, processed and then recorded by a different staff member for adequate separation of duties. All journal entries are signed off by the Superintendent. All capital asset additions and deletions are reviewed by the assistant superintendent before the finance director records them. These changes were implemented by September 2016. \n \nFS 2015-002 Inadequate Internal Controls over the Financial Reporting \n \nControl Category: Internal Control Impact: Compliance Impact: \n \nFinancial Reporting Material Weakness None \n \nFinding Status: \n \nFurther Action Not Warranted (1) \n \n(1) Findings/internal control deficiencies of this nature, that are not deemed significant deficiencies or material weaknesses and do not require reporting in the audit report in accordance with Statements on Auditing Standards (SAS) 122 or Governmental Auditing Standards (Yellow Book), will be \ncommunicated in a management letter. \n \nPRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \n \nFA 2014-001 Inadequate Internal Control Procedures \n \nCompliance Requirement: \nInternal Control Impact: Compliance Impact: Federal Award Agency: CFDA Number and Title: \n \nActivities Allowed/Unallowed Allowable Costs/Cost Principles Significant Deficiency Nonmaterial Noncompliance U.S. Department of Agriculture 10.553 and 10.555 Child Nutrition Cluster \n \nFinding Status: \n \nPreviously Reported Corrective Action Implemented \n \n- 2 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2016 \n \nPRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \n \nFA 2015-001 Inadequate Controls over Equipment \n \nCompliance Requirement: Internal Control Impact: Compliance Impact: Federal Award Agency: CFDA Number and Title: \n \nEquipment and Real Property Management Significant Deficiency Nonmaterial Noncompliance U.S. Department of Agriculture 10.553 and 10.555 Child Nutrition Cluster \n \nFinding Status: \n \nPartially Resolved \n \nSince the fiscal year 2016 audit, a new spreadsheet was created to record all required descriptions of inventory. The new inventory list describes the equipment in detail in compliance with all State and Federal rules. The Director of Food Services and her staff have completed an extensive inventory of food service equipment and have tagged all equipment. \n \nFA 2015-002 Inadequate Internal Control Procedures \n \nCompliance Requirement: Internal Control Impact: Compliance Impact: Federal Award Agency: CFDA Number and Title: \n \nActivities Allowed or Unallowed Significant Deficiency Nonmaterial Noncompliance U.S. Department of Agriculture 10.553 and 10.555 Child Nutrition Cluster \n \nFinding Status: \n \nPreviously Reported Corrective Action Implemented \n \n- 3 - \n \n (This page left intentionally blank) \n \n SECTION IV FINDINGS AND QUESTIONED COSTS \n \n (This page left intentionally blank) \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2016 \n \nI SUMMARY OF AUDITOR'S RESULTS \n \nFinancial Statements \n \nType of auditor's report issue: Governmental Activities; General Fund; Capital Projects Fund; Debt Service Fund; Aggregate Remaining Fund Information \n \nInternal control over financial reporting:  Material weakness identified?  Significant deficiency identified? \n \nNoncompliance material to financial statements noted: \n \nFederal Awards \n \nInternal Control over major programs:  Material weakness identified?  Significant deficiency identified? \n \nType of auditor's report issued on compliance for major programs: All major programs \n \nAny audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? \n \nIdentification of major programs: \n \nCFDA Numbers \n \nName of Federal Program or Cluster \n \n10.553, 10.555 \n \nChild Nutrition Cluster \n \nDollar threshold used to distinguish between Type A and Type B programs: \n \nAuditee qualified as low-risk auditee? \n \nUnmodified No Yes No \nNo Yes Unmodified Yes \n$750,000.00 No \n \n- 1 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2016 \n \nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \n \nFS 2016-001 Control Category: \nInternal Control Impact: Compliance Impact: Repeat of Prior Year Finding: \n \nControl Procedures at the Central Office Cash and Cash Equivalents Capital Assets Significant Deficiency None FS-6591-13-01, FS 2014-001 and FS 2015-001 \n \nDescription: The accounting procedures of the School District were insufficient to provide for adequate internal controls at the Central Office. \n \nCriteria: The School District's management is responsible for designing and maintaining internal controls that provide reasonable assurance that transactions are properly documented, approved, processed and recorded in accordance with the School District's established policies and procedures. \n \nCondition: The following deficiencies were noted within the School District's internal controls and accounting procedures: \n \nCash and Cash Equivalents  Bank reconciliations for two bank accounts were not performed in a timely manner.  One bank reconciliation lacked evidence of review and proper approval.  Controls were not in place to ensure that the internally pooled cash accounts net to zero. \n \nCapital Assets  The process of identification, valuation and posting of capital assets was performed by one individual, with no review by someone independent of the capital asset process. \n \nCause: The two bank accounts are low activity accounts with low balances. Bank reconciliations were done on a periodic basis. The pooled cash accounts are set up to automatically balance. This process needs to be checked for accuracy. No one has been formally assigned the duty of reviewing the asset list in the past year even though department heads do look over their asset list each year. \n \nEffect or Potential Effect: Errors and/or irregularities may not be detected in a timely manner. \n \nRecommendation: The School District should strengthen controls over Cash and Cash Equivalents to ensure that bank reconciliations are performed in a timely manner, properly reviewed and that reviews/approvals are documented. Internally pooled cash accounts should be monitored to ensure that they net to zero. In addition, management should ensure that a proper separation of duties exists related to the key accounting functions for capital assets or utilize compensating controls that assist in assuring that capital assets transactions are properly processed and reported. \n \nViews of Responsible Officials: We concur with this finding. \n \n- 2 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2016 \n \nIII FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \n \nFA 2016-001 Compliance Requirement: Internal Control Impact: Compliance Impact: Federal Awarding Agency: Pass-Through Entity: CFDA Number and Title: Federal Award Number: Questioned Costs: Repeat of Prior Year Finding: \n \nControls over Equipment Equipment and Real Property Management Significant Deficiency Nonmaterial Noncompliance U.S. Department of Agriculture Georgia Department of Education 10.553 and 10.555 Child Nutrition Cluster 16165GA324N1099 None Identified FA 2015-001 \n \nDescription: The policies and procedures of the School District were insufficient to provide adequate internal controls over equipment and real property management as it relates to the Child Nutrition Cluster. \n \nCriteria: 2 CFR  200.313(d)(1) states, \"Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, cost of the property, percentage of Federal participation in the cost of the property, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property.\" \n \nChapter 41, State and Federal Fiscal Rules and Procedures of the Financial Management for Georgia Local Units of Administration states, \"Equipment records must be maintained that include a description of the equipment, a serial number or other identification number, the vendor, title holder, acquisition date and cost, source of funding, percentage of federal participation in the cost of the equipment, the location use and condition, and any ultimate disposition data including the date of disposal and sale price of the equipment.\" \n \nCondition: The School District did not maintain an adequate equipment listing for the Child Nutrition Cluster Including information regarding the equipment's cost, acquisition date, serial number, percentage of Federal participation in regards to cost, who holds title, use and condition of the property. \n \nQuestioned Cost: N/A \n \nCause: Management was unaware of the Child Nutrition Cluster requirements for equipment. \n \nEffect or Potential Effect: Failure to maintain a proper, accurate equipment listing resulted in noncompliance with the Federal Grant requirements and indicates a significant deficiency in the School District's control procedures over Child Nutrition Cluster Equipment. \n \n- 3 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2016 III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Recommendation: The School District should strengthen controls over Child Nutrition Cluster equipment to ensure that the equipment records are complete and accurate. The equipment records should include description, identifying number, source, title holder, acquisition date, cost, funding source, percentage of federal participation, location, condition and ultimate disposal data for each piece of equipment. Views of Responsible Officials: We concur with this finding. \n- 4 - \n \n SECTION V MANAGEMENT'S CORRECTIVE ACTION \n \n (This page left intentionally blank) \n \n FRANKLIN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \nSCHEDULE OF MANAGEMENT'S CORRECTIVE ACTION YEAR ENDED JUNE 30, 2016 \n \nCORRECTIVE ACTION PLANS - FINANCIAL STATEMENT FINDINGS \n \nFS 2016-001 Control Category: Internal Control Impact: Compliance Impact: Repeat of Prior Year Finding: \n \nControl Procedures at the Central Office Cash and Cash Equivalents, Capital Assets Significant Deficiency None FS-6591-13-01, FS 2014-001 and FS 2015-001 \n \nThe School District did not have adequate internal controls at the Central Office. \n \nCorrective Action Plans: All bank statements are reconciled monthly regardless of materiality. Matt Adams will review all changes to the capital asset listing. The cash balancing accounts will be double-checked for accuracy. \n \nEstimated Completion Date: March 2017 \n \nContact Person: Telephone: Fax: Email: \n \nTom Porter, Finance Director (706) 384-4554 (706) 384-7472 tom.porter@franklin.k12.ga.us \n \nCORRECTIVE ACTION PLANS  FEDERAL AWARD FINDINGS \n \nFA 2016-001 Compliance Requirement: Internal Control Impact: Compliance Impact: Federal Awarding Agency: Pass-Through Entity: CFDA Number and Title: Federal Award Number: Questioned Costs: Repeat of Prior Year Finding: \n \nControls over Equipment Equipment and Real Property Management Significant Deficiency Nonmaterial Noncompliance U.S. Department of Agriculture Georgia Department of Education 10.553 and 10.555 Child Nutrition Cluster 16165GA324N1099 None Identified FA 2015-001 \n \nThe policies and procedures of the School District were insufficient to provide adequate internal controls over equipment and real property management as it relates to the Child Nutrition Cluster. \n \nCorrective Action Plans: All Child Nutrition Cluster inventory items are now recorded by federal standards for the nutrition program. Any item that was missing information was amended to include the additional information. \n \nEstimated Completion Date: January 2017 \n \nContact Person: Telephone: Fax: Email: \n \nTom Porter, Finance Director (706) 384-4554 (706) 384-7472 tom.porter@franklin.k12.ga.us \n \n "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-be26-bf8-b2015-belec-p-btext","title":"Franklin County Board of Education, Carnesville, Georgia, annual financial report for the fiscal year ended 2015 June 30 (including independent auditor's reports)","collection_id":"dlg_ggpd","collection_title":"Georgia Government Publications","dcterms_contributor":["Georgia. Department of Audits and Accounts, issuing body."],"dcterms_spatial":["United States, Georgia, 32.75042, -83.50018"],"dcterms_creator":["Georgia. Department of Audits and Accounts"],"dc_date":["2016-10-26"],"dcterms_description":["Financial report of the Franklin County Board of Education."],"dc_format":["application/pdf"],"dcterms_identifier":null,"dcterms_language":["eng"],"dcterms_publisher":["Atlanta, Ga. : Georgia. Department of Audits and Accounts"],"dc_relation":null,"dc_right":["http://rightsstatements.org/vocab/InC/1.0/"],"dcterms_is_part_of":null,"dcterms_subject":["Franklin County Board of Education (Ga.)--Appropriations and expenditures--Periodicals","Education--Georgia--Franklin County--Auditing--Periodicals","Education--Georgia--Franklin County--Finance--Statistics--Periodicals"],"dcterms_title":["Franklin County Board of Education, Carnesville, Georgia, annual financial report for the fiscal year ended 2015 June 30 (including independent auditor's reports)"],"dcterms_type":["Text"],"dcterms_provenance":["University of Georgia. Map and Government Information Library"],"edm_is_shown_by":["https://dlg.galileo.usg.edu/do:dlg_ggpd_y-ga-ba800-b-pr1-be26-bf8-b2015-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-be26-bf8-b2015-belec-p-btext"],"dcterms_temporal":null,"dcterms_rights_holder":null,"dcterms_bibliographic_citation":null,"dlg_local_right":null,"dcterms_medium":["annual reports","state government records","audits","financial records","financial statements"],"dcterms_extent":null,"dlg_subject_personal":null,"iiif_manifest_url_ss":null,"dcterms_subject_fast":null,"fulltext":"FRANKLIN COUNTY BOARD OF EDUCATION \nCARNESVILLE, GEORGIA \nANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2015 \n(Including Independent Auditor's Reports) \n \n FRANKLIN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \n \nSECTION I \n \nFINANCIAL \n \nINDEPENDENT AUDITOR'S REPORT \n \nREQUIRED SUPPLEMENTARY INFORMATION \n \nMANAGEMENT'S DISCUSSION AND ANALYSIS \n \nEXHIBITS \n \nBASIC FINANCIAL STATEMENTS \n \nDISTRICT-WIDE FINANCIAL STATEMENTS \n \nA \n \nSTATEMENT OF NET POSITION \n \nB \n \nSTATEMENT OF ACTIVITIES \n \nFUND FINANCIAL STATEMENTS \n \nC \n \nBALANCE SHEET \n \nGOVERNMENTAL FUNDS \n \nD \n \nRECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \n \nTO THE STATEMENT OF NET POSITION \n \nE \n \nSTATEMENT OF REVENUES, EXPENDITURES AND CHANGES \n \nIN FUND BALANCES \n \nGOVERNMENTAL FUNDS \n \nF \n \nRECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT \n \nOF REVENUES, EXPENDITURES AND CHANGES IN FUND \n \nBALANCES TO THE STATEMENT OF ACTIVITIES \n \nG \n \nSTATEMENT OF FIDUCIARY NET POSITION \n \nFIDUCIARY FUNDS \n \nH NOTES TO THE BASIC FINANCIAL STATEMENTS \n \nSCHEDULES \n \nREQUIRED SUPPLEMENTARY INFORMATION \n \n1 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY TEACHERS' RETIREMENT SYSTEM OF GEORGIA \n2 SCHEDULE OF CONTRIBUTIONS  TEACHERS' RETIREMENT SYSTEM OF GEORGIA 3 NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION 4 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES \nIN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND \n \nPage \ni \n1 2 4 5 6 7 8 9 \n31 32 33 34 \n \n (This page left intentionally blank) \n \n FRANKLIN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \n \nSECTION I \nFINANCIAL \nSCHEDULES \nSUPPLEMENTARY INFORMATION \n5 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 6 SCHEDULE OF STATE REVENUE 7 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 8 ALLOTMENTS AND EXPENDITURES \nGENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) BY PROGRAM \n \nPage \n35 36 37 39 \n \nSECTION II \nCOMPLIANCE AND INTERNAL CONTROL REPORTS \nINDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS \nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 \n \nSECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS \n \nSECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS \n \n (This page left intentionally blank) \n \n SECTION I FINANCIAL \n \n (This page left intentionally blank) \n \n Greg S. Griffin \nSTATE AUDITOR \n(404) 656-2174 \n \nDEPARTMENT OF AUDITS AND ACCOUNTS \n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \nOctober 26, 2016 \n \nHonorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education \nand Superintendent and Members of the Franklin County Board of Education \nINDEPENDENT AUDITOR'S REPORT \nLadies and Gentlemen: \nReport on the Financial Statements \nWe have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Franklin County Board of Education, as of and for the year ended June 30, 2015, and the related notes to the financial statements (Exhibits A through H), which collectively comprise the Board's basic financial statements as listed in the table of contents. \nManagement's Responsibility for the Financial Statements \nManagement is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. \nAuditor's Responsibility \nOur 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 Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. \nAn audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that \n2015ARL-11 \n \n (This page left intentionally blank) \n \n are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. \nWe believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. \nOpinions \nIn our opinion, the basic financial statements referred to above 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 Franklin County Board of Education, as of June 30, 2015, and the respective changes in financial position and cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. \nEmphasis of Matter \nAs described in Note 2 to the financial statements, in 2015, the Franklin County Board of Education adopted new accounting guidance, Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions  an amendment of GASB Statement No. 27, and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date  an amendment of GASB Statement No. 68. The School District restated beginning Net Position for the cumulative effect of these accounting changes. Our opinion is not modified with respect to this matter. \nAs discussed in Note 2 to the financial statements, in 2015, the Franklin County Board of Education restated the prior period financial statements to correct a misstatement. Our opinion is not modified with respect to this matter. \nOther Matters \nRequired Supplementary Information \nAccounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis, Schedule of Proportionate Share of the Net Pension Liability, Schedule of Contributions to Retirement Systems, Notes to the Required Supplementary Information and the Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual as presented on pages i through xii and pages 31 through 34 respectively, 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 regarding 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 our 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. \n2015ARL-11 \n \n (This page left intentionally blank) \n \n Other Information \nOur audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Franklin County Board of Education's basic financial statements. The accompanying supplementary information, consisting of Schedules 5 through 8, is presented for the purposes of additional analysis and is not a required part of the basic financial statements. The Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is not a required part of the basic financial statements. \nThe accompanying supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic 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 basic financial statements as a whole. \nOther Reporting Required by Government Auditing Standards \nIn accordance with Government Auditing Standards, we have also issued our report dated October 26, 2016, on our consideration of the Franklin County 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 internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Franklin County Board of Education's internal control over financial reporting and compliance. \nA 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. \nRespectfully submitted, \n \nGSG:er 2015ARL-11 \n \nGreg S. Griffin State Auditor \n \n (This page left intentionally blank) \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 \nINTRODUCTION \nThe School District's financial statements for the fiscal year ended June 30, 2015 include a series of basic financial statements that report financial information for the District as a whole, its funds, and its fiduciary responsibilities. The Statement of Net Position and the Statement of Activities provide financial information about all of the District's activities and present both a short-term and long-term view of the District's finances on a global basis. The fund financial statements provide information about all of the District's funds. Information about these funds, such as the District's General Fund, is important in its own right, but will also give insight into the District's overall soundness as reported in the Statement of Net Position and the Statement of Activities. \nIn fiscal year 2015, the School District adopted Governmental Accounting Standards Board (GASB) Statements No. 68 and No.71, which address new pension accounting requirements. The adoption of these statements had a significant impact on the School District's District-wide financial statements, and in many cases distorts comparability of fiscal year 2015 financial statements with those of the prior year. Prior year financial statements, as presented herein, have not been restated for implementation of GASB No.68 and No.71. The District's Governmental Fund Financial Statements were not affected by implementation of these new statements. \nFINANCIAL HIGHLIGHTS \nKey financial highlights for fiscal year 2015 are as follows: \nOn the District-wide financial statements: \n The District's net position at June 30, 2015 was $37.6 million. Net position reflects the difference between all assets of the District (including capital assets, net of depreciation), and deferred outflows of resources and all liabilities, both short-term and long-term, and deferred inflows of resources. The net position at June 30, 2015 of $37.6 million represented a decrease of $26.0 million when compared to the prior year. This large decrease in net position was due to implementation of GASB No. 68 and No. 71. \n The School District had $35.6 million in expenses relating to governmental activities; $22.0 million of these expenses were offset by program specific charges for services, grants and contributions. However, general revenues (primarily property and sales taxes) of $15.4 million were adequate to provide for these programs. \n As stated above, general revenues accounted for $15.4 million or about 41.2% of all revenues totaling $37.4 million. Program specific revenues in the form of charges for services, grants, and contributions accounted for the balance of these revenues. (Percentages in table below have been rounded to one decimal place.) \ni \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 \nOn the fund financial statements:  Among major funds, the General Fund had almost $34.3 million in revenues and $34.5 million in expenditures. The General Fund balance of $3.6 million at June 30, 2015 decreased about $200 thousand from the prior year. \nOVERVIEW OF THE FINANCIAL STATEMENTS These financial Statements consists of three parts: management's discussion and analysis (this section), the basic financial statements including notes to the financial statements and required supplementary information. The basic financial statements include two levels of statements that present different views of the School District. These include the District-wide and fund financial statements. The District-wide financial statements include the `Statement of Net Position' and `Statement of Activities.' These statements provide information about the activities of the School District presenting both short-term and long-term information about the School District's overall financial status. The fund financial statements focus on individual parts of the School District, reporting the School District's operation in more detail. The `Governmental Funds' statements disclose how basic services are financed in the short-term as well as what remains for future spending. The `Fiduciary Funds' statements provide information about the financial relationships in which the School District acts solely as a trustee or agent for the benefit of others. In the case of the Franklin County School District, the General Fund, Capital Projects Fund, and Debt Service Fund are all considered to be major funds. The District has no funds reported as nonmajor funds as defined by generally accepted accounting principles. The financial statements also include notes that explain some of the information in the statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and supports the financial statements. Additionally, other supplementary information (not required) is also presented that further supplements understanding of the financial statements. \nii \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 \nDistrict-wide Statements \nSince Franklin County School District has no operations that have been classified as \"Business Activities\", the District-wide financial statements are basically a consolidation of all of the District's operating funds into one column called governmental activities. In reviewing the District-wide financial statements, a reader might ask the question, are we in a better financial position now than last year? The `Statement of Net Position' and the `Statement of Activities' provides the basis for answering this question. These financial statements include all District's assets and liabilities and uses the accrual basis of accounting similar to the accounting used by most private-sector companies. This basis of accounting takes into account all of the current year's revenues and expenses regardless of when cash is received or paid. \nThese two statements report the School District's net position and any changes in net position. The change in net position is important because it tells the reader that, for the School District as a whole, the financial position of the School District has improved or diminished. The causes of this change may be the results of many factors, including those not under the School District's control, such as the property tax base, facility conditions, required educational programs, student-teacher ratios, and other factors. \nWhen analyzing District-wide financial statements, it is important to remember these statements are prepared using an economic resources measurement focus (accrual accounting) and involve the following steps to format the Statement of Net Position: \n Capitalize current outlays for capital assets  Depreciate capital assets  Report long-term debt, including pension obligations, as a liability  Calculate revenue and expense using the economic resources measurement focus and the \naccrual basis of accounting  Allocate net position as follows: \no Net Investment in Capital Assets o Restricted Net Position is amounts with constraints placed on the use by external \nsources such as creditors, grantors, contributors or laws and regulations. o Unrestricted Net Position for no specific use \nFund Financial Statements \nThe School District uses many funds or sub-funds to account for a multitude of financial transactions during the fiscal year. The fund financial statements presented in this report provide detail information about the School District's significant or major funds. As discussed previously, the District has no nonmajor Funds as defined by generally accepted accounting principles. \niii \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 \nThe District has two kinds of funds as discussed below: \nGovernmental Funds  Most of the School District's activities are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end available for spending in future periods. These funds are reported using the modified accrual method of accounting which measures cash and all other financial assets that can be readily converted to cash. The governmental fund statements provide a detailed short-term view of the School District's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance educational programs. The differences between government activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds are reconciled in the financial statements. \nFiduciary Funds  The School District is the trustee, or fiduciary, for assets that belong to clubs, organizations and others within the principals' accounts. The School District is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. The School District excludes these activities from the District-wide financial statements because it cannot use these assets to finance its operations. \nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT AS A WHOLE \nNet position, which is the difference between total assets and deferred outflows of resources, and total liabilities and deferred inflows of resources, is one indicator of the financial condition of the District. When revenues exceed expenses, the result is an increase in net position. When expenses exceed revenues, the result is a decrease in net position. The relationship between revenues and expenses can be thought of as the District's operating results. The District's net position, as measured in the Statement of Net Position is one way to measure the District's financial health, or financial position. Over time, increases or decreases in the District's net position, as measured in the Statement of Activities, are one indicator of whether its financial health is improving or deteriorating. However, the District's goal and mission is to provide success for each child's education, not to generate profits as private corporations do. For this reason, many other nonfinancial factors should be considered in assessing the overall health of the District. \nIn the case of the Franklin County School District, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $37.6 million at June 30, 2015. To better understand the District's actual financial position and ability to deliver services in future periods, it is necessary to review the various components of the net position category. For example, of the $37.6 million of net position, about $3.9 million was restricted for continuation of various Federal programs, debt service and ongoing capital projects. Accordingly, these funds were not available to meet the District's ongoing obligations to citizens and creditors. \nIn addition, the District had $58.4 million (net of related debt) invested in capital assets (e.g., land, buildings, and equipment). The District uses these capital assets to provide educational services to students within geographic boundaries served by the District. Because of the very nature and on-going use of the assets being reported in this component of net position, it must be recognized that this portion of the net position is not available for future spending. \niv \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 \nBecause of the restrictions on net position as discussed above and because of implementation of GASB No. 68 and No. 71, the District had an unrestricted deficit of about $24.7 million at June 30, 2015. However, the District's overall Net Position can also be viewed in the following manner: \n \nPension Related Net Position Non Pension related Net Position \nNet Position, June 30, 2015 \n \n$ -26,379,197.00 63,939,094.62 \n$ 37,559,897.62 \n \nThe above analysis reflects, despite pension obligations, the District's Net Position is a positive $37.6 million and management believes the District's financial position is sound. \n \nv \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 \n \nTable 1 provides a summary of the School District's net position for this fiscal year as compared to the prior fiscal year. GASB No. 68 and No. 71 were implemented in fiscal year 2015. Prior year amounts were not restated to reflect the implementation of GASB No. 68 and No. 71. \nTable 1 Net Position \n \nGovernmental Activities \n \nFiscal \n \nFiscal \n \nYear 2015 \n \nYear 2014 (1) \n \nAssets Current and Other Assets Capital Assets, Net \n \n$ \n \n13,678,374 $ 14,664,146 \n \n65,027,275 \n \n65,126,682 \n \nTotal Assets \n \n78,705,649 \n \n79,790,828 \n \nDeferred Outflows of Resources \n \n2,338,991 \n \nLiabilities Current and Other Liabilities Long-Term Liabilities \n \n27,402,865 8,197,261 \n \n4,950,540 10,823,015 \n \nTotal Liabilities \n \n35,600,126 \n \n15,773,555 \n \nDeferred Inflows of Resources \n \n7,884,616 \n \n389,179 \n \nNet Position Net Investment in Capital Assets Restricted Unrestricted \n \n58,377,893 3,853,744 \n-24,671,739 \n \n59,065,411 2,281,068 2,281,615 \n \nTotal Net Position \n \n$ \n \n37,559,898 $ 63,628,094 \n \n(1) Fiscal year 2014 balances do not reflect the effect of the restatement of Net Position. See Note 2 of the Notes to the Basic Financial Statements for additional information. \n \nvi \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 \n \nTotal net position decreased about $26.1 million in fiscal year 2015 from the prior year, primarily due to the implementation of GASB No. 68 and No. 71 accounting standards for pensions. In connection with this accounting change, management presents the following additional information: \n \nTotal unrestricted net position (deficit) \n \n$ -24,671,739.00 \n \nLess unrestricted deficit in net position \n \nresulting from recognition of net pension obligations \n \n26,379,197.00 \n \nUnrestricted Net Position exclusive of the net pension \n \nliability effect \n \n$ 1,707,458.00 \n \nTable 2 provides the change in the School District's net position for this fiscal year as compared to the prior fiscal year. GASB No. 68 and No. 71 were implemented in fiscal year 2015. Prior year amounts were not restated to reflect the implementation of these statements. \n \nvii \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 \n \nRevenues Program Revenues: Charges for Services and Sales Operating Grants and Contributions Capital Grants and Contributions \nTotal Program Revenues \n \nTable 2 Change in Net Position \n(In Thousands) \n \nGovernmental Activities \n \nFiscal Year \n \nFiscal Year \n \n2015 \n \n2014 (1) \n \n$ \n \n540,326 $ \n \n538,014 \n \n21,157,410 \n \n19,966,584 \n \n326,555 \n \n3,213,419 \n \n22,024,291 \n \n23,718,017 \n \nGeneral Revenues: Taxes Property Taxes For Maintenance and Operations Sales Taxes Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous \nSpecial Items Loss on Disposal of Capital Assets \n \n10,250,537 3,469,873 \n1,154,671 27,972 \n661,682 \n-148,809 \n \n9,419,608 3,361,882 \n687,014 33,495 \n754,344 \n-391,624 \n \nTotal General Revenues and Special Items \n \n15,415,926 \n \n13,864,719 \n \nTotal Revenues \n \n37,440,217 \n \n37,582,736 \n \nProgram Expenses: 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 Operations of Non-Instructional Services Enterprise Operations Food Services Interest on Short-Term and Long-Term Debt \n \n22,387,945 \n1,237,309 1,360,917 \n546,228 537,240 2,026,798 281,845 2,414,408 2,165,454 \n277,573 \n356,287 1,821,868 \n184,021 \n \n20,830,729 \n1,043,352 1,503,287 \n527,964 404,377 1,907,402 254,265 2,241,216 2,147,174 \n2,140 215,426 \n284,687 1,622,278 \n263,096 \n \nTotal Expenses \n \n35,597,893 \n \n33,247,393 \n \nIncrease in Net Position \n \n$ \n \n1,842,324 $ \n \n4,335,343 \n \n(1) Fiscal year 2014 balances do not reflect the effect of the restatement of Net Position. See Note 2 of the Notes to the Basic Financial Statements for additional information. \n \nviii \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 \n \nCost of Providing Services \nThe Statement of Activities shows the cost of program services and the charges for services and grants offsetting these services. Table 3 shows, for governmental activities, the total cost of services and the net cost of services. Net cost of services can be defined as the total cost less fees generated by the activities and intergovernmental revenue provided for specific programs. The net cost reflects the financial burden on the School District's taxpayers by each activity as compared to the prior fiscal year. \n \nTable 3 Governmental Activities \n(in Thousands) \n \nTotal Cost of Services Fiscal Year 2015 \n \nTotal Cost of Services Fiscal \nYear 2014 (1) \n \nTotal Cost of Services Fiscal Year 2015 \n \nTotal Cost of Services Fiscal \nYear 2014 (1) \n \nInstruction \n \n$ \n \nSupport Services: \n \nPupil Services \n \nImprovement of Instructional Services \n \nEducational Media Services \n \nGeneral Administration \n \nSchool Administration \n \nBusiness Administration \n \nMaintenance and Operation of Plant \n \nStudent Transportation Services \n \nCentral Support Services \n \nOther Support Services \n \nOperations of Non-Instructional Services: \n \nCommunity Services \n \nFood Services \n \nInterest on Short-Term and Long-Term Debt \n \n22,387,945 $ \n1,237,309 1,360,917 \n546,228 537,240 2,026,798 281,845 2,414,408 2,165,454 \n277,573 \n356,287 1,821,868 \n184,021 \n \n20,830,729 $ \n1,043,352 1,503,287 \n527,964 404,377 1,907,402 254,265 2,241,216 2,147,174 \n2,140 215,426 \n284,687 1,622,278 \n263,096 \n \n7,185,055 $ 4,287,958 \n \n965,003 689,515 \n67,224 -135,247 994,803 278,806 1,300,183 1,340,974 \n222,335 \n \n769,615 841,333 \n-3,020 -363,265 869,568 249,082 1,064,473 1,321,833 \n2,140 16,635 \n \n233,599 247,331 184,021 \n \n185,452 24,476 \n263,096 \n \nTotal Expenses \n \n$ 35,597,893 $ 33,247,393 $ 13,573,602 $ 9,529,376 \n \n(1) Fiscal year 2014 balances do not reflect the effect of the restatement of Net Position. See Note 2 of the Notes to the Basic Financial Statements for additional information. \n \nExpenses increased about $2.35 million from the prior year, while the net costs of providing services increased over $4.0 million. This perceived disparity in funding costs in fiscal year 2015 occurred because total program revenues decreased $1.7 million from the prior year, largely from a decrease in State Funds in fiscal year 2015 for Capital Grants associated with new construction that was completed in fiscal year 2015. \n \nix \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 \nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT'S FUNDS \nInformation about the School District's governmental funds is presented starting on Exhibit \"C\" of this report. Governmental funds are accounted for using the modified accrual basis of accounting. The governmental funds had total revenues of about $38.3 million and total expenses of $39.9 million in fiscal year 2015. Total governmental fund balances of $7.0 million at June 30, 2015, decreased about $1.6 million from the prior year primarily because the District expended funds from Capital Projects reserves that that been accumulated in prior years. \nGeneral Fund Budget Highlights \nThe School District's budget is prepared according to Georgia Law. The most significant budgeted fund is the General Fund. During the course of fiscal year 2015, the School District amended its general fund budget as needed. \nThe School District budget is adopted at the aggregate level and maintained at the program, function, object, and site levels to facilitate budgetary control. The budgeting systems are designed to control the total budget, but provide flexibility to meet the ongoing programmatic needs. The budgeting systems are also designed to control total site budgets but provide flexibility for site management as well. \nFor the General Fund, the final actual revenues of $34.3 million exceeded the final budgeted revenues by $2.4 million. This variance was primarily due to actual revenues for State revenues exceeding the final budgeted amount by $0.5 million, Federal funds exceeding the final budget amount by $0.8 million, revenues for Charges for Services exceeding the final budget by $0.5 million and miscellaneous revenues exceeding final budget by over $0.6 million. \nThe General Fund's final actual expenditures of $34.5 million exceeded the final budget amount of $34.1 million by roughly $0.4 million. This variance cannot be identified with any specific functional area of expenditures. \nIt should be noted the District intended to use about $2.1 million of prior year reserves in funding its 2015 General Fund budget. However, because revenues were higher than projected, only about $0.2 million of prior year's reserves were actually needed to fully fund expenditures in fiscal year 2015. \nAdditionally, the District's budget did not include the activities of the school principals' accounts in fiscal year 2015. This omission effectively understated the District's overall projected revenues and expenditures. \nx \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 \n \nCAPITAL ASSETS AND DEBT ADMINISTRATION \nCapital Assets \nAt fiscal year ended June 30, 2015, the School District had $65.0 million invested in capital assets, net of accumulated depreciation, all in governmental activities. These assets are made up of a broad range of items including buildings; land; land improvements; intangible assets; and food service, transportation and maintenance equipment. Table 4 reflects a summary of these balances, net of accumulated depreciation, as compared to the prior fiscal year. \n \nTable 4 Capital Assets (Net of Depreciation) \n \nGovernmental Activities \n \nFiscal \n \nFiscal \n \nYear 2015 \n \nYear 2014 (1) \n \nLand \n \n$ \n \nConstruction In Progress \n \nBuilding and Improvements \n \nImprovements Other Than Buildings \n \nEquipment \n \nIntangible Assets \n \nTotal \n \n$ \n \n1,338,157 $ 500,231 \n7,065,943 54,072,534 \n1,993,446 56,963 \n65,027,274 $ \n \n1,370,442 15,043,816 \n6,698,795 40,243,122 \n1,712,809 57,698 \n65,126,682 \n \n(1) Fiscal year 2014 balances do not reflect the effect of the restatement of Net Position. See Note 2 of the Notes to the Basic Financial Statements for additional information. \nAdditional information about the School District's Capital Assets can be found in the Notes to the Basic Financial Statements. \nLong-Term Debt \nAt June 30, 2015, the School District had $8.2 million in total debt outstanding which consisted of $7.5 million in bond debt and $0.7 million in unamortized bond premiums. Table 5 summarizes the School District's debt as compared to the prior fiscal year. \n \nxi \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 \n \nTable 5 Debt at June 30 \n \nGovernmental Activities \n \nFiscal \n \nFiscal \n \nYear 2015 \n \nYear 2014 \n \nBonds Payable Unamortized Bond Premium \n \n$ \n \n7,520,000 $ \n \n677,262 \n \n9,920,000 903,016 \n \nTotal \n \n$ \n \n8,197,262 $ \n \n10,823,016 \n \nAdditional information about the School District's debt can be found in the Notes to the Basic Financial Statements. \n \nFACTORS BEARING ON THE DISTRICT'S FUTURE \n \nCurrently known circumstances that are expected to have a significant effect on financial position or results of operations in future years are as follows: \n \n The District is financially stable. The School District's operating millage for fiscal year 2015 was 18.618, which produced almost $548,000 per mill. If needed, the District plans to fund additional capital outlays with the one percent local sales tax revenue and state capital outlay grants. The voters of Franklin County have recently approved a continuation of the one percent local sales tax for school capital projects through December 31, 2022. \n \n The economy continues to improve. Revenues for operations from property taxes increased 7% and general fund state revenue increased almost 12% from the prior year. The General Fund had an unassigned fund balance of $2.6 million at June 30, 2015, which is a decrease of about $165 thousand from the prior year, even though the District projected a decrease of about $2.1 million. The Board anticipates significant financial challenges going forward due to expected continued higher health insurance and benefit costs. In spite of these challenges, the School District will continue to be a good steward of tax dollars while providing a quality educational opportunity. \n \nCONTACTING THE SCHOOL DISTRICT'S FINANCIAL MANAGEMENT \n \nThis financial report is designed to provide our citizens, taxpayers, investors and creditors with a general overview of the School District's finances and to show the School District's accountability for the money it receives. If you have questions about this report or need additional financial information, contact Mr. Tom Porter, Finance Director, Franklin County Board of Education, 280 Busch Road, Carnesville, Georgia 30521. You may also email your questions to Mr. Porter at tom.porter@franklin.k12.ga. \n \nxii \n \n FRANKLIN COUNTY BOARD OF EDUCATION \n \n (This page left intentionally blank) \n \n FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF NET POSITION JUNE 30, 2015 \nASSETS \nCash and Cash Equivalents Investments Accounts Receivable, Net \nTaxes State Government Federal Government Local Other Inventories Capital Assets, Non-Depreciable Capital Assets, Depreciable (Net of Accumulated Depreciation) \nTotal Assets \nDEFERRED OUTFLOWS OF RESOURCES \nRelated to Defined Benefit Pension Plan \nLIABILITIES \nAccounts Payable Salaries and Benefits Payable Payroll Withholdings Payable Interest Payable Contracts Payable Retainages Payable Long-Term Liabilities \nDue Within One Year Due in More Than One Year Net Pension Liability \nTotal Liabilities \nDEFERRED INFLOWS OF RESOURCES \nRelated to Defined Benefit Pension Plan \nNET POSITION \nNet Investment in Capital Assets Restricted for \nContinuation of Federal Programs Debt Service Capital Projects Unrestricted (Deficit) \nTotal Net Position \n \nEXHIBIT \"A\" \n \nGOVERNMENTAL ACTIVITIES \n \n$ \n \n7,325,320.18 \n \n2,325,345.22 \n \n847,424.33 2,127,382.31 1,001,200.19 \n17,888.89 2,386.97 \n31,426.36 1,838,388.39 63,188,886.22 \n \n78,705,649.06 \n \n2,338,991.00 \n \n1,828,031.36 3,698,012.56 \n508,522.53 115,258.33 374,389.00 \n45,079.00 \n2,825,753.88 5,371,507.78 20,833,572.00 \n35,600,126.44 \n \n7,884,616.00 \n \n58,377,892.52 \n544,202.27 1,233,106.95 2,076,435.37 -24,671,739.49 \n \n$ \n \n37,559,897.62 \n \nThe notes to the basic financial statements are an integral part of this statement. - 1 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES \nFOR THE YEAR ENDED JUNE 30, 2015 \n \nGOVERNMENTAL ACTIVITIES \nInstruction Support Services \nPupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Operations of Non-Instructional Services Enterprise Operations Food Services Interest on Short-Term and Long-Term Debt \nTotal Governmental Activities \nGeneral Revenues Taxes Property Taxes For Maintenance and Operations Sales Taxes Special Purpose Local Option Sales Tax For Debt Services Other Sales Tax Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous \nSpecial Items Loss on Disposal of Capital Assets \nTotal General Revenues and Special Items \nChange in Net Position \nNet Position - Beginning of Year, Restated \nNet Position - End of Year \n \nEXPENSES \n \nCHARGES FOR SERVICES \n \n$ \n \n22,387,944.75 $ \n \n1,237,308.62 1,360,917.24 \n546,228.41 537,240.42 2,026,797.69 281,844.93 2,414,407.69 2,165,454.33 277,573.45 \n \n356,286.77 1,821,867.86 \n184,021.11 \n \n$ \n \n35,597,893.27 $ \n \n41,333.90 \n45,650.00 26,760.85 122,687.95 303,893.54 540,326.24 \n \nThe notes to the basic financial statements are an integral part of this statement. - 2 - \n \n EXHIBIT \"B\" \n \nPROGRAM REVENUES OPERATING GRANTS AND \nCONTRIBUTIONS \n \nCAPITAL GRANTS AND CONTRIBUTIONS \n \nNET (EXPENSES) REVENUES \nAND CHANGES IN NET POSITION \n \n$ \n \n14,989,439.68 $ \n \n272,305.47 671,402.21 479,004.00 672,488.00 1,031,995.00 \n3,039.29 1,068,574.56 \n643,279.90 55,238.60 \n \n1,270,642.92 \n \n$ \n \n21,157,409.63 $ \n \n172,115.60 $ 154,440.00 326,555.60 \n \n-7,185,055.57 \n-965,003.15 -689,515.03 \n-67,224.41 135,247.58 -994,802.69 -278,805.64 -1,300,183.13 -1,340,973.58 -222,334.85 \n-233,598.82 -247,331.40 -184,021.11 \n-13,573,601.80 \n \n10,250,537.05 \n3,314,493.76 155,378.88 \n1,154,671.00 27,972.43 \n661,681.86 \n-148,809.34 \n15,415,925.64 \n1,842,323.84 \n35,717,573.78 \n \n$ \n \n37,559,897.62 \n \n- 3 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION BALANCE SHEET \nGOVERNMENTAL FUNDS JUNE 30, 2015 \n \nEXHIBIT \"C\" \n \nASSETS \nCash and Cash Equivalents Investments Accounts Receivable, Net \nTaxes State Government Federal Government Local Other Inventories \n \nGENERAL FUND \n \nDISTRICT-WIDE CAPITAL PROJECTS FUND \n \nDEBT SERVICE \nFUND \n \nTOTAL \n \n$ \n \n6,088,712.66 $ \n \n565,108.42 2,127,382.31 1,001,200.19 \n17,888.89 2,386.97 \n31,426.36 \n \n1,236,607.52 1,259,295.85 $ \n \n$ 1,066,049.37 \n282,315.91 \n \n7,325,320.18 2,325,345.22 \n847,424.33 2,127,382.31 1,001,200.19 \n17,888.89 2,386.97 \n31,426.36 \n \nTotal Assets \nLIABILITIES \nAccounts Payable Salaries and Benefits Payable Payroll Withholdings Payable Contracts Payable Retainages Payable \nTotal Liabilities \nDEFERRED INFLOWS OF RESOURCES \nUnavailable Revenue - Property Taxes \nFUND BALANCES \nNonspendable Restricted Committed Unassigned \nTotal Fund Balances \n \n$ \n \n9,834,105.80 $ \n \n2,495,903.37 $ \n \n1,348,365.28 $ \n \n13,678,374.45 \n \n$ \n \n1,828,031.36 \n \n3,698,012.56 \n \n508,522.53 \n \n$ \n \n6,034,566.45 \n \n374,389.00 45,079.00 \n419,468.00 \n \n$ \n \n1,828,031.36 \n \n3,698,012.56 \n \n508,522.53 \n \n374,389.00 \n \n45,079.00 \n \n6,454,034.45 \n \n196,836.54 \n \n196,836.54 \n \n31,426.36 512,775.91 461,636.44 2,596,864.10 \n3,602,702.81 \n \n2,076,435.37 $ \n \n1,348,365.28 \n \n2,076,435.37 \n \n1,348,365.28 \n \n31,426.36 3,937,576.56 \n461,636.44 2,596,864.10 \n7,027,503.46 \n \nTotal Liabilities, Deferred Inflows of Resources, and Fund Balances \n \n$ \n \n9,834,105.80 $ \n \n2,495,903.37 $ \n \n1,348,365.28 $ \n \n13,678,374.45 \n \nThe notes to the basic financial statements are an integral part of this statement. - 4 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \nTO THE STATEMENT OF NET POSITION JUNE 30, 2015 \n \nEXHIBIT \"D\" \n \nTotal Fund Balances - Governmental Funds (Exhibit \"C\") \nAmounts reported for Governmental Activities in the Statement of Net Position are different because: \nCapital Assets used in Governmental Activities are not financial resources and therefore are not reported as assets in governmental funds. These assets consist of: \nLand Construction in Progress Land Improvements Buildings and Improvements Equipment Intangible Assets Accumulated Depreciation \nTotal Capital Assets \nSome liabilities, including net pension obligations, are not due and payable in the current period and, therefore, are not reported in the funds. \nNet Pension Liability \nDeferred Outflows and Inflows of Resources related to pensions are applicable to future periods and, therefore, are not reported in the governmental funds. \nTaxes that are not available to pay for current period expenditures are deferred in the governmental funds. \nProperty Taxes \nLong-Term Liabilities, including Bonds Payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. These consist of: \nBonds Payable Accrued Interest Payable Bond Premiums, Net of Amortization \nTotal Long-Term Liabilities \nNet Position of Governmental Activities (Exhibit \"A\") \n \n$ 7,027,503.46 \n \n$ 1,338,157.39 500,231.00 \n8,157,163.07 63,627,694.48 \n5,869,190.94 141,285.31 \n-14,606,447.58 \n \n65,027,274.61 \n \n-20,833,572.00 -5,545,625.00 \n \n196,836.54 \n \n$ -7,520,000.00 -115,258.33 -677,261.66 \n \n-8,312,519.99 \n \n$ 37,559,897.62 \n \nThe notes to the basic financial statements are an integral part of this statement. - 5 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES \nGOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2015 \n \nEXHIBIT \"E\" \n \nREVENUES \nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous \nTotal Revenues \nEXPENDITURES \nCurrent 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 Other Support Services Enterprise Operations Food Services Operation \nCapital Outlay Debt Services \nPrincipal Interest \nTotal Expenditures \nExcess of Revenues over (under) Expenditures \nOTHER FINANCING SOURCES (USES) \nTransfers In Transfers Out \nTotal Other Financing Sources (Uses) \nNet Change in Fund Balances \nFund Balances - Beginning \nFund Balances - Ending \n \nGENERAL FUND \n \nDISTRICT-WIDE CAPITAL PROJECTS FUND \n \nDEBT SERVICE \nFUND \n \nTOTAL \n \n$ \n \n10,211,251.55 \n \n155,378.88 \n \n19,400,880.24 $ \n \n3,277,056.33 \n \n540,326.24 \n \n24,399.94 \n \n661,681.86 \n \n34,270,975.04 \n \n$ 692,135.80 \n692,135.80 \n \n$ 3,314,493.76 \n3,572.49 3,318,066.25 \n \n10,211,251.55 3,469,872.64 \n20,093,016.04 3,277,056.33 540,326.24 27,972.43 661,681.86 \n38,281,177.09 \n \n21,668,422.26 \n1,243,214.68 1,406,795.24 \n564,579.41 553,632.61 2,021,375.76 262,726.58 2,408,075.18 2,047,008.63 277,573.45 356,286.77 1,667,344.07 \n \n10,588.00 2,546,275.21 \n \n34,477,034.64 -206,059.60 \n \n2,556,863.21 -1,864,727.41 \n \n2,400,000.00 441,774.99 \n2,841,774.99 \n476,291.26 \n \n21,668,422.26 \n1,243,214.68 1,406,795.24 \n564,579.41 553,632.61 2,021,375.76 262,726.58 2,408,075.18 2,057,596.63 277,573.45 356,286.77 1,667,344.07 2,546,275.21 \n2,400,000.00 441,774.99 \n39,875,672.84 \n-1,594,495.75 \n \n-206,059.60 3,808,762.41 \n \n727,153.97 \n727,153.97 -1,137,573.44 3,214,008.81 \n \n-727,153.97 -727,153.97 -250,862.71 1,599,227.99 \n \n727,153.97 -727,153.97 \n0.00 -1,594,495.75 8,621,999.21 \n \n$ \n \n3,602,702.81 $ \n \n2,076,435.37 $ \n \n1,348,365.28 $ \n \n7,027,503.46 \n \nThe notes to the basic financial statements are an integral part of this statement. - 6 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF \nREVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2015 \n \nEXHIBIT \"F\" \n \nTotal Net Change in Fund Balances - Governmental Funds (Exhibit \"E\") \nAmounts reported for Governmental Activities in the Statement of Activities are different because: \nCapital Outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activities, the cost of Capital Assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are: \nCapital Outlay Depreciation Expense \nExcess of Capital Outlay over Depreciation Expense \nThe net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, donations, and disposals) is to decrease net position. \nGrant Revenues from the Georgia State Financing and Investment Commission not available to pay current year expenditures are not required to be deferred in the Statement of Activities as they are in the Fund Statements and were recorded as revenue in the prior year. \nTaxes reported in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. \nRepayment of Long-Term Debt is reported as an expenditure in Governmental Funds, but the repayment reduces Long-Term Liabilities in the Statement of Net Position. In the current year, these amounts consist of: \nBond Principal Retirements Amortization of Bond Premiums \nTotal Long-Term Debt Repayments \nSome items reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in Governmental Funds. The net of these adjustments are: \nAccrued Interest on Issuance of Bonds Pension Expense \nTotal Additional Expenditures \nChange in Net Position of Governmental Activities (Exhibit \"B\") \n \n$ -1,594,495.75 \n \n$ 1,763,961.29 -1,235,458.94 \n \n528,502.35 -148,809.34 \n \n-692,135.80 39,285.50 \n \n$ 2,400,000.00 225,753.88 \n \n2,625,753.88 \n \n$ \n \n32,000.00 \n \n1,052,223.00 \n \n1,084,223.00 \n \n$ 1,842,323.84 \n \nThe notes to the basic financial statements are an integral part of this statement. - 7 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET POSITION \nFIDUCIARY FUNDS JUNE 30, 2015 \nASSETS Cash and Cash Equivalents Investments \nTotal Assets LIABILITIES Funds Held for Others \n \nEXHIBIT \"G\" \nAGENCY FUNDS \n$ 140,869.77 21,905.71 \n$ 162,775.48 \n$ 162,775.48 \n \nThe notes to the basic financial statements are an integral part of this statement. - 8 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2015 \n \nEXHIBIT \"H\" \n \nNOTE 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY \nREPORTING ENTITY \nThe Franklin County 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. \nNOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES \nBASIS OF PRESENTATION \nThe 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 Franklin County Board of Education. \nDISTRICT-WIDE STATEMENTS: \nThe Statement of Net Position 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. \nThe Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities. \n Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of 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. \n 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. \nFUND FINANCIAL STATEMENTS: \nThe 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. \nThe School District reports the following major governmental funds: \n General Fund is the School District's primary operating fund. It accounts for and reports all financial resources not accounted for and reported in another fund. \n District-wide Capital Projects Fund accounts for and reports financial resources including Education Special Purpose Local Option Sales Tax (ESPLOST), Bond Proceeds and grants from Georgia State Financing and Investment Commission that are restricted, committed or assigned to the expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets. \n Debt Service Fund accounts for and reports financial resources that are restricted, committed, or assigned including taxes (sales) legally restricted for the payment of general long-term principal and interest. \n- 9 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2015 \n \nEXHIBIT \"H\" \n \nThe School District reports the following fiduciary fund type: \n Agency funds account for assets held by the School District as an agent for various funds, governments, clubs, or individuals. \nBASIS OF ACCOUNTING \nThe 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 is recognized in the fiscal year in which all eligibility requirements have been satisfied. \nThe 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. \nGovernmental 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. The School District considers all intergovernmental revenues to be available if they are collected within 120 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, except for principal and interest on general longterm debt, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities and acquisitions under capital leases are reported as other financing sources. \nThe 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 resources are 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. \nRESTATEMENT OF PRIOR YEAR NET POSITION \nFor fiscal year 2015, the School District made several prior period adjustments due to the correction of an error in amounts recorded as Capital Assets and the adoption of GASB Statement No. 68 and GASB Statement No. 71, as described in \"New Accounting Pronouncements\" below, which require the restatement of the June 30, 2014, Net Position in Governmental Activities. The result is a decrease in Net Position at July 1, 2014 of $27,910,520.05. These changes are in accordance with generally accepted accounting principles. \n \n- 10 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2015 \n \nEXHIBIT \"H\" \n \nNet position, July 1, 2014 as previously reported \n \n$ 63,628,093.83 \n \nPrior Period adjustment Correction for error in Recording Construction in progress \n \n-479,100.05 \n \nImplementation of GASB 68: Net Pension Liability (measurement date) Teachers' Retirement System Deferred Outflows - School District's contribution made during fiscal year 2014 \nTeachers' Retirement System \n \n-29,497,360.00 2,065,940.00 \n \nNet Position, July 1, 2014, as restated \n \n$ $35,717,573.78 \n \nNEW ACCOUNTING PRONOUNCEMENTS \nIn fiscal year 2015, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions. The provisions of this statement establish accounting and financial reporting standards for pensions that are provided to the employees of state and local governmental employers through pension plans that are administered through trusts. The adoption of this statement has a significant impact on the School District's financial statements. As noted above the School District restated beginning Net Positon for the cumulative effect of this accounting change. \nIn fiscal year 2015, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 69, Government Combinations and Disposals of Government Operations. This statement provides specific accounting and financial reporting guidance for combinations in the governmental environment. This statement also requires that disclosures be made by governments about combination arrangements in which they engage and for disposals of government operations. The School District did not have any activities of this type during the fiscal year and the adoption of this statement does not have a significant impact on the School District's financial statements. \nIn fiscal year 2015, the School District adopted Governmental Accounting Standards Board (GASB) Statement 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - an amendment of GASB No. 68. The objective of this statement is to improve accounting and financial reporting by addressing an issue in Statement No. 68, Accounting and Financial Reporting for Pensions, concerning transition provisions related to certain pension contributions made to defined benefit pension plans prior to implementation of statement. This statement amends paragraph 137 of Statement No. 68 which limited recognition of pension-related deferred inflows of resources at the transition to circumstances in which it is practical to determine the amounts of all deferred outflows of resources and deferred inflows of resources related to pensions. The adoption of this statement has a significant impact on the School District's financial statements. As noted above the School District restated beginning Net Position for the cumulative effect of this accounting change. \nCASH AND CASH EQUIVALENTS \nComposition of Deposits \nCash 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. \n \n- 11 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2015 \n \nEXHIBIT \"H\" \n \nINVESTMENTS \n \nComposition of Investments \nInvestments made by the School District in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning 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 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: \n \n(1) Obligations issued by the State of Georgia or by other states, \n \n(2) Obligations issued by the United States government, \n \n(3) Obligations fully insured or guaranteed by the United States government or a United States government agency, \n \n(4) Obligations of any corporation of the United States government, \n \n(5) Prime banker's acceptances, \n \n(6) The local government investment pool (Georgia Fund 1) administered by the State of Georgia, Office of the State Treasurer, \n \n(7) Repurchase agreements, and \n \n(8) Obligations of other political subdivisions of the State of Georgia. \n \nThe 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. \n \nRECEIVABLES \nReceivables 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. \n \nPROPERTY TAXES \nThe Franklin County Board of Commissioners adopted the property tax levy for the 2014 tax digest year (calendar year) on July 19, 2014 (levy date) based on property values as of January 1, 2014. Taxes were due on November 15, 2014 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2014 tax digest are reported as revenue in the governmental funds for fiscal year 2015. The Franklin County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2015, for maintenance and operations amounted to $9,770,985.86. \n \nThe tax millage rate levied for the 2014 tax year (calendar year) for the Franklin County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value): \n \nSchool Operations \n \n18.618 mills \n \nAdditionally, Title Ad Valorem Tax revenues, at the fund reporting level, amounted to $440,265.69 during fiscal year ended June 30, 2015. \n- 12 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2015 \n \nEXHIBIT \"H\" \n \nSALES TAXES \nEducation Special Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $3,314,493.76 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years. The most recent authorization expires on December 31, 2017. \n \nINVENTORIES \n \nFood Inventories \nOn 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. \n \nCAPITAL ASSETS \nCapital 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 fiscal year 2015, no events or changes in circumstances affecting a capital asset that may indicate impairment were known to the School District. \n \nCapitalization thresholds and estimated useful lives of capital assets reported in the District-wide statements are as follows: \n \nCapitalization Policy \n \nEstimated Useful Life \n \nLand \n \nLand Improvements \n \n$ \n \nBuildings and Improvements $ \n \nEquipment \n \n$ \n \nIntangible Assets \n \n$ \n \nAny Amount 10,000.00 20,000.00 5,000.00 20,000.00 \n \nN/A 20 to 80 years 25 to 80 years \n5 to 50 years Estimated Life \n \nDepreciation 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. \n \nAmortization 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. \n \n- 13 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2015 \n \nEXHIBIT \"H\" \n \nDEFERRED OUTFLOWS/INFLOWS OF RESOURCES \nIn addition to assets, the statement of net position and/or the balance sheet will report a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of resources that applies to a future period(s) and therefore will not be recognized as an outflow of resources (expense/expenditure) until then. Under the full accrual method of accounting, the School District has reported deferred outflows of resources related to a defined benefit pension plan, as discussed in Note 15 - Retirement Plans. \nIn addition to liabilities, the statement of net position and/or the balance sheet will report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of resources that applies to a future period(s) and therefore will not be recognized as an inflow of resources (revenue) until that time. Under the full accrual method of accounting, the School District has reported deferred inflows of resources related to a defined benefit pension plan, as discussed in Note 15 - Retirement Plans. This item is reported only in the District-wide Statement of Net Position. Additionally, the School District has only one type of item, which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reporting only in the governmental funds balance sheet. The governmental funds report unavailable revenues from property taxes and these amounts are deferred and will be recognized as an inflow of resources (revenue) in the period in which the amounts become available. \nGENERAL OBLIGATION BONDS \nThe School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. In the District-wide financial statements, bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Bond issuance costs are recognized as an outflow of resources in the fiscal year in which the bonds are issued. \nIn the fund financial statements, the School District recognizes bond premiums and discounts, as well as bond issuance costs during the fiscal year bonds are issued. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the Statement of Net Position. \nPENSIONS \nFor purposes of measuring the Net Pension Liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Teachers' Retirement System of Georgia (TRS), and the Public School Employees Retirement System (PSERS) and additions to/deductions from TRS/PSERS fiduciary net position have been determined on the same basis as they are reported by TRS/PSERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. See Note 15 - Retirement Plans. \n \n- 14 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2015 \n \nEXHIBIT \"H\" \n \nNET POSITION \nThe School District's Net Position in the District-wide Statements is classified as follows: \nNet Investment in Capital Assets - This represents the School District's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of Net Investment in Capital Assets. \nRestricted Net Position - This represents resources for which the School District is legally or contractually obligated to spend resources for bus replacement, continuation of Federal programs, debt service and capital projects in accordance with restrictions imposed by external third parties. \nUnrestricted Net Position - Unrestricted net position is the net amount of the assets, deferred outflows of resources, liabilities and deferred inflows of resources that are not included in the determination of Net Investment of Capital Assets and Restricted Net Position. Included in the net deficit reported is the School District's Net Pension liability of $20,833.572.00 which is required for financial reporting. \nFUND BALANCES \nThe School District's fund balances are classified as follows: \nNonspendable  Amounts that cannot be spent either because they are in a nonspendable form or because they are legally or contractually required to be maintained intact. \nRestricted  Constraints are placed on the use of resources are either (1) externally imposed conditions by creditors, grantors, contributors, or laws and regulations of other governments or (2) imposed by law through constitutional provisions or enabling legislation. \nCommitted  Amounts that can be used only for specific purposes pursuant to constraints imposed by formal action of the Board of Education. The Board of Education is the School District's highest level of decision-making authority, and the formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution approved by the Board. Committed fund balance also should incorporate contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements. \nAssigned  Amounts that are constrained by the School District's intent to be used for specific purposes, but are neither restricted nor committed. The intent should be expressed by (1) the Board of Education or (2) the budget or finance committee, or the Superintendent, or designee, to assign amounts to be used for specific purposes. \nUnassigned  The residual classification for the General Fund. This classification represents fund balances that have not been assigned to other funds and that have not been restricted, committed, or assigned to specific purposes within the General Fund. \n \n- 15 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2015 \n \nEXHIBIT \"H\" \n \nFund Balances of the Governmental Funds at June 30, 2015, are as follows: \n \nNonspendable Inventories \nRestricted Continuation of Federal Programs $ Capital Projects Debt Service \nCommitted School Activity Accounts \nUnassigned \n \n$ \n512,775.91 2,076,435.37 1,348,365.28 \n \n31,426.36 \n3,937,576.56 461,636.44 \n2,596,864.10 \n \nFund Balance, June 30, 2015 \n \n$ \n \n7,027,503.46 \n \nIt is the goal of the School District to achieve and maintain a committed, assigned, and unassigned fund balance in the general fund at fiscal year-end of not less than 5% of revenues not to exceed 15% of the total budget of the subsequent fiscal year, in compliance with Official Code of Georgia Annotated Section 20-2-167(a)5. If the unassigned fund balance at fiscal year end falls below the goal, the School District shall develop a restoration plan to achieve and maintain the minimum fund balance. \nWhen multiple categories of fund balance are available for expenditure, the School District will start with the most restricted category and spend those funds first before moving down to the next category with available funds. \nUSE OF ESTIMATES \nThe 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. \nNOTE 3: BUDGETARY DATA \nThe budget is a complete financial plan for the School District's fiscal year, and is based upon careful estimates of expenditures together with probable funding sources. The budget is legally adopted each year for the general, debt service, and capital projects funds. There is no statutory prohibition regarding over expenditure of the budget at any level. The budget for all governmental funds, except the various school activity (principal) accounts, is prepared and adopted by fund and function. The legal level of budgetary control was established by the Board at the aggregate function level. The budget for the General Fund was prepared in accordance with accounting principles generally accepted in the United States of America. \nThe budgetary process begins with the School District's administration presenting an initial budget for the Board's review. The administration makes revisions as necessary based on the Board's guidelines and a tentative budget is approved. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality, as well as the School District's website. At the next regularly scheduled meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final budget. The approved budget is then submitted, in accordance with provisions of Official Code of Georgia Annotated Section 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal yearend. \nOnly the Board is authorized to approve adjustments to the approved budget for revenue or expenditures in any budget function for any fund. \n \n- 16 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2015 \n \nEXHIBIT \"H\" \n \nSee Schedule 4  General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances  Budget to Actual for a detail of any over/under expenditures during fiscal year 2015. \nNOTE 4: DEPOSITS AND INVESTMENTS \nCOLLATERALIZATION OF DEPOSITS \nOfficial 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 110 percent of the daily pool balance. \nAcceptable security for deposits consists of any one of or any combination of the following: \n(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, \n(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, \n(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia, \n(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, \n(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, \n(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and \n(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. \nCATEGORIZATION OF DEPOSITS \nCustodial 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, 2015, School District had deposits with a carrying amount of $7,488,095.66, which includes $21,905.71 in Certificates of Deposit that are reported as Investments, and a bank balance of $7,130,605.39. The bank balances insured by Federal depository insurance were $733,100.30 and the bank balances collateralized with securities held by the pledging financial institution or by the pledging financial institution's trust department or agent in the School District's name were $6,397,505.09. \n \n- 17 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2015 \n \nEXHIBIT \"H\" \n \nCATEGORIZATION OF INVESTMENTS \nAt June 30, 2015, the carrying value of the School District's total investments was $2,347,250.93, which is materially the same as fair value. This includes $21,905.71 invested in Certificates of Deposit, which are collateralized in the same manner as other cash deposits. This remaining balance consisted entirely of funds invested in the Georgia Fund 1, (local government investment pool), administered by the State of Georgia, Office of the State Treasurer which is not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office of the State Treasurer for the Georgia Fund 1 (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. Additional information on the Georgia Fund 1 is disclosed in the State of Georgia Comprehensive Annual Financial Report. This audit can be obtained from the Georgia Department of Audits and Accounts at www.audits.ga.gov/SGD/CAFR.html. \nThe Primary Liquidity Portfolio consists of Georgia Fund 1 which is not registered with the SEC as an investment company and does not operate in a manner consistent with the SEC's Rule 2a-7 of the Investment Company Act of 1940. The investment is valued at the pool's share price, $1.00 per share. The pool is an AAAf rated investment pool by Standard and Poor's. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2015, was 56 days. \nNOTE 5: NON-MONETARY TRANSACTIONS \nThe School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 2  Inventories. \n \n- 18 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2015 \n \nEXHIBIT \"H\" \n \nNOTE 6: CAPITAL ASSETS \nThe following is a summary of changes in the Capital Assets during the fiscal year: \n \nRestated Balances July 1, 2014 \n \nIncreases Decreases \n \nTransfers \n \nBalances June 30, 2015 \n \nGovernmental Activities Capital Assets \nNot Being Depreciated: Land Construction in Progress \n \n$ 1,338,157.39 14,564,716.28 $ 777,342.64 $ \n \nTotal Capital Assets Not Being Depreciated \n \n15,902,873.67 777,342.64 \n \nCapital Assets Being Depreciated \n \n$ 1,338,157.39 \n \n0.00 $ -14,841,827.92 \n \n500,231.00 \n \n0.00 -14,841,827.92 \n \n1,838,388.39 \n \nLand Improvements Buildings and Improvements Equipment Intangible Assets \n \n7,723,495.19 49,072,236.70 \n5,470,616.86 128,249.62 \n \n480,302.66 78,864.00 \n414,416.30 13,035.69 \n \n46,634.78 118,135.14 262,941.22 \n \n14,594,728.92 247,099.00 \n \n8,157,163.07 63,627,694.48 \n5,869,190.94 141,285.31 \n \nLess Accumulated Depreciation for: Land Improvements Buildings and Improvements Equipment Intangible Assets \n \n992,415.85 8,829,115.04 3,757,808.30 \n70,551.25 \n \n116,009.64 800,892.24 304,785.67 \n13,771.39 \n \n17,205.55 74,846.85 186,849.40 \n \n0.00 \n \n1,091,219.94 9,555,160.43 3,875,744.57 \n84,322.64 \n \nTotal Capital Assets Being Depreciated, Net \nTotal Governmental Activity-Net \n \n48,744,707.93 -248,840.29 148,809.34 14,841,827.92 63,188,886.22 \n \n$ 64,647,581.60 $ 528,502.35 $ 148,809.34 $ \n \n0.00 $ 65,027,274.61 \n \nCurrent year depreciation expense by function is as follows: \n \nInstruction \n \nSupport Services \n \nEducational Media Services \n \n$ \n \nSchool Administration \n \nBusiness Administration \n \nMaintenance and Operation of Plant \n \nStudent Transportation Services \n \nFood Services \n \n$ \n16,387.26 47,890.27 16,213.94 \n8,179.08 179,908.52 \n \n$ \n \n872,277.13 \n268,579.07 94,602.74 \n1,235,458.94 \n \n- 19 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2015 \n \nEXHIBIT \"H\" \n \nNOTE 7: INTERFUND TRANSFERS \nInterfund transfers for the year ended June 30, 2015, consisted of the following: \n \nTransfers to \n \nTransfers From Debt Service Fund \n \nDistrict-wide Capital Projects Fund $ 727,153.97 \n \nTransfers are used to move sales tax revenues collected by the Debt Service Fund to the District-wide Capital Projects Fund as supplemental funding for capital construction projects, \n \nNOTE 8: RISK MANAGEMENT \nThe 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. \n \nThe School District participates in the Georgia School Boards Association Risk and Insurance Management System, a public entity risk pool organized on July 1, 1994, to develop and administer a plan to reduce risk of loss on account of general liability, motor vehicle liability, or property damage, including safety engineering and other loss prevention and control techniques, and to administer one or more groups of self-insurance funds, including the processing and defense of claims brought against members of the system. The School District pays an annual premium to the system for its general insurance coverage. Additional coverage is provided through agreements by the system with other companies according to their specialty for property, boiler and machinery (including coverage for flood and earthquake), general liability (including coverage for sexual harassment, molestation and abuse), errors and omissions, crime and automobile risks. Payment of excess insurance for the system varies by line of coverage. \n \nThe School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims with expenses/expenditures and liability is reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. \n \nChanges in the unemployment compensation claims liability during the last two fiscal years are as follows: \n \nBeginning of Year Liability \n \nClaims and Changes in Estimates \n \nClaims Paid \n \nEnd of Year Liability \n \n2014 $ 2015 $ \n \n0.00 $ 0.00 $ \n \n14,992.00 $ 990.00 $ \n \n14,992.00 $ 990.00 $ \n \n0.00 0.00 \n \n- 20 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2015 \n \nEXHIBIT \"H\" \n \nThe School District participates in the Georgia School Boards Association Workers' Compensation Fund, a public entity risk pool organized on July 1, 1992, 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 Fund for its Workers' Compensation insurance coverage. Excess insurance coverage is provided through an agreement by the Fund with the Safety National Casualty Corporation to provide coverage for potential losses sustained by the Fund in excess of $550 thousand loss per occurrence, up to the statutory limit. Employers' Liability insurance coverage is also provided by Safety National Casualty Corporation to provide coverage for potential losses sustained by the Fund in excess of $550 thousand loss per occurrence, up to $2 million. In addition to the $550,000 per occurrence retention, the Fund also retains an additional $200,000 per year corridor retention. \n \nThe School District has purchased a surety bond to provide additional insurance coverage as follows: \n \nPosition Covered \n \nAmount \n \nSuperintendent \n \n$ \n \n100,000.00 \n \nNOTE 9: LONG-TERM LIABILITIES \n \nGENERAL OBLIGATION DEBT OUTSTANDING \nGeneral Obligation Bonds currently outstanding are as follows: \n \nPurpose \n \nInterest Rates \n \nAmount \n \nGeneral Government - Series 2012 \n \n3.00% - 5.00% $ 7,520,000.00 \n \nVoters have authorized $2,880,000.00 in general obligation debt for capital outlay which was not issued as of June 30, 2015. \nThe changes in Long-Term Liabilities during the fiscal year ended June 30, 2015, were as follows: \n \nBalance July 1, 2014 \n \nAdditions \n \nGovernmental Activities \n \nBalance \n \nDeductions \n \nJune 30, 2015 \n \nDue Within One Year \n \nG.O. Bonds \n \n$ \n \nUnamortized Bond Premiums \n \n9,920,000.00 $ 903,015.54 \n \n0.00 $ 2,400,000.00 $ 225,753.88 \n \n7,520,000.00 $ 2,600,000.00 \n \n677,261.66 \n \n225,753.88 \n \n$ 10,823,015.54 $ \n \n0.00 $ 2,625,753.88 $ 8,197,261.66 $ 2,825,753.88 \n \n- 21 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2015 \n \nEXHIBIT \"H\" \n \nAt June 30, 2015, payments due by fiscal year which includes principal and interest for these items are as follows: \n \nFiscal Year Ended June 30: \n \nGeneral Obligation Debt \n \nPrincipal \n \nInterest \n \nUnamortized Bond Premium \n \n2016 2017 2018 \n \n$ \n \n2,600,000.00 $ \n \n345,775.00 $ \n \n225,753.88 \n \n2,550,000.00 \n \n215,775.00 \n \n225,753.88 \n \n2,370,000.00 \n \n88,275.00 \n \n225,753.90 \n \nTotal Principal and Interest $ \n \n7,520,000.00 $ \n \n649,825.00 $ \n \n677,261.66 \n \nNOTE 10: ON-BEHALF PAYMENTS \nThe School District has recognized revenues and costs in the amount of $106,802.34 for retirement contributions paid on the School District's behalf by the following State Agencies. \nGeorgia Department of Education Paid to the Teachers' Retirement System of Georgia For Teachers' Retirement System (TRS) Employer's Cost In the amount of $36,853.34 \nOffice of State Treasurer Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $69,949.00 \nFunds paid on behalf of the School District are reported in governmental funds. See Note 15 Retirement Plans for the State support related to the Net Pension Liability. \n \nNOTE: 11: SIGNIFICANT COMMITMENTS \nThe following is an analysis of significant outstanding construction or renovation contracts executed by the School District as of June 30, 2015. This project will be completed using local resources. \n \nProject \n \nUnearned Executed Contracts \n \nLavonia Roofing Project \n \n$ \n \n135,419.00 \n \nThe amount described in this note is not reflected in the basic financial statements. \n \n- 22 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2015 \n \nEXHIBIT \"H\" \n \nNOTE 12: SIGNIFICANT CONTINGENT LIABILITIES \nAmounts 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. \nThe School District is a defendant in various legal proceedings pertaining to 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. \nNOTE 13: SUBSEQUENT EVENTS \nIn March 2016, voters of Franklin County authorized a special one percent sales tax for a period not to exceed twenty (20) calendar quarters and for the purpose of raising not more than $20,000,000.00 for the Franklin County School District for the purpose of (i) constructing, renovating, and equipping a Career Technical and Agricultural Education (\"CTAE\") career academy on the Franklin County High School campus and constructing and equipping additions to Carnesville Elementary School Intermediate campus; (ii) adding to, renovating, repairing, improving, acquiring and equipping school buildings and school system facilities; (iii) acquiring miscellaneous new equipment, fixtures and furnishings for the school system, including computer technology equipment, computer software, school buses and other vehicles, transportation and maintenance equipment, and security and safety equipment; (iv) acquiring land or improving land for new or existing schools; (v) acquiring textbooks, ebooks, and e-book readers for the school system; (vi) paying any general obligation debt of the School District issued in conjunction with the imposition of such sales and use tax; and (vii) paying the expenses incident to accomplish the foregoing. The voters also approved the issuance of general obligation debt of Franklin County School District in the principal amount of $13,395,000.00 for the purposes of funding items (i)-(v) above and for the purpose of payment of a portion of the interest on such debt. \nNOTE 14: POST-EMPLOYMENT BENEFITS \nGEORGIA SCHOOL PERSONNEL POST-EMPLOYMENT HEALTH BENEFIT FUND \nPlan 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 Fund provides health insurance benefits to eligible former employees and their qualified beneficiaries through the State Employees Health Benefit Plan administered by the Department of Community Health. The Official Code of Georgia Annotated (O.C.G.A.) 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). The Department of Community Health, which includes the School OPEB Fund, issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts. \n \n- 23 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2015 \n \nEXHIBIT \"H\" \n \nFunding 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. For members with fewer than five years of service as of January 1, 2012, contributions also vary based on years of service. On average, members with five years or more of service as of January 1, 2012 pay approximately 25% of the cost of the health insurance coverage. In accordance with the Board resolution dated December 8, 2011, for members with fewer than five years of service as of January 1, 2012, the State provides a premium subsidy in retirement that ranges from 0% for fewer than 10 years of service to 75% (but no greater than the subsidy percentage offered to active employees) for 30 or more years of service. The subsidy for eligible dependents ranges from 0% to 55% (but no greater than the subsidy percentage offered to dependents of active employees minus 20%). No subsidy is available to Medicare eligible members not enrolled in a Medicare Advantage Option. The Board of Community Health sets all member premiums by resolution and in accordance with the law and applicable revenue and expense projections. Any subsidy policy adopted by the Board may be changed at any time by Board resolution and does not constitute a contract or promise of any amount of subsidy. \n \nParticipating 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 \"payas-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. \n \nThe 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, 2015: \n \nFor certificated teachers, librarians and regional educational service agencies and certain other eligible participants: \n \nJuly 1, 2014  June 30, 2015 $945.00 per member per month \n \nFor non-certificated school personnel: \n \nJuly 1, 2014  June 30, 2015 $596.20 per member per month \n \nNo additional contribution was required by the Board for fiscal year 2015 nor contributed to the School OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the School plan for other post-employment benefits and are subject to appropriation. \n \nThe School District's combined active and retiree contributions to the health insurance plans, which equaled the required contribution, for the current fiscal year and the preceding two fiscal years were as follows: \n \nFiscal Year \n \nPercentage Contributed \n \nRequired Contribution \n \n2015 2014 2013 \n \n100% 100% 100% \n \n$ 3,898,024.90 $ 3,805,385.33 $ 3,382,388.32 \n \n- 24 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2015 \n \nEXHIBIT \"H\" \n \nNOTE 15: RETIREMENT PLANS \nThe Franklin County Board of Education participates in various retirement plans administered by the State of Georgia, as further explained below. \n \nTEACHERS' RETIREMENT SYSTEM OF GEORGIA (TRS) \nPlan Description: All teachers of the District as defined in 47-3-60 of the Official Code of Georgia Annotated (O.C.G.A.) and certain other support personnel as defined by 47-3-63 are provided a pension through the Teachers' Retirement System of Georgia (TRS). TRS, a cost-sharing multiple- employer defined benefit pension plan, is administered by the TRS Board of Trustees (TRS Board). Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. The Teachers' Retirement System of Georgia issues a publicly available separate financial audit report that can be obtained at www.trsga.com/publications. \n \nBenefits Provided: TRS provides service retirement, disability retirement, and death benefits. Normal retirement benefits are determined as 2% of the average of the employee's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. An employee is eligible for normal service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. Ten years of service is required for disability and death benefits eligibility. Disability benefits are based on the employee's creditable service and compensation up to the time of disability. Death benefits equal the amount that would be payable to the employee's beneficiary had the employee retired on the date of death. Death benefits are based on the employee's creditable service and compensation up to the date of death. \n \nContributions: Per Title 47 of the O.C.G.A., contribution requirements of active employees and participating employers, as actuarially determined, are established and may be amended by the TRS Board. Pursuant to O.C.G.A. 47-3-63, the employer contributions for certain full-time public school support personnel are funded on behalf of the employer by the State of Georgia. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees were required to contribute 6% of their annual pay during fiscal year 2015. The school district's contractually required contribution rate for the year ended June 30, 2015 was 13.15% of annual school district payroll. \n \nEmployer contributions for the current fiscal year and the preceding two fiscal years are as follows: \n \nFiscal Year \n \nPercentage Contributed \n \nRequired Contribution \n \n2015 2014 2013 \n \n100% 100% 100% \n \n$ 2,375,844.00 $ 2,098,050.00 $ 1,955,178.00 \n \nPUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM (PSERS) \nPlan description: PSERS is a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly in 1969 for the purpose of providing retirement allowances for public school employees who are not eligible for membership in the Teachers' Retirement System of Georgia. The ERS Board of Trustees, plus two additional trustees, administers PSERS. Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. PSERS issues a publicly available financial report that can be obtained at www.ers.ga.gov/formspubs/formspubs. \n \n- 25 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2015 \n \nEXHIBIT \"H\" \n \nBenefits provided: A member may retire and elect to receive normal monthly retirement benefits after completion of ten years of creditable service and attainment of age 65. A member may choose to receive reduced benefits after age 60 and upon completion of ten years of service. \nUpon retirement, the member will receive a monthly benefit of $14.75, multiplied by the number of years of creditable service. Death and disability benefits are also available through PSERS. Additionally, PSERS may make periodic cost-of-living adjustments to the monthly benefits. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contribution, the member forfeits all rights to retirement benefits. \nContributions: The general assembly makes an annual appropriation to cover the employer contribution to PSERS on behalf of local school employees (bus drivers, cafeteria workers, and maintenance staff). The annual employer contribution required by statute is actuarially determined and paid directly to PSERS by the State Treasurer in accordance with O.C.G.A. 47-4-29(a) and 60(b). Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. \nIndividuals who became members prior to July 1, 2012 contribute $4 per month for nine months each fiscal year. Individuals who became members on or after July 1, 2012 contribute $10 per month for nine months each fiscal year. The State of Georgia, although not the employer of PSERS members, is required by statute to make employer contributions actuarially determined and approved and certified by the PSERS Board of Trustees. \nPension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions \nAt June 30, 2015, the School District reported a liability of $20,833,572.00 for its proportionate share of the Net Pension Liability for TRS. \nThe TRS Net Pension Liability reflected a reduction for support provided to the School District by the State of Georgia for certain public school support personnel. The amount recognized by the School District as its proportionate share of the Net Pension Liability, the related State of Georgia support, and the total portion of the Net Pension Liability that was associated with the School District were as follows: \n \nSchool District's proportionate share of the Net Pension Liability \nState of Georgia's proportionate share of the Net Pension Liability associated with the School District \nTotal \n \n$ 20,833,572.00 \n331,129.00 $ 21,164,701.00 \n \nThe Net Pension Liability was measured as of June 30, 2014. The total pension liability used to calculate the Net Pension Liability was based on an actuarial valuation as of June 30, 2013. An expected total pension liability as of June 30, 2014 was determined using standard roll-forward techniques. The School District's proportion of the Net Pension Liability was based on contributions to TRS during the fiscal year ended June 30, 2014. \nAt June 30, 2014, the School District's TRS proportion was 0.164905%, which was a decrease of 0.004378% from its proportion measured as of June 30, 2013. \nAt June 30, 2015, the School District did not have a PSERS liability for a proportionate share of the Net Pension Liability because of a Special Funding Situation with the State of Georgia, which is responsible for the Net Pension Liability of the plan. The amount of the State's proportionate share of the Net Pension Liability associated with the School District is $269,580.00. \n- 26 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2015 \n \nEXHIBIT \"H\" \n \nThe PSERS Net Pension Liability was measured as of June 30, 2014. The total pension liability used to calculate the Net Pension Liability was based on an actuarial valuation as of June 30, 2013. An expected total pension liability as of June 30, 2014 was determined using standard roll-forward techniques. The State's proportion of the Net Pension Liability associated with the School District was based on actuarially determined contributions paid by the State during the fiscal year ended June 30, 2014. \n \nFor the year ended June 30, 2015, the School District recognized pension expense of $1,330,859.00 for TRS and $23,411.00 for PSERS and revenue of $44,091.00 for TRS and $23,441.00 for PSERS. The revenue is support provided by the State of Georgia. For TRS, the State of Georgia support is provided only for certain support personnel. \n \nAt June 30, 2015, the School District reported deferred outflows of resources and deferred inflows of resources related to pension from the following sources: \n \nTRS \n \nDeferred Outflows Deferred Inflows \n \nof Resources \n \nof Resources \n \nNet differences between projected and actual earnings on pension plan investments \n \n$ 7,263,025.00 \n \nChanges in proportion and differences between School District contributions and proportionate share of contributions \nSchool District contributions subsequent to the measurement date \nTotal \n \n621,591.00 \n \n$ \n \n2,338,991.00 \n \n$ \n \n2,338,991.00 $ 7,884,616.00 \n \nFranklin County Board of Education contributions subsequent to the measurement date of June 30, 2014 for TRS are reported as deferred outflows of resources and will be recognized as a reduction of the Net Pension Liability in the year ended June 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: \n \nYear Ended June 30: \n \nTRS \n \n2016 2017 2018 2019 2020 \n \n$ -1,957,027.00 \n \n$ -1,957,027.00 \n \n$ -1,957,027.00 \n \n$ -1,957,028.00 \n \n$ \n \n-56,507.00 \n \n- 27 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2015 \n \nEXHIBIT \"H\" \n \nActuarial assumptions: The total pension liability as of June 30, 2014 was determined by an actuarial valuation as of June 30, 2013, using the following actuarial assumptions, applied to all periods included in the measurement: \n \nTeachers' Retirement System: \n \nInflation \n \n3.00% \n \nSalary increases \n \n3.75  7.00%, average, including inflation \n \nInvestment rate of return \n \n7.50%, net of pension plan investment expense, including inflation \n \nMortality rates were based on the RP-2000 Combined Mortality Table for Males or Females set back two years for males and set back three years for females. \n \nThe actuarial assumptions used in the June 30, 2013 valuation were based on the results of an actuarial experience study for the period July 1, 2004  June 30, 2009. \n \nPublic School Employees Retirement System: \n \nInflation \n \n3.00% \n \nSalary increases \n \nN/A \n \nInvestment rate of return \n \n7.50%, net of pension plan investment expense, including inflation \n \nMortality rates were based on the RP-2000 Combined Mortality Table set forward one year for males for the period after service retirement, for dependent beneficiaries, and for deaths in active service, and the RP-2000 Disabled Mortality Table set back two years for males and set forward one year for females for the period after disability retirement. \n \nThe actuarial assumptions used in the June 30, 2013 valuation were based on the results of an actuarial experience study for the period July 1, 2004  June 30, 2009. \n \nThe long-term expected rate of return on TRS and PSERS pension plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target asset allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: \n \nAsset class \n \nTarget allocation \n \nLong-term expected real rate of return* \n \nFixed income Domestic large stocks Domestic mid stocks Domestic small stocks International developed market stocks International emerging market stocks \n \n30.00% 39.70% \n3.70% 1.60% 18.90% 6.10% \n \n3.00% 6.50% 10.00% 13.00% 6.50% 11.00% \n \nTotal \n \n100.00% \n \n* Rates shown are net of the 3.00% assumed rate of inflation \n \n- 28 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2015 \n \nEXHIBIT \"H\" \n \nDiscount rate: The discount rate used to measure the total TRS and PSERS pension liability was 7.50%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and nonemployer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the TRS and PSERS pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. \n \nSensitivity of the Franklin County Board of Education's proportionate share of the Net Pension Liability to changes in the discount rate: The following presents the School District's proportionate share of the Net Pension Liability calculated using the discount rate of 7.50%, as well as what the School District's proportionate share of the Net Pension Liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.50%) or 1-percentage-point higher (8.50%) than the current rate: \n \nTeachers' Retirement System: \n \n1% Decrease (6.50%) \n \nCurrent discount rate (7.50%) \n \n1% Increase (8.50%) \n \nSchool District's proportionate share of the \n \nNet Pension Liability \n \n$ \n \n38,393,477.00 $ \n \n20,833,572.00 $ 6,373,354.00 \n \nPension plan fiduciary net position: Detailed information about the pension plan's fiduciary net position is available in the separately issued TRS and PSERS financial report which is publically available at www.trsga.com/publications and http://www.ers.ga.gov/formspubs/formspubs. \n \nDEFINED CONTRIBUTION PLAN \nThe Franklin County Board of Education maintains an employer paid 403(b) annuity plan for the group of employees covered under the Public School Employees Retirement System (PSERS). Recognizing that PSERS was a limited defined contribution and defined benefit plan which did not provide for an adequate retirement for this group of employees, it was the Board's desire to supplement the retirement of this group. \n \nThe Board selected Lincoln as the provider of this plan. For each employee covered under PSERS, the Board contributes to the plan an amount equal to the amount contributed by the employee not to exceed $25.00 per employee per month. \n \nThe employee becomes vested in the plan with 5 years of experience. Employees who had already achieved 5 years of experience at the time the plan was implemented were vested upon enrollment. \n \nFunds accumulated in the employer paid accounts are only available to the employee upon termination of employment and 5 years of service to Franklin County Board of Education. If an employee terminates employment prior to achieving 5 years of service, funds paid on behalf of the non-vested employee are credited back to the Board. Funds are vested at 20% per year of service. \n \nThe provider for the plan has not changed since its inception. \n \nEmployer contributions for the current fiscal year and the preceding two fiscal years are as follows: \n \nFiscal Year \n \nPercentage Contributed \n \nRequired Contribution \n \n2015 2014 2013 \n \n100% \n \n$ \n \n100% \n \n$ \n \n100% \n \n$ \n \n14,205.00 15,540.00 14,520.00 \n \n- 29 - \n \n (This page left intentionally blank) \n \n FRANKLIN COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY TEACHERS' RETIREMENT SYSTEM OF GEORGIA \nFOR THE YEAR ENDED JUNE 30, 2015 \n \nSCHEDULE \"1\" \n \nSchool District's proportion of the net pension liability School District's proportionate share of the net pension liability State of Georgia's proportionate share of the net pension liability \nassociated with the School District Total \nSchool District's covered-employee payroll School District's proportionate share of the net pension liability \nas a percentage of its covered employee payroll Plan fiduciary net position as a percentage of the total pension liability \n \n2015 0.164905% $ 20,833,572.00 \n331,129.00 $ 21,164,701.00 $ 17,091,045.00 \n121.90% 84.03% \n \nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. Schedule includes all significant plans and funds administered by Franklin County Board of Education. \n- 31 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION \nSCHEDULE OF CONTRIBUTIONS TEACHERS' RETIREMENT SYSTEM OF GEORGIA \nFOR THE YEAR ENDED JUNE 30 \n \nSCHEDULE \"2\" \n \nContractually required contribution Contributions in relation to the contractually required contribution Contribution deficiency (excess) School District's covered-employee payroll Contributions as a percentage of covered-employee payroll \n \n2015 \n \n2014 \n \n2013 \n \n2012 \n \n$ 2,375,844.00 $ 2,098,050.00 $ 1,955,178.00 $ 1,835,659.00 \n \n$ 2,375,844.00 $ 2,098,050.00 $ 1,955,178.00 $ 1,835,659.00 \n \n$ \n \n0.00 $ \n \n0.00 $ \n \n0.00 $ \n \n0.00 \n \n$ 18,071,345.00 $ 17,091,045.00 $ 17,135,652.00 $ 17,856,605.00 \n \n13.15% \n \n12.28% \n \n11.41% \n \n10.28% \n \nThis schedule is intended to show information for 10 years. Due to the retention policy of the Franklin County Board of Education, the School District is only able to display 4 years of information. Schedule includes all significant plans and funds administered by Franklin County Board of Education. \n- 32 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION \nFOR THE YEAR ENDED JUNE 30, 2015 \n \nSCHEDULE \"3\" \n \nTeachers' Retirement System \n \nChanges of assumptions : In 2010 and later, the expectation of retired life mortality was changed to the RP2000 Mortality Tables rather than the 1994 Group Annuity Mortality Table, which was used prior to 2010. In 2010, rates of withdrawal, retirement, disability and mortality were adjusted to more closely reflect actual experience. In 2010, assumed rates of salary increase were adjusted to more closely reflect actual and anticipated experience. \n \nMethod and assumptions used in calculations of actuarially determined contributions : The actuarially determined contribution rates in the schedule of contributions are calculated as of June 30, three years prior to the end of the fiscal year in which contributions are reported. The following actuarial methods and assumptions were used to determine the contractually required contributions for year ended June 30, 2015 reported in that schedule: \n \nValuation date Actuarial cost method Amortization method Remaining amortization period Asset valuation method Inflation rate Salary increases Investment rate of return \n \nJune 30, 2012 Entry age Level percentage of payroll, open 30 years Seven-year smoothed market 3.00% 3.75  7.00%, including inflation 7.50%, net of pension plan investment \nexpense, including inflation \n \n- 33 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION GENERAL FUND \nSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL \nYEAR ENDED JUNE 30, 2015 \n \nSCHEDULE \"4\" \n \nREVENUES \nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous \nTotal Revenues \nEXPENDITURES \nCurrent 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 Other Support Services Enterprise Operations Food Services Operation \nTotal Expenditures \nExcess of Revenues over (under) Expenditures \nOTHER FINANCING SOURCES \nOther Sources \nTotal Other Financing Sources \nNet Change in Fund Balances \nFund Balances - Beginning \nAdjustments \n \nNONAPPROPRIATED BUDGETS \n \nORIGINAL (1) \n \nFINAL (1) \n \nACTUAL AMOUNTS \n \nVARIANCE OVER/UNDER \n \n$ \n \n9,427,400.00 $ \n \n10,389,900.00 $ \n \n10,211,251.55 $ \n \n155,378.88 \n \n18,908,169.09 \n \n18,908,169.09 \n \n19,400,880.24 \n \n2,445,162.00 \n \n2,449,081.00 \n \n3,277,056.33 \n \n63,000.00 \n \n63,000.00 \n \n540,326.24 \n \n27,000.00 \n \n27,000.00 \n \n24,399.94 \n \n40,000.00 \n \n40,000.00 \n \n661,681.86 \n \n30,910,731.09 \n \n31,877,150.09 \n \n34,270,975.04 \n \n-178,648.45 155,378.88 492,711.15 827,975.33 477,326.24 \n-2,600.06 621,681.86 \n2,393,824.95 \n \n21,283,280.32 1,091,987.81 1,675,134.90 527,074.76 507,511.63 2,054,575.60 311,691.46 2,186,939.61 1,998,061.58 212,306.00 864,063.18 \n32,712,626.85 -1,801,895.76 \n120,000.00 \n-1,681,895.76 3,248,497.59 \n34,624.09 \n \n22,067,580.40 1,199,651.75 2,062,047.90 505,638.81 528,013.02 2,028,667.29 358,225.01 2,223,692.93 2,039,594.42 239,900.00 864,063.18 \n34,117,074.71 -2,239,924.62 \n120,000.00 \n-2,119,924.62 3,362,619.15 \n-28,345.69 \n \n21,668,422.26 1,243,214.68 1,406,795.24 564,579.41 553,632.61 2,021,375.76 262,726.58 2,408,075.18 2,047,008.63 277,573.45 356,286.77 1,667,344.07 \n34,477,034.64 -206,059.60 \n-206,059.60 3,808,762.41 \n \n399,158.14 \n-43,562.93 655,252.66 -58,940.60 -25,619.59 \n7,291.53 95,498.43 -184,382.25 -7,414.21 -37,673.45 -356,286.77 -803,280.89 \n-359,959.93 \n2,033,865.02 \n-120,000.00 \n1,913,865.02 \n446,143.26 \n28,345.69 \n \nFund Balances - Ending \n \n$ \n \n1,601,225.92 $ \n \n1,214,348.84 $ \n \n3,602,702.81 $ \n \n2,388,353.97 \n \nNotes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual \n(1) Original and Final Budget amounts do not include the budgeted revenues or expenditures of the various principal accounts. The actual revenues and expenditures of the various principal accounts are $622,790.72 and $612,836.52, respectively. \nThe accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements. \n \nSee notes to the basic financial statements. \n \n- 34 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \nYEAR ENDED JUNE 30, 2015 \n \nSCHEDULE \"5\" \n \nFUNDING AGENCY PROGRAM/GRANT \nAgriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program \nTotal U. S. Department of Agriculture \nEducation, U.S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Special Education Grants to States Preschool Grants \nTotal Special Education Cluster \nOther Programs Pass-Through From Georgia Department of Education ARRA - Race-to-the-Top Incentive Grants Career and Technical Education - Basic Grants to States English Language Acquisition Grants Improving Teacher Quality State Grants Migrant Education - State Grant Program Rural Education Striving Readers Title I Grants to Local Educational Agencies \nTotal Other Programs \nTotal U. S. Department of Education \n \nCFDA NUMBER \n \nPASSTHROUGH \nENTITY ID \nNUMBER \n \nEXPENDITURES IN PERIOD \n \n* 10.553 * 10.555 \n \nN/A \n \nN/A \n \n$ \n \n(2) 1,586,444.67 (1) \n1,586,444.67 \n \n* 84.027 \n \nN/A \n \n* 84.173 \n \nN/A \n \n84.395 \n \nN/A \n \n84.048 \n \nN/A \n \n84.365 \n \nN/A \n \n84.367 \n \nN/A \n \n84.011 \n \nN/A \n \n84.358 \n \nN/A \n \n84.371 \n \nN/A \n \n84.010 \n \nN/A \n \n771,533.64 34,616.20 \n806,149.84 \n16,909.06 38,873.00 15,767.18 155,038.66 32,338.71 52,767.25 36,784.33 920,568.72 \n1,269,046.91 \n2,075,196.75 \n \nTotal Expenditures of Federal Awards \n \n$ \n \n3,661,641.42 \n \nN/A = Not Available \n \nNotes to the Schedule of Expenditures of Federal Awards \n \n(1) Includes the Federally assigned value of donated commodities for the Food Donation Program in the amount of $100,186.26. \n \n(2) Expenditures for the funds earned on the School Breakfast Program ($231,703.53) were not maintained separately and are included in the 2015 National School Lunch Program. \n \nMajor Programs are identified by an asterisk (*) in front of the CFDA number. \nThe School District did not provide Federal Assistance to any Subrecipient. \nThe accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Franklin County Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements. \n \nSee notes to the basic financial statements. \n \n- 35 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2015 \n \nSCHEDULE \"6\" \n \nAGENCY/FUNDING \nGRANTS 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 Elementary Grades (4-5) Program Upper Elementary Grades - Early Intervention (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program 20 Days Additional Instruction Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Mid-term Adjustment Hold-Harmless Amended Formula Adjustment Categorical Grants Pupil Transportation Regular Nursing Services Vocational Supervisors Education Equalization Funding Grant Other State Programs Food Services Math and Science Supplements Preschool Handicapped Program Pupil Transportation - State Bonds Teacher of the Year Teachers' Retirement Technology Infrastructure Vocational Education Vocational Construction Related Equipment - State Bonds \nGeorgia State Financing and Investment Commission Reimbursement on Construction Projects \nOffice of the State Treasurer Public School Employees Retirement \nCONTRACT Human Resources, Georgia Department of Family Connection \n \nGOVERNMENTAL FUND TYPES \n \nCAPITAL \n \nGENERAL \n \nPROJECTS \n \nFUND \n \nFUND \n \nTOTAL \n \n$ 943,080.00 388,567.00 \n2,313,130.00 933,884.00 \n1,097,249.00 612,941.00 \n2,320,292.00 1,997,070.00 \n702,404.00 3,055,357.00 \n593,414.00 219,231.00 163,253.00 147,898.00 403,549.00 124,178.00 \n71,217.00 \n530,019.00 880,306.00 914,203.00 \n10,812.00 -1,669,335.00 \n602,823.00 68,586.00 13,068.00 \n1,154,671.00 \n46,881.00 24,418.66 108,020.71 154,440.00 \n507.25 36,853.34 12,600.00 153,645.65 159,515.60 \n \n$ 943,080.00 388,567.00 \n2,313,130.00 933,884.00 \n1,097,249.00 612,941.00 \n2,320,292.00 1,997,070.00 \n702,404.00 3,055,357.00 \n593,414.00 219,231.00 163,253.00 147,898.00 403,549.00 124,178.00 \n71,217.00 \n530,019.00 880,306.00 914,203.00 \n10,812.00 -1,669,335.00 \n602,823.00 68,586.00 13,068.00 \n1,154,671.00 \n46,881.00 24,418.66 108,020.71 154,440.00 \n507.25 36,853.34 12,600.00 153,645.65 159,515.60 \n \n$ 692,135.80 69,949.00 \n \n692,135.80 69,949.00 \n \n42,182.03 \n \n42,182.03 \n \nSee notes to the basic financial statements. \n \n$ 19,400,880.24 $ 692,135.80 $ 20,093,016.04 - 36 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \nYEAR ENDED JUNE 30, 2015 \n \nSCHEDULE \"7\" \n \nPROJECT \ni) Acquiring, constructing, and equipping replacement school buildings at Franklin County High School, \nii) adding to, renovating, repairing, improving, acquiring and equipping school buildings and School System facilities; \niii) acquiring miscellaneous new equipment, fixtures and furnishings for the School System, including computer technology equipment, computer software, school buses and other vehicles, transportation and maintenance equipment, and security and safety equipment; \niv) acquiring land or improving land for new or existing schools; \nv) acquiring textbooks, e-books, and e-book readers for the School System; \nvi) paying a portion of the payments, including principal and interest, due on the School District's Series 2006 and 2007 Bonds with a maximum payment amount of $1,700,000.00, with the maximum cost of the projects described in items (i)-(vi) payable from said tax being $20,000,000.00, \n \nORIGINAL ESTIMATED \nCOST (1) \n \nCURRENT ESTIMATED COSTS (2) \n \nAMOUNT EXPENDED IN CURRENT YEAR (3) (4) (5) \n \nAMOUNT EXPENDED IN PRIOR YEARS (3) (4) (5) \n \nTOTAL COMPLETION \nCOST \n \nEXCESS PROCEEDS NOT \nEXPENDED \n \nESTIMATED COMPLETION \nDATE \n \n$ 16,300,000.00 $ 15,500,000.00 $ 1,051,130.01 $ 14,193,951.83 \n \nJune 30, 2018 \n \n500,000.00 \n \n1,400,000.00 \n \n975,405.95 \n \n176,298.90 \n \nJune 30, 2018 \n \n1,300,000.00 100,000.00 \n \n2,300,000.00 100,000.00 \n \n530,327.25 \n \n905,306.57 \n \n400,000.00 \n \n400,000.00 \n \nJune 30, 2018 June 30, 2018 June 30, 2018 \n \n1,700,000.00 \n \n300,000.00 \n \n227,097.58 \n \n$ 20,300,000.00 $ 20,000,000.00 $ 2,556,863.21 $ 15,502,654.88 \n \nJune 30, 2018 \n \n(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax. \n \n(2) The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion. \n \n(3) The voters of Franklin County approved the imposition of a 1% sales tax to fund the above projects and retire associated debt. Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the projects. \n \n(4) In addition to the expenditures shown above, the School District has incurred interest to provide advance funding for the above projects as follows: \n \nPrior Years \n \n$ \n \n832,186.81 \n \nCurrent Year \n \n441,774.99 \n \nTotal \n \n$ 1,273,961.80 \n \n(5) In addition to the expenditures shown above, the School District has incurred bond issuance cost and related paying agent fees for the above projects as follows: \n \nPrior Years \n \n$ \n \n162,366.14 \n \nCurrent Year \n \n0.00 \n \nTotal \n \n$ \n \n162,366.14 \n \nSee notes to the basic financial statements. \n \n- 37 - \n \n (This page left intentionally blank) \n \n FRANKLIN COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) \nALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2015 \n \nSCHEDULE \"8\" \n \nDESCRIPTION \nDirect Instructional Programs Kindergarten Program Kindergarten Program-Early Intervention Program Primary Grades (1-3) Program Primary Grades-Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades-Early Intervention (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Category II Category III Category IV Category V Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) \nTOTAL DIRECT INSTRUCTIONAL PROGRAMS \nMedia Center Program Staff and Professional Development \n \nALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) (2) \n \nELIGIBLE QBE PROGRAM COSTS \n \nSALARIES \n \nOPERATIONS \n \nTOTAL \n \n$ \n \n1,129,800.00 $ \n \n1,665,966.45 $ \n \n14,177.61 $ \n \n1,680,144.06 \n \n413,906.00 \n \n1,632.17 \n \n1,632.17 \n \n2,719,950.00 \n \n3,466,734.69 \n \n44,730.59 \n \n3,511,465.28 \n \n1,020,250.00 \n \n17,641.42 \n \n5,124.36 \n \n22,765.78 \n \n1,293,386.00 \n \n2,162,153.26 \n \n21,816.77 \n \n2,183,970.03 \n \n680,855.00 2,716,579.00 2,291,172.00 \n820,701.00 3,498,858.00 \n666,521.00 263,643.00 190,056.00 169,176.00 \n \n70,565.79 3,205,467.48 3,080,216.87 \n791,746.58 \n76,553.52 434,361.02 2,308,444.90 165,908.40 \n16,918.30 348,465.08 \n327,658.76 196,609.35 \n \n2,198.38 39,196.70 56,381.14 65,475.75 \n927.88 1,792.72 195,212.41 7,534.85 19,777.70 6,882.03 \n159.65 5,685.40 \n \n72,764.17 3,244,664.18 3,136,598.01 \n857,222.33 \n77,481.40 436,153.74 2,503,657.31 173,443.25 \n36,696.00 355,347.11 \n159.65 333,344.16 196,609.35 \n \n17,874,853.00 \n \n18,335,411.87 \n \n488,706.11 \n \n18,824,117.98 \n \n468,051.00 80,522.00 \n \n455,817.80 37,257.93 \n \n38,428.50 49,847.89 \n \n494,246.30 87,105.82 \n \nTOTAL QBE FORMULA FUNDS \n \n$ \n \n18,423,426.00 $ \n \n18,828,487.60 $ \n \n576,982.50 $ 19,405,470.10 \n \n(1) Comprised of State Funds plus Local Five Mill Share. (2) Allotments do not include the impact of the State amended formula adjustment. \n \nSee notes to the basic financial statements. \n \n- 39 - \n \n (This page left intentionally blank) \n \n SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS \n \n (This page left intentionally blank) \n \n Greg S. Griffin \nSTATE AUDITOR \n(404) 656-2174 \n \nDEPARTMENT OF AUDITS AND ACCOUNTS \n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \nOctober 26, 2016 \n \nHonorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education \nand Superintendent and Members of the Franklin County Board of Education \nINDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS \nLadies and Gentlemen: \nWe have audited, 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, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Franklin County Board of Education as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise Franklin County Board of Education's basic financial statements and have issued our report thereon dated October 26, 2016. \nInternal Control Over Financial Reporting \nIn planning and performing our audit of the financial statements, we considered Franklin County Board of Education's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Franklin County Board of Education's internal control. Accordingly, we do not express an opinion on the effectiveness of the Franklin County Board of Education's internal control. \nOur consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as described in the accompanying Schedule of Findings and Questioned Costs, we identified certain deficiencies in internal control that we consider to be a material weakness and a significant deficiency. \nA 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 \n2015YB-40 \n \n (This page left intentionally blank) \n \n material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. We consider the deficiency described in the accompanying Schedule of Findings and Questioned Costs as items FS 2015-002 to be a material weakness. \nA significant deficiency is a deficiency, or a 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. We consider the deficiency described in the accompanying Schedule of Findings and Questioned Costs as items FS 2015-001 to be a significant deficiency. \nCompliance and Other Matters \nAs part of obtaining reasonable assurance about whether Franklin County Board of Education's financial statements are free from 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. \nWe noted certain matters that we have reported to management of Franklin County Board of Education in a separate letter dated October 26, 2016. \nFranklin County Board of Education's Response to Findings \nFranklin County Board of Education's response to the findings identified in our audit is described in the accompanying Schedule of Findings and Questioned Costs. Franklin County Board of Education's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. \nPurpose of this Report \nThe purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. \nRespectfully submitted, \n \nGSG:er 2015YB-40 \n \nGreg S. Griffin State Auditor \n \n (This page left intentionally blank) \n \n Greg S. Griffin \nSTATE AUDITOR \n(404) 656-2174 \n \nDEPARTMENT OF AUDITS AND ACCOUNTS \n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \nOctober 26, 2016 \n \nHonorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education \nand Superintendent and Members of the Franklin County Board of Education \nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON NTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 \nLadies and Gentlemen: \nReport on Compliance for Each Major Federal Program \nWe have audited Franklin County 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, 2015. Franklin County 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. \nManagement's Responsibility \nManagement is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. \nAuditor's Responsibility \nOur responsibility is to express an opinion on compliance for each of Franklin County Board of Education's major federal programs based on our audit of the types of compliance requirements referred to above. 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 Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the Franklin County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. \nWe believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of Franklin County Board of Education's compliance. \n2015SA-30 \n \n (This page left intentionally blank) \n \n Opinion on Each Major Federal Program \nIn our opinion, the Franklin County Board of Education complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2015. \nReport on Internal Control over Compliance \nManagement of Franklin County Board of Education is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered Franklin County Board of Education's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program 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 Franklin County Board of Education's internal control over compliance. \nA 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 compliance 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. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. \nOur 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 material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, we identified certain deficiencies in internal control over compliance, as described in the accompanying Schedule of Findings and Questioned Costs as items FA 2015-001 and FA 2015-002, that we consider to be significant deficiencies. \nFranklin County Board of Education's response to the internal control over compliance findings identified in our audit is described in the accompanying Schedule of Findings and Questioned Costs. Franklin County Board of Education's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. \n2015SA-30 \n \n (This page left intentionally blank) \n \n The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. \nRespectfully submitted, \n \nGSG:er 2015SA-30 \n \nGreg S. Griffin State Auditor \n \n (This page left intentionally blank) \n \n SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS \n \n (This page left intentionally blank) \n \n FRANKLIN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2015 \n \nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \n \nFINDING CONTROL NUMBER AND STATUS \n \nFS-6591-13-01 FS 2014-001 \n \nPartially Resolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses \n \nCORRECTIVE ACTION/RESPONSES \n \nCash and Cash Equivalents Expenditures/Liabilities/Disbursements Revenues/Receivables/Receipts General Ledger Capital Assets Inadequate Internal Controls Finding Control Number: FS-6591-13-01 \n \nThe accounting department will begin completing a formal bank reconciliation on all accounts regardless if the balance is immaterial or the activity is extremely low. In the past the activity in the Bus Driver's Assoc. account and the Georgia Fund account were reviewed by providing the bank statement. Also, to provide better separation of duties for capital assets, the Assistant Superintendent will review the process of identifying, valuating and posting of capital assets. These changes in the accounting procedures will be documented in the financial handbook. All changes will be implemented by January 2016. \n \nCash and Cash Equivalents Investments General Ledger Capital Assets Inadequate Internal Control Procedures Finding Control Number: FS 2014-001 \n \nThe accounting department will begin completing a formal bank reconciliation on all accounts regardless if the balance is immaterial or the activity is extremely low. In the past the activity in the Bus Driver's Assoc. account and the Georgia Fund account were reviewed by providing the bank statement. Also, to provide better separation of duties for capital assets, the Assistant Superintendent will review the process of identifying, valuating and posting of capital assets. These changes in the accounting procedures will be documented in the financial handbook. All changes will be implemented by January 2016. \n \n- 1 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2015 \n \nPRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \n \nFINDING CONTROL NUMBER \n \nAUDITEE'S RESPONSE/STATUS \n \nSEE AUDITOR'S COMMENT \n \nFA 2014-001 \n \nUnresolved - See Corrective Action/Responses \n \n(1) \n \nCORRECTIVE ACTION/RESPONSES \n \nActivities Allowed/Unallowed Allowable Costs/Cost Principles Inadequate Internal Control Procedures U.S. Department of Agriculture Through Georgia Department of Education Child Nutrition Cluster (CFDA 10.553, 10.555) Finding Control Number: FA 2014-001 \n \nThe Program Director will document and implement procedures to ensure that all expenditures are allowable under OMB A-87. Also, the Program bookkeeper has been instructed to dedicate blocks of uninterrupted time to process invoices so as to minimize distractions. The Program Director will closely monitor vouchers to ensure that they are accurate. These changes will be implemented by January 2016. \n \nAuditor's Comment (1) This finding is pending review by the Georgia Department of Education to determine if a refund \nis appropriate. \n \n- 2 - \n \n SECTION IV FINDINGS AND QUESTIONED COSTS \n \n (This page left intentionally blank) \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2015 \n \nI SUMMARY OF AUDITOR'S RESULTS \n \nFinancial Statements \n \nType of auditor's report issue: \n \nGovernmental Activities; General Fund; Capital Projects Fund; Debt Service Fund; Aggregate Remaining Fund Information \n \nInternal control over financial reporting: \n \n Material weakness identified?  Significant deficiency identified? \n \nNoncompliance material to financial statements noted: \n \nFederal Awards Internal Control over major programs: \n \n Material weakness identified?  Significant deficiency identified? \n \nType of auditor's report issued on compliance for major programs: \n \nAll major programs \n \nAny audit findings disclosed that are required to be reported in accordance with OMB Circular A-133, Section 510(a)? \n \nIdentification of major programs: \n \nCFDA Numbers \n \nName of Federal Program or Cluster \n \n10.553, 10.555 84.027, 84.173 \n \nChild Nutrition Cluster Special Education Cluster \n \nDollar threshold used to distinguish between Type A and Type B programs: \n \nAuditee qualified as low-risk auditee? \n \nUnmodified Yes Yes No \nNo Yes Unmodified Yes \n$300,000.00 No \n \n-1- \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2015 \n \nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \n \nFS 2015-001 Control Category: \nInternal Control Impact: Compliance Impact: Repeat of Prior Year Finding: \n \nInadequate Internal Control Procedures Cash and Cash Equivalents Investments Revenues/Receivables/Receipts Employee Compensation General Ledger Capital Assets Accounting System Significant Deficiency None FS-6591-13-01 and FS 2014-01 \n \nDescription: The accounting procedures of the School District were insufficient to provide for adequate internal controls at the Central Office and within the accounting system. \n \nCriteria: The School District's management is responsible for designing and maintaining internal controls that provide reasonable assurance that transactions are properly documented, approved, processed and recorded in accordance with the School District's established policies and procedures. \n \nCondition: The following deficiencies were noted within the School District's internal controls and accounting procedures: \n \nCash and Cash Equivalents  Bank reconciliations for two bank accounts were not performed in a timely manner.  One bank reconciliation lacked evidence of review and proper approval.  Controls were not in place to ensure that the internally pooled cash accounts netted to zero. \n \nInvestments The School District did not establish adequate separation of duties for the key accounting functions of initiating and recording of Investments. \n \nRevenues/Receivables/Receipts The School District did not establish adequate separation of duties for the key accounting functions of initiating, authorizing and recording of revenues. \n \nEmployee Compensation The School District did not establish adequate separation of duties for the key accounting functions of recording and processing of salaries and benefits. \n \nGeneral Ledger: A review of twenty seven journal entries revealed twelve journal entries lacked evidence of review and proper approval. \n \n-2- \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2015 \nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \nCapital Assets  The process of identification, valuation and posting of capitalizable assets were performed by one individual, with no review by someone independent of the Capital Asset process.  The School District did not calculate or record current year depreciation for capital assets deleted during the year under review.  Equipment and Land Improvements totaling $56,439.00 were not capitalized according to the School District's capital asset policy.  Software and equipment items totaling $19,727.69 were capitalized but did not meet the capitalization threshold as identified in the School District's capital asset policy.  A land improvement addition has a description of \"Landscaping\", which is not a capitalizable asset per the School District's capital asset policy.  Thirteen School Food Service equipment additions were recorded as having useful lives of five years although the capital asset policy indicates that \"Kitchen Equipment\" should have a useful life of twenty-five years. \nAccounting System  The financial director was also the system administrator. These key roles should be separated.  There was no evidence of an authorization process for granting access to the accounting system for new users. \nCause: In discussing these deficiencies with the School District, they indicated that the cause was a result of not having formal accounting procedures and a formal monitoring process in place. \nEffect or Potential Effect: Errors and/or irregularities may not be detected in a timely manner. \nRecommendation: The School District should review accounting procedures in place and design and implement procedures relative to the above control categories to strengthen the internal controls over the accounting functions and ensure that proper separation of duties exist for key accounting functions. In addition, management should establish a monitoring process to provide reasonable assurance that transactions are processed according to established procedures. \nViews of Responsible Officials and Corrective Action Plans: We concur with this finding. To better provide internal controls at the Central Office and within the accounting system, the following changes in accounting procedures have been: All bank reconciliations including two small immaterial accounts will be reviewed monthly instead of on a quarterly basis. Changes to the capital assets list will be reviewed and signed off by the assistant superintendent for improved separation of duties. The finance director will periodically review the journal entries for completeness of the superintendent's review. All revenues coming into the office requires three persons to review before recording. In addition, the superintendent will begin reviewing the receipt notebook for further oversight because some receipts are sent electronically. These changes were implemented by September 2016. \nContact Person: Tom Porter, Finance Director Telephone: (706) 384-4554 Fax: (706) 384-7472 E-mail: tporter@franklin.k12.ga.us \n-3- \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2015 \n \nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \n \nFS 2015-002 Control Category: Internal Control Impact: Compliance Impact: \n \nInadequate Controls over the Financial Reporting Financial Reporting Material Weakness N/A \n \nDescription: The School District did not have adequate internal controls in place to ensure that the financial statements presented for audit were materially correct. \n \nCriteria: Management is responsible for having adequate controls over the preparation of financial statements in accordance with generally accepted accounting principles (GAAP). The School District's internal controls over GAAP financial reporting should include adequately trained personnel with the knowledge, skills and experience to prepare GAAP based financial statements and include all disclosures as required by the Governmental Accounting Standards Board (GASB). \n \nGASB Statement No. 34, Basic Financial Statements  Management's Discussion and Analysis  for State and Local Governments (Statement), requires governments to present government-wide and fund financial statements as well as a summary reconciliation of the (a) total governmental funds balances to the net position of governmental activities in the Statement of Net Position, and (b) total change in governmental fund balances to the change in the net position of governmental activities in the Statement of Activities. In addition, the Statement requires information about the government's major and nonmajor funds in the aggregate, to be provided in the fund financial statements. \n \nChapter 22A, Annual Financial Reporting of the Financial Management for Georgia Local Units of Administration provides that School Districts must prepare their financial statements in accordance with generally accepted accounting principles. \n \nCondition: The financial statements as presented for audit, contained material and significant errors, misclassifications and omissions: \n On the Government-wide statements, a $2,325,345.22 reclassification entry was proposed and accepted by the client to properly classify Cash and Investments. \n Reclassification entries of $1,689,663.47 were proposed and accepted by the client to properly classify Net Position. \n On the Governmental Funds statements, Debt Service Fund Cash was overstated and Capital Projects Fund Cash was understated by $228,255.29. Material audit adjustments were proposed and accepted by the client to properly record Cash and Transfers. \n Other immaterial audit adjustments and reclassifications were proposed and accepted by the client to properly present the School District's financial statements. \n \nCause: In discussing this issue with the School District, it appears that the errors occurred primarily due to oversights in the financial statement review process. \n \nEffect or Potential Effect: Material and significant misstatements and misclassifications were included in the financial statements presented for audit. The lack of controls and monitoring could impact the reporting of the School District's financial and results of operation. \n-4- \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2015 II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS Recommendation: The School District should strengthen procedures over the financial statement reporting process to ensure that the financial statements presented for audit, including note disclosures are complete and accurate. These controls should include a monitoring process to evaluate the accuracy of the financial statements. These procedures should be performed by properly trained personnel possessing a thorough understanding of the applicable GAAP, GASB pronouncements and the School District's operations. Views of Responsible Officials and Corrective Action Plans: We concur with this finding. To review and assist the financial director with the reporting process, the School System will contract with a former Department of Education auditor to further ensure that the financial statements presented for audit are materially correct. This change was implemented by September 2016. Contact Person: Tom Porter, Finance Director Telephone: (706) 384-4554 Fax: (706) 384-7472 E-mail: tporter@franklin.k12.ga.us \n-5- \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2015 \n \nIII FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \n \nFA 2015-001 Compliance Requirement: Internal Control Impact: Compliance Impact: Federal Awarding Agency: Pass-Through Entity: CFDA Number and Title: \n \nInadequate Controls over Equipment Equipment and Real Property Management Significant Deficiency Nonmaterial Noncompliance U.S. Department of Agriculture Georgia Department of Education Child Nutrition Cluster (CFDA 10.553 and 10.555) \n \nDescription: The policies and procedures of the School District were insufficient to provide adequate internal controls over equipment and real property management as it relates to the Child Nutrition Cluster. \n \nCriteria: \n7 CFR 3016.32 (d)(1) states, \"Property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the cost of the property, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property.\" \n \nChapter 41, State and Federal Fiscal Rules and Procedures of the Financial Management for Georgia Local Units of Administration states, \"Equipment records must be maintained that include a description of the equipment, a serial number or other identification number, the vendor, title holder, acquisition date and cost, source of funding, percentage of federal participation in the cost of the equipment, the location use and condition, and any ultimate disposition data including the date of disposal and sale price of the equipment. A physical inventory of the equipment must be taken and the results reconciled with equipment records annually.\" \n \nCondition: The School District did not maintain an adequate equipment listing for the Child Nutrition Cluster including information regarding the equipment's cost, acquisition date, location, serial number, percentage of Federal participation in regards to cost, who holds title, use and condition of the property. Our test revealed that three equipment items in the high school kitchen were not recorded on the equipment listing submitted for audit. The School District also did not have inventory count documentation on file to support that an annual physical inventory of Child Nutrition Cluster equipment was performed. \n \nCause: In discussing the issue with Child Nutrition Cluster management, they stated that management had not effectively implemented Federal guidelines as they pertain to equipment and real property management. \n \nEffect or Potential Effect: Failure to maintain a proper, accurate equipment listing and supporting documentation of a physical inventory resulted in noncompliance with the Federal Grant requirements. \n \n-6- \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2015 III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Recommendation: The School District should strengthen controls over Child Nutrition Cluster equipment to ensure that the equipment records are complete and accurate. Management should conduct annual physical equipment inventories and reconcile the results to the equipment records. Documentation of the physical inventory should be maintained on file for audit. The equipment records should include description, identifying number, source, tile holder, acquisition date, cost, funding source, percentage of federal participation, location, condition and disposition data of each piece of equipment. Views of Responsible Officials and Corrective Action Plans: We concur with this finding. Since the audit, Kristin Schupp, Director of Food Services, and her staff have completed an extensive inventory of food service equipment and have tagged all equipment. This new inventory list describes the equipment in detail in compliance with all State and Federal rules. Contact Person: Tom Porter, Finance Director Telephone: (706) 384-4554 Fax: (706) 384-7472 E-mail: tporter@franklin.k12.ga.us \n-7- \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2015 \n \nIII FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \n \nFA 2015-002 Compliance Requirement: Internal Control Impact: Compliance Impact: Federal Awarding Agency: Pass-Through Entity: CFDA Number and Title: \n \nInadequate Internal Control Procedures Activities Allowed or Unallowed Significant Deficiency Nonmaterial Noncompliance U.S. Department of Agriculture Georgia Department of Education Child Nutrition Cluster (CFDA 10.553, 10.555 and 10.559) \n \nDescription: The School District did not have adequate controls in place to ensure that journal entries made for the Child Nutrition Cluster were accurate and properly documented. \n \nCriteria: Provisions of OMB Circular A-87, Cost Principles for State, Local and Indian Tribal Governments, require that \"to be allowable under Federal awards, costs must be authorized or not prohibited under state or local laws or regulations\" and \"supported by underlying documentation\". \n \nCondition: A review Child Nutrition Cluster journal entries revealed two journal entries made to record donated commodity activity were inaccurate. One of these journal entries was not supported by adequate documentation. The School District's monitoring/review process for journal entries did not identify these deficiencies. \n \nCause: In a discussion with Child Nutrition Cluster personnel, it was determined that amounts were pulled from the wrong column of the donated commodity reports when these journal entries were prepared. \n \nEffect or Potential Effect: Inadequate documentation for journal entries contributed to inaccuracies in the amounts posted to the accounting records which caused account balances to be misstated. Failure to ensure that program expenditures were accurate and properly documented resulted in noncompliance with requirements of the Federal grant. \n \nRecommendation: The School District should enhance internal controls and implement procedures to ensure that journal entries for the Child Nutrition Cluster reviewed for accuracy and adequately documented to ensure that expenditures are allowable as required by OMB Circular A-87. \n \nViews of Responsible Officials and Corrective Action Plans: We concur with this finding. As part of the monthly inventory procedure, the food managers attach the picking sheet with the inventory sheet. This ensures that the journal entries are made accurate and are properly documented for donated food. The food director reviews all journal entries made by the food service bookkeeper. All changes were implemented by September 2016. \n \nContact Person: Tom Porter, Finance Director Telephone: (706) 384-4554 Fax: (706) 384-7472 E-mail: tporter@franklin.k12.ga.us \n \n-8- \n \n "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-be26-bf8-b2014-belec-p-btext","title":"Franklin County Board of Education, Carnesville, Georgia, annual financial report for the fiscal year ended 2014 June 30 (including independent auditor's reports)","collection_id":"dlg_ggpd","collection_title":"Georgia Government Publications","dcterms_contributor":["Georgia. Department of Audits and Accounts, issuing body."],"dcterms_spatial":["United States, Georgia, 32.75042, -83.50018"],"dcterms_creator":["Georgia. Department of Audits and Accounts"],"dc_date":["2015-12-15"],"dcterms_description":["Financial report of the Franklin County Board of Education."],"dc_format":["application/pdf"],"dcterms_identifier":null,"dcterms_language":["eng"],"dcterms_publisher":["Atlanta, Ga. : Georgia. Department of Audits and Accounts"],"dc_relation":null,"dc_right":["http://rightsstatements.org/vocab/InC/1.0/"],"dcterms_is_part_of":null,"dcterms_subject":["Franklin County Board of Education (Ga.)--Appropriations and expenditures--Periodicals","Education--Georgia--Franklin County--Auditing--Periodicals","Education--Georgia--Franklin County--Finance--Statistics--Periodicals"],"dcterms_title":["Franklin County Board of Education, Carnesville, Georgia, annual financial report for the fiscal year ended 2014 June 30 (including independent auditor's reports)"],"dcterms_type":["Text"],"dcterms_provenance":["University of Georgia. Map and Government Information Library"],"edm_is_shown_by":["https://dlg.galileo.usg.edu/do:dlg_ggpd_y-ga-ba800-b-pr1-be26-bf8-b2014-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-be26-bf8-b2014-belec-p-btext"],"dcterms_temporal":null,"dcterms_rights_holder":null,"dcterms_bibliographic_citation":null,"dlg_local_right":null,"dcterms_medium":["annual reports","state government records","audits","financial records","financial statements"],"dcterms_extent":null,"dlg_subject_personal":null,"iiif_manifest_url_ss":null,"dcterms_subject_fast":null,"fulltext":"FRANKLIN COUNTY BOARD OF EDUCATION \nCARNESVILLE, GEORGIA \nANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2014 \n(Including Independent Auditor's Reports) \n \n FRANKLIN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \n \nSECTION I \n \nFINANCIAL \n \nINDEPENDENT AUDITOR'S REPORT \n \nREQUIRED SUPPLEMENTARY INFORMATION \n \nMANAGEMENT'S DISCUSSION AND ANALYSIS \n \nEXHIBITS \n \nBASIC FINANCIAL STATEMENTS \n \nDISTRICT-WIDE FINANCIAL STATEMENTS \n \nA \n \nSTATEMENT OF NET POSITION \n \nB \n \nSTATEMENT OF ACTIVITIES \n \nFUND FINANCIAL STATEMENTS \n \nC \n \nBALANCE SHEET \n \nGOVERNMENTAL FUNDS \n \nD \n \nRECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \n \nTO THE STATEMENT OF NET POSITION \n \nE \n \nSTATEMENT OF REVENUES, EXPENDITURES AND CHANGES \n \nIN FUND BALANCES \n \nGOVERNMENTAL FUNDS \n \nF \n \nRECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT \n \nOF REVENUES, EXPENDITURES AND CHANGES IN FUND \n \nBALANCES TO THE STATEMENT OF ACTIVITIES \n \nG \n \nSTATEMENT OF FIDUCIARY NET POSITION \n \nFIDUCIARY FUNDS \n \nH NOTES TO THE BASIC FINANCIAL STATEMENTS \n \nSCHEDULES \n \nREQUIRED SUPPLEMENTARY INFORMATION \n \n1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND \n \nPage \ni \n1 2 4 5 6 7 8 9 \n27 \n \n  FRANKLIN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \n \nSECTION I \nFINANCIAL \nSCHEDULES \nSUPPLEMENTARY INFORMATION \n2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 3 SCHEDULE OF STATE REVENUE 4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 5 ALLOTMENTS AND EXPENDITURES \nGENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) BY PROGRAM \n \nPage \n28 29 30 31 \n \nSECTION II \nCOMPLIANCE AND INTERNAL CONTROL REPORTS \nINDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS \nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 \n \nSECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS \n \nSECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS \n \n  SECTION I FINANCIAL \n \n  Greg S. Griffin \nSTATE AUDITOR \n(404) 656-2174 \n \nDEPARTMENT OF AUDITS AND ACCOUNTS \n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \nDecember 15, 2015 \n \nHonorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education \nand Superintendent and Members of the Franklin County Board of Education \nINDEPENDENT AUDITOR'S REPORT \nLadies and Gentlemen: \nReport on the Financial Statements \nWe have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information (Exhibits A through H) of the Franklin County Board of Education, as of and for the year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise the Board's basic financial statements as listed in the table of contents. \nManagement's Responsibility for the Financial Statements \nManagement is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. \nAuditor's Responsibility \nOur 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 Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. \nAn audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also \n2014ARL-11 \n \n  includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. \nWe believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. \nOpinions \nIn our opinion, the basic financial statements referred to above 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 Franklin County Board of Education, as of June 30, 2014, and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. \nEmphasis of Matter \nAs described in Note 2 to the financial statements, in 2014 the Franklin County Board of Education adopted new accounting guidance, Governmental Accounting Standards Board (GASB) Statement No. 65, Items Previously Reported as Assets and Liabilities. Our opinion is not modified with respect to this matter. \nOther Matters \nRequired Supplementary Information \nAccounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis and the Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on pages i through x and page 27 respectively, 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 regarding 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 our 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. \nOther Information \nOur audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Franklin County Board of Education's basic financial statements. The accompanying supplementary information, consisting of Schedules 2 through 5, is presented for the purposes of additional analysis and is not a required part of the basic financial statements. The Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is not a required part of the basic financial statements. \nThe accompanying supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare \n2014ARL-11 \n \n  the basic financial statements or to the basic 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 basic financial statements as a whole. \nOther Reporting Required by Government Auditing Standards \nIn accordance with Government Auditing Standards, we have also issued our report dated December 15, 2015, on our consideration of the Franklin County 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 Auditing Standards in considering Franklin County Board of Education's internal control over financial reporting and compliance. \nA 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. \nRespectfully submitted, \n \nGSG:as 2014ARL-11 \n \nGreg S. Griffin State Auditor \n \n  FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 \n \nINTRODUCTION \nThe School District's financial statements for the fiscal year ended June 30, 2014 includes a series of basic financial statements that report financial information for the District as a whole, its funds, and its fiduciary responsibilities. The Statement of Net Position and the Statement of Activities provide financial information about all of the School District's activities and present both a short-term and longterm view of the School District's finances on a global basis. The fund financial statements provide information about all of the School District's funds. Information about these funds, such as the School District's General Fund, is important in its own right, but will also give insight into the School District's overall soundness as reported in the Statement of Net Position and the Statement of Activities. \nFINANCIAL HIGHLIGHTS \nKey financial highlights for fiscal year 2014 are as follows: \nOn the District-wide financial statements: \n The District's net position at June 30, 2014 was $63.6 million. Net position reflects the difference between all assets of the District (including capital assets, net of depreciation) and all liabilities, both short- term and long-term, and deferred inflows of resources. The net position at June 30, 2014 of $63.6 million represented an increase of almost $4.3 million when compared to the prior year. \n The School District had $33.2 million in expenses relating to governmental activities; about $23.7 million of these expenses were offset by program specific charges for services, grants and contributions. However, general revenues (primarily property and sales taxes) of $13.9 million were adequate to provide for these programs. \n As stated above, general revenues accounted for $13.9 million or about 37% of all revenues totaling $37.6 million. Program specific revenues in the form of charges for services, grants, and contributions accounted for the balance of these revenues. (Percentages in table below rounded to one decimal place) \n \nSource of Revenues \n \nProgram Revenues \n63.1% \n \nGeneral Revenue - Property Taxes \n25.1% \n \nGeneral Revenue - Sales Taxes 8.9% \nGeneral Revenue - All Other 2.9% \n \ni \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 \nOn the fund financial statements: \n Among major funds, the General Fund had $31.7 million in revenues and $31.9 million in expenditures. The General Fund balance of $3.8 million at June 30, 2014 decreased by roughly $0.2 million from the prior year. The decrease in General Fund Balance occurred primarily because District's expenditures were almost $0.5 million greater than the prior year where revenues actually declined as compared to the prior year. \nOVERVIEW OF THE FINANCIAL STATEMENTS \nThese financial Statements consists of three parts: management's discussion and analysis (this section), the basic financial statements including notes to the financial statements and required supplementary information. The basic financial statements include two levels of statements that present different views of the School District. These include the District-wide and fund financial statements. \nThe District-wide financial statements include the 'Statement of Net Position' and 'Statement of Activities'. These statements provide information about the activities of the School District presenting both short-term and long-term information about the School District's overall financial status. \nThe fund financial statements focus on individual parts of the School District, reporting the School District's operation in more detail. The 'Governmental Funds' statements disclose how basic services are financed in the short-term as well as what remains for future spending. The 'Fiduciary Funds' statements provide information about the financial relationships in which the School District acts solely as a trustee or agent for the benefit of others. In the case of the Franklin County School District, the General Fund, Capital Projects Funds, and Debt Service Funds are all considered to be major funds. The District has no funds reported as nonmajor funds as defined by generally accepted accounting principles. \nThe financial statements also include notes that explain some of the information in the statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and supports the financial statements. Additionally, other supplementary information (not required) is also presented that further supplements understanding of the financial statements. \nDistrict-wide Statements \nSince Franklin County School District has no operations that have been classified as \"Business Activities\", the District-wide financial statements are basically a consolidation of all of the School District's operating funds into one column called governmental activities. In reviewing the District-wide financial statements, a reader might ask the question, are we in a better financial position now than last year? The 'Statement of Net Position' and the 'Statement of Activities' provide the basis for answering this question. These financial statements include all School District's assets and liabilities and uses the accrual basis of accounting similar to the accounting used by most private-sector companies. This basis of accounting takes into account all of the current year's revenues and expenses regardless of when cash is received or paid. \nThese two statements report the School District's net position and any changes in net position. The change in net position is important because it tells the reader that, for the School District as a whole, the financial position of the School District has improved or diminished. The causes of this change \nii \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 \nmay be the results of many factors, including those not under the School District's control, such as the property tax base, facility conditions, required educational programs, student-teacher ratios, and other factors. \nWhen analyzing District-wide financial statements, it is important to remember these statements are prepared using an economic resources measurement focus (accrual accounting) and involve the following steps to format the Statement of Net Position: \n Capitalize current outlays for capital assets  Depreciate capital assets  Report long-term debt as a liability  Calculate revenue and expense using the economic resources measurement focus and the \naccrual basis of accounting  Allocate net position as follows: \no Net Investment in capital assets o Restricted net position is amounts with constraints placed on the use by external \nsources such as creditors, grantors, contributors or laws and regulations. o Unrestricted for no specific use \nFund Financial Statements \nThe School District uses many funds or sub-funds to account for a multitude of financial transactions during the fiscal year. The fund financial statements presented in this report provide detail information about the School District's significant or major funds. As discussed previously, the District has no nonmajor funds as defined by generally accepted accounting principles. \nThe District has two kinds of funds as discussed below: \nGovernmental Funds  Most of the School District's activities are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end available for spending in future periods. These funds are reported using the modified accrual method of accounting which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the School District's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance educational programs. The differences between government activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds are reconciled in the financial statements. \nFiduciary Funds  The School District is the trustee, or fiduciary, for assets that belong to clubs, organizations and others within the principals' accounts. The School District is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. The School District excludes these activities from the district-wide financial statements because it cannot use these assets to finance its operations. \niii \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 \nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT AS A WHOLE Net position, which is the difference between total assets and deferred outflows of resources, and total liabilities and deferred inflows of resources, is one indicator of the financial condition of the District. When revenues exceed expenses, the result is an increase in net position. When expenses exceed revenues, the result is a decrease in net position. The relationship between revenues and expenses can be thought of as the School District's operating results. The School District's net position, as measured in the Statement of Net Position is one way to measure the School District's financial health, or financial position. Over time, increases or decreases in the School District's net position, as measured in the Statement of Activities, are one indicator of whether its financial health is improving or deteriorating. However, the School District's goal and mission is to provide success for each child's education, not to generate profits as private corporations do. For this reason, many other nonfinancial factors should be considered in assessing the overall health of the District. In the case of the Franklin County School District, assets exceeded liabilities and deferred inflows of resources by $63.6 million at June 30, 2014. To better understand the School District's actual financial position and ability to deliver services in future periods, it is necessary to review the various components of the net position category. For example, of the $63.6 million of net position, $2.3 million was restricted for continuation of various State and Federal programs, debt service and ongoing capital projects. Accordingly, these funds were not available to meet the School District's ongoing obligations to citizens and creditors. In addition, the District had just almost $59.1 million (net of related debt) invested in capital assets (e.g., land, buildings, and equipment). The District uses these capital assets to provide educational services to students within geographic boundaries served by the District. Because of the very nature and on-going use of the assets being reported in this component of net position, it must be recognized that this portion of the net position is not available for future spending. The remaining balance of unrestricted net position of $2.3 million may be used to meet the School District's ongoing obligations to citizens and creditors. \niv \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 \n \nTable 1 provides a summary of the School District's net position for this fiscal year as compared to the prior fiscal year. \n \nTable 1 Net Position \n \nGovernmental Activities \n \nFiscal \n \nFiscal \n \nYear 2014 \n \nYear 2013 \n \nAssets Current and Other Assets Capital Assets, Net \n \n$ 14,664,146 $ 18,573,993 65,126,682 59,298,409 \n \nTotal Assets \n \n79,790,828 77,872,402 \n \nLiabilities Current and Other Liabilities Long-Term Liabilities \n \n4,950,540 10,823,015 \n \n5,330,882 13,248,769 \n \nTotal Liabilities \n \n15,773,555 18,579,651 \n \nDeferred Inflows of Resources \n \n389,179 \n \nTotal Liabilities and Deferred Inflows of Resources \n \n16,162,734 18,579,651 \n \nNet Position Net Investment in Capital Assets Restricted Unrestricted \n \n59,065,411 2,281,068 2,281,615 \n \n51,287,528 5,284,595 2,720,628 \n \nTotal Net Position \n \n$ 63,628,094 $ 59,292,751 \n \nThis change in net position is detailed in Table 2 as presented below. Table 2 also shows the changes in net position as compared to the prior fiscal year. \n \nv \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 \n \nTable 2 Change in Net Position \n \nRevenues Program Revenues: Charges for Services and Sales Operating Grants and Contributions Capital Grants and Contributions \n \nGovernmental Activities \n \nFiscal Year \n \nFiscal Year \n \n2014 \n \n2013 \n \n$ \n \n538,014 $ \n \n581,167 \n \n19,966,584 \n \n20,576,050 \n \n3,213,419 \n \n3,784,158 \n \nTotal Program Revenues \n \n23,718,017 \n \n24,941,375 \n \nGeneral Revenues: Taxes Property Taxes Sales Taxes Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous \nSpecial Items Loss on Disposal of Capital Assets \n \n9,419,608 3,361,882 \n687,014 33,495 \n754,344 \n-391,624 \n \n9,199,957 3,483,918 \n470,045 37,698 \n1,095,820 \n \nTotal General Revenues and Special Items \n \n13,864,719 \n \n14,287,438 \n \nTotal Revenues \n \n37,582,736 \n \n39,228,813 \n \nProgram Expenses: 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 Operations of Non-Instructional Services Enterprise Operations Food Services Interest on Short-Term and Long-Term Debt \n \n20,830,729 \n1,043,352 1,503,287 \n527,964 404,377 1,907,402 254,265 2,241,216 2,147,174 \n2,140 215,426 \n284,687 1,622,278 \n263,096 \n \n21,162,973 \n1,085,594 1,370,202 \n490,764 405,724 1,971,600 373,658 2,189,014 2,129,679 \n879 230,969 \n417,899 1,591,575 \n402,351 \n \nTotal Expenses \n \n33,247,393 \n \n33,822,881 \n \nIncrease in Net Position \n \n$ \n \n4,335,343 $ \n \n5,405,932 \n \nvi \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 \n \nCost of Providing Services \nThe Statement of Activities shows the cost of program services and the charges for services and grants offsetting these services. Table 3 shows, for governmental activities, the total cost of services and the net cost of services. Net cost of services can be defined as the total cost less fees generated by the activities and intergovernmental revenue provided for specific programs. The net cost reflects the financial burden on the School District's taxpayers by each activity as compared to the prior fiscal year. \n \nTable 3 Governmental Activities \n \nTotal Cost of Services \n \nFiscal \n \nFiscal \n \nYear 2014 \n \nYear 2013 \n \nNet Cost of Services \n \nFiscal \n \nFiscal \n \nYear 2014 \n \nYear 2013 \n \nInstruction \n \n$ \n \nSupport Services: \n \nPupil Services \n \nImprovement of Instructional Services \n \nEducational Media Services \n \nGeneral Administration \n \nSchool Administration \n \nBusiness Administration \n \nMaintenance and Operation of Plant \n \nStudent Transportation Services \n \nCentral Support Services \n \nOther Support Services \n \nOperations of Non-Instructional Services: \n \nEnterprise Operations \n \nFood Services \n \nInterest on Short-Term and Long-Term Debt \n \n20,830,729 $ \n1,043,352 1,503,287 \n527,964 404,377 1,907,402 254,265 2,241,216 2,147,174 \n2,140 215,426 \n284,687 1,622,278 \n263,096 \n \n21,162,973 $ \n1,085,594 1,370,202 \n490,764 405,724 1,971,600 373,658 2,189,014 2,129,679 \n879 230,969 \n417,899 1,591,575 \n402,351 \n \n4,287,958 $ \n769,615 841,333 \n-3,020 -363,265 869,568 249,082 1,064,473 1,321,833 \n2,140 16,635 \n185,452 24,476 \n263,096 \n \n3,322,484 \n947,188 812,310 -63,094 -328,542 720,279 335,098 1,010,664 1,427,538 \n879 187,832 \n325,324 -218,805 402,351 \n \nTotal Expenses \n \n$ \n \n33,247,393 $ \n \n33,822,881 $ \n \n9,529,376 $ \n \n8,881,506 \n \nExpenses in fiscal year 2014 decreased modestly by $575,000 from the prior year, while the net cost of providing services increased by $648,000. The costs of providing services in fiscal year 2014 compared to fiscal year 2013 increased disproportionately because Program Revenues in fiscal year 2014 decreased by about $1.2 million. These decreases occurred because of reductions in State Operating Grants and Capital Outlay Grants in fiscal year 2014 as compared to fiscal year 2013. \n \nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT'S FUNDS \n \nInformation about the School District's governmental funds is presented starting on Exhibit \"C\" of this report. Governmental funds are accounted for using the modified accrual basis of accounting. The governmental funds had total revenues of $41.2 million and total expenditures of $41.9 million in fiscal year 2014. Total governmental fund balances of $8.6 million at June 30, 2014, decreased over $700,000 from the prior year. \n \nvii \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 \n \nGeneral Fund Budget Highlights \nThe School District's budget is prepared according to Georgia Law. The most significant budgeted fund is the General Fund. During the course of fiscal year 2014, the School District amended its general fund budget as needed. \nThe School District budget is adopted at the aggregate level and maintained at the program, function, object, and site levels to facilitate budgetary control. The budgeting systems are designed to control the total budget, but provide flexibility to meet the ongoing programmatic needs. The budgeting systems are also designed to control total site budgets but provide flexibility for site management as well. \nFor the General Fund, the final actual revenues of $31.7 million exceeded the final budget by $2.7 million. This variance occurred largely because Federal Funds exceeded the final budget by roughly $923,000, Charges for Services exceeded the final budget by $472,000 and Miscellaneous Revenues exceed the final budget by $714,000. \nThe General Fund's final actual expenditures of $31.9 million exceeded the final budget by $488,000. This variance occurred primarily because Food Services expenditures exceed the final budget by roughly $700,000. \nCAPITAL ASSETS AND DEBT ADMINISTRATION \nCapital Assets \n \nAt fiscal year ended June 30, 2014, the School District had $65.1 million invested in capital assets, net of accumulated depreciation, all in governmental activities. These assets are made up of a broad range of items including buildings; land; land improvements; and food service, transportation and maintenance equipment; and intangible assets. Table 4 reflects a summary of these balances, net of accumulated depreciation, as compared to the prior fiscal year. \n \nTable 4 Capital Assets (Net of Depreciation) \n \nGovernmental Activities \n \nFiscal \n \nFiscal \n \nYear 2014 \n \nYear 2013 \n \nLand Construction In Progress Land Improvements Building and Improvements Equipment Intangible Assets \n \n$ \n \n1,370,442 $ \n \n15,043,816 \n \n6,698,795 \n \n40,243,122 \n \n1,712,809 \n \n57,698 \n \n1,370,441 7,990,602 6,792,956 41,279,068 1,819,706 \n45,636 \n \nTotal \n \n$ \n \n65,126,682 $ \n \n59,298,409 \n \nAdditional information about the School District's Capital Assets can be found in the Notes to the Financial Statements. \n \nviii \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 \n \nLong-Term Debt \nAt June 30, 2014, the School District had $10.8 million in total debt outstanding which was consisted of just over $9.9 million in bond debt and $900,000 in unamortized bond premiums. Table 5 summarizes the School District's debt as compared to the prior fiscal year. \n \nTable 5 Debt at June 30 \n \nGovernmental Activities \n \nFiscal \n \nFiscal \n \nYear 2014 \n \nYear 2013 \n \nBonds Payable \n \n$ \n \n9,920,000 $ \n \n12,120,000 \n \nUnamortized Bond Premium \n \n903,016 \n \n1,128,769 \n \nTotal \n \n$ \n \n10,823,016 $ \n \n13,248,769 \n \nAdditional information about the School District's debt can be found in the Notes to the Financial Statements. \n \nFACTORS BEARING ON THE DISTRICT'S FUTURE \n \nCurrently known circumstances that are expected to have a significant effect on financial position or results of operations in future years are as follows: \n \n The District is financially stable. The School District's operating millage for fiscal year 2014 was 16.688, which produced about $560,268 per mill. The School District continues to maintain a stable enrollment of about 3,600 students. The District plans to fund additional capital outlays with the one percent local sales tax revenue and state capital outlay grants. \n \n The School District continues to be financially challenged by the continuing slow economy. Although revenues from property taxes increased $352,900 from the prior year, General Fund revenues from State and Federal Sources combined actually decreased by roughly $316,000 from the prior year. State and Federal revenues constituted about 65% of the District's General Fund revenues in fiscal year 2014. \n \n Despite the constrained levels of revenues realized in fiscal year 2014, the School District is in excellent financial condition. The General Fund had an unassigned fund balance of almost $2.8 million at June 30, 2014. The Board anticipates significant financial challenges going forward due to expected continued flat revenues and higher health insurance costs for employees. In spite of these challenges, the School District will continue to be a good steward of tax dollars while providing a quality educational opportunity. \n \n In fiscal year 2015, the School District will adopt Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions. The provisions of this Statement establish accounting and financial reporting standards for pensions that are provided to the employees of state and local governmental employers through pension plans that are administered through trusts. Implementation of this statement will require the School District to \n \nix \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 record a liability for its proportionate share of the Net Pension Liability of pension plans in which it participates. Based on information provided by the Teacher Retirement System of Georgia (TRS), the School District's liability for its proportionate share of the Net Pension Liability of the pension plan administered through TRS is estimated to be $20.8 million at June 30, 2015. CONTACTING THE SCHOOL DISTRICT'S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, investors and creditors with a general overview of the School District's finances and to show the School District's accountability for the money it receives. If you have questions about this report or need additional financial information, contact Mr. Tom Porter, Finance Director, Franklin County Board of Education, 280 Busch Road, Carnesville, Georgia 30521. You may also email your questions to Mr. Porter at tporter@franklin.k12.ga.us. \nx \n \n FRANKLIN COUNTY BOARD OF EDUCATION \n \n  FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF NET POSITION JUNE 30, 2014 \nASSETS \nCash and Cash Equivalents Investments Accounts Receivable, Net \nTaxes State Government Federal Government Local Other Inventories Capital Assets, Non-Depreciable Capital Assets, Depreciable (Net of Accumulated Depreciation) \nTotal Assets \nLIABILITIES \nAccounts Payable Salaries and Benefits Payable Payroll Withholdings Payable Interest Payable Contracts Payable Retainages Payable Long-Term Liabilities \nDue Within One Year Due in More Than One Year \nTotal Liabilities \nDEFERRED INFLOWS OF RESOURCES \nPrepaid Property Tax Revenue \nNET POSITION \nNet Investment in Capital Assets Restricted for \nContinuation of Federal Programs Debt Service Capital Projects Unrestricted \nTotal Net Position \n \nEXHIBIT \"A\" \n \nGOVERNMENTAL ACTIVITIES \n \n$ \n \n8,136,637.23 \n \n1,843,644.86 \n \n1,235,978.96 2,991,645.94 \n390,528.07 16,288.89 2,182.37 47,240.30 \n16,414,257.72 48,712,423.93 \n \n79,790,828.27 \n \n693,431.20 3,533,124.86 \n4,612.51 147,258.33 403,047.00 169,066.00 \n2,625,753.88 8,197,261.66 \n15,773,555.44 \n \n389,179.00 \n \n59,065,410.77 \n599,979.31 1,451,969.66 \n229,118.76 2,281,615.33 \n \n$ 63,628,093.83 \n \nThe notes to the basic financial statements are an integral part of this statement. - 1 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES \nFOR THE YEAR ENDED JUNE 30, 2014 \n \nGOVERNMENTAL ACTIVITIES \nInstruction Support Services \nPupil 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 Operations of Non-Instructional Services Enterprise Operations Food Services Interest on Short-Term and Long-Term Debt \nTotal Governmental Activities \nGeneral Revenues Taxes Property Taxes For Maintenance and Operations Sales Taxes Special Purpose Local Option Sales Tax For Capital Projects Other Sales Tax Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous \nSpecial Item Loss on Disposal of Capital Assets \nTotal General Revenues and Special Item \nChange in Net Position \nNet Position - Beginning of Year \nNet Position - End of Year \n \nEXPENSES \n \nCHARGES FOR SERVICES \n \n$ 20,830,728.52 $ \n1,043,352.28 1,503,286.66 \n527,963.68 404,377.33 1,907,402.33 254,264.99 2,241,215.65 2,147,174.48 \n2,139.87 215,425.57 \n284,687.15 1,622,278.27 \n263,096.22 \n$ 33,247,393.00 $ \n \n42,158.87 \n45,500.00 39,438.69 99,234.94 311,681.36 538,013.86 \n \nThe notes to the basic financial statements are an integral part of this statement. - 2 - \n \n EXHIBIT \"B\" \n \nPROGRAM REVENUES OPERATING GRANTS AND \nCONTRIBUTIONS \n \nCAPITAL GRANTS AND CONTRIBUTIONS \n \nNET (EXPENSES) REVENUES \nAND CHANGES IN NET POSITION \n \n$ \n \n13,755,964.48 $ \n \n273,736.83 661,953.92 477,564.00 602,617.03 1,037,834.00 \n5,183.45 1,104,820.81 \n709,683.51 \n \n51,104.88 \n \n1,286,120.97 \n \n$ \n \n19,966,583.88 $ \n \n2,744,647.71 $ \n53,419.34 165,025.20 \n26,421.73 76,219.50 147,686.03 \n3,213,419.51 \n \n-4,287,957.46 \n-769,615.45 -841,332.74 \n3,019.66 363,264.90 -869,568.33 -249,081.54 -1,064,473.11 -1,321,832.78 \n-2,139.87 -16,634.66 \n-185,452.21 -24,475.94 \n-263,096.22 \n-9,529,375.75 \n \n9,419,608.21 \n3,225,500.71 136,380.55 687,014.00 33,495.21 754,344.17 \n-391,623.78 \n13,864,719.07 \n4,335,343.32 \n59,292,750.51 \n \n$ \n \n63,628,093.83 \n \n- 3 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION BALANCE SHEET \nGOVERNMENTAL FUNDS JUNE 30, 2014 \n \nEXHIBIT \"C\" \n \nASSETS \nCash and Cash Equivalents Investments \nTaxes State Government Federal Government Local Other Inventories \nTotal Assets \n \nGENERAL FUND \n \nDISTRICTWIDE \nCAPITAL PROJECTS \nFUND \n \nDEBT SERVICE \nFUND \n \nTOTAL \n \n$ 4,713,931.73 $ 3,422,705.50 \n \n$ \n \n532,141.88 $ 1,311,502.98 \n \n948,253.95 \n \n287,725.01 \n \n2,299,510.14 \n \n692,135.80 \n \n390,528.07 \n \n16,288.89 \n \n2,182.37 \n \n47,240.30 \n \n8,136,637.23 1,843,644.86 1,235,978.96 2,991,645.94 \n390,528.07 16,288.89 2,182.37 47,240.30 \n \n$ 8,417,935.45 $ 4,646,983.18 $ 1,599,227.99 $ 14,664,146.62 \n \nLIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES \n \nLIABILITIES \n \nAccounts Payable Salaries and Benefits Payable Payroll Withholdings Payable Contracts Payable Retainages Payable \n \n$ 524,705.63 $ 3,533,124.86 4,612.51 \n \n168,725.57 \n403,047.00 169,066.00 \n \n$ \n \n693,431.20 \n \n3,533,124.86 \n \n4,612.51 \n \n403,047.00 \n \n169,066.00 \n \nTotal Liabilities \n \n4,062,443.00 \n \n740,838.57 \n \n4,803,281.57 \n \nDEFERRED INFLOWS OF RESOURCES \n \nUnavailable Revenue - Property Taxes Unavailable Revenue - GSFIC \n \n546,730.04 \n \n692,135.80 \n \n546,730.04 692,135.80 \n \nTotal Deferred Inflows of Resources \n \n546,730.04 \n \n692,135.80 \n \n1,238,865.84 \n \nFUND BALANCES \n \nNonspendable Restricted Committed Unassigned \n \n47,240.30 552,739.01 447,148.08 2,761,635.02 \n \n3,214,008.81 $ 1,599,227.99 \n \n47,240.30 5,365,975.81 \n447,148.08 2,761,635.02 \n \nTotal Fund Balances \n \n3,808,762.41 \n \n3,214,008.81 \n \n1,599,227.99 \n \n8,621,999.21 \n \nTotal Liabilities, Deferred Inflows of Resources and Fund Balances $ 8,417,935.45 $ 4,646,983.18 $ 1,599,227.99 $ 14,664,146.62 \n \nThe notes to the basic financial statements are an integral part of this statement. - 4 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \nTO THE STATEMENT OF NET POSITION JUNE 30, 2014 \n \nEXHIBIT \"D\" \n \nTotal Fund Balances - Governmental Funds (Exhibit \"C\") \nAmounts reported for Governmental Activities in the Statement of Net Position are different because: \nCapital Assets used in Governmental Activities are not financial resources and therefore are not reported as assets in governmental funds. These assets consist of: \nLand Construction in Progress Land Improvements Buildings Equipment Intangible Assets Accumulated Depreciation \nTotal Capital Assets \nTaxes that are not available to pay for current period expenditures are deferred in the governmental funds. \nProperty Taxes \nGeorgia State Financing and Investment Commission grants that are not available to pay current period expenditures are deferred in the funds. \nLong-Term Liabilities, including Bonds Payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. Long-Term Liabilities at year-end consist of: \nBonds Payable Accrued Interest Payable Bond Premiums, Net of Amortization \nTotal Long-Term Liabilities \nNet Position of Governmental Activities (Exhibit \"A\") \n \n$ \n \n8,621,999.21 \n \n$ 1,370,441.39 15,043,816.33 7,691,211.19 49,072,236.70 5,470,616.86 128,249.62 -13,649,890.44 \n \n65,126,681.65 \n \n157,551.04 692,135.80 \n \n$ -9,920,000.00 -147,258.33 -903,015.54 \n \n-10,970,273.87 \n \n$ 63,628,093.83 \n \nThe notes to the basic financial statements are an integral part of this statement. - 5 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES \nGOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2014 \n \nEXHIBIT \"E\" \n \nREVENUES \nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous \nTotal Revenues \nEXPENDITURES \nCurrent 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 Food Services Operation \nCapital Outlay Debt Services \nPrincipal Dues and Fees Interest \nTotal Expenditures \nNet Change in Fund Balances \nFund Balances - Beginning \nFund Balances - Ending \n \nGENERAL FUND \n \nDISTRICTWIDE \nCAPITAL PROJECTS \nFUND \n \nDEBT SERVICE \nFUND \n \nTOTAL \n \n$ 9,533,665.78 136,380.55 \n17,375,529.61 $ 3,354,287.78 538,013.86 29,330.63 754,344.17 \n \n$ 6,229,222.20 \n \n$ 3,225,500.71 \n4,164.58 \n \n9,533,665.78 3,361,881.26 23,604,751.81 3,354,287.78 \n538,013.86 33,495.21 \n754,344.17 \n \n31,721,552.38 \n \n6,229,222.20 \n \n3,229,665.29 \n \n41,180,439.87 \n \n20,011,479.79 \n1,043,352.28 1,503,286.66 \n513,827.74 404,377.33 1,844,922.63 241,643.15 2,236,612.20 2,003,499.80 \n2,139.87 215,425.57 284,687.15 1,586,836.41 \n31,892,090.58 \n-170,538.20 \n3,979,300.61 \n \n16,030.50 \n7,296,072.55 3,075.00 \n7,315,178.05 -1,085,955.85 4,299,964.66 \n \n2,200,000.00 507,775.00 \n2,707,775.00 521,890.29 \n1,077,337.70 \n \n20,011,479.79 \n1,043,352.28 1,503,286.66 \n513,827.74 404,377.33 1,844,922.63 241,643.15 2,236,612.20 2,019,530.30 \n2,139.87 215,425.57 284,687.15 1,586,836.41 7,296,072.55 \n2,200,000.00 3,075.00 \n507,775.00 \n41,915,043.63 \n-734,603.76 \n9,356,602.97 \n \n$ 3,808,762.41 $ 3,214,008.81 $ 1,599,227.99 $ 8,621,999.21 \n \nThe notes to the basic financial statements are an integral part of this statement. - 6 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF \nREVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2014 \n \nEXHIBIT \"F\" \n \nTotal Net Change in Fund Balances - Governmental Funds (Exhibit \"E\") \nAmounts reported for Governmental Activities in the Statement of Activities are different because: \nCapital Outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activities, the cost of Capital Assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are: \nCapital Outlay Depreciation Expense \nExcess of Capital Outlay over Depreciation Expense \nThe net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, donations, and disposals) is to decrease net position. \nTaxes reported in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. \nGrant Revenues from the Georgia State Financing and Investments Commission not available to pay current expenditures are not required to be deferred in the Statement of Activities as they are in the Fund Statements. \nRepayment of Long-Term Debt is reported as an expenditure in Governmental Funds, but the repayment reduces Long-Term Liabilities in the Statement of Net Position. In the current year, these amounts consist of: \nBond Principal Retirements Amortization of Bond Premiums \nTotal Long-Term Debt Repayments \nInterest expense reported in the Statement of Activities is recorded as incurred, whereas interest expense in the governmental fund statements is reported when paid. \nChange in Net Position of Governmental Activities (Exhibit \"B\") \n \n$ -734,603.76 \n \n$ 7,247,722.30 -1,027,825.45 \n \n6,219,896.85 \n \n-391,623.78 \n \n-114,057.57 \n \n-3,092,022.20 \n \n$ 2,200,000.00 225,753.88 \n \n2,425,753.88 \n \n21,999.90 \n \n$ 4,335,343.32 \n \nThe notes to the basic financial statements are an integral part of this statement. - 7 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET POSITION \nFIDUCIARY FUNDS JUNE 30, 2014 \nASSETS Cash and Cash Equivalents \nLIABILITIES Funds Held for Others \n \nEXHIBIT \"G\" \nAGENCY FUNDS $ 140,269.94 \n$ 140,269.94 \n \nThe notes to the basic financial statements are an integral part of this statement. - 8 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2014 \n \nEXHIBIT \"H\" \n \nNote 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY \nREPORTING ENTITY \nThe Franklin County 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. \nNote 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES \nBASIS OF PRESENTATION \nThe 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 Franklin County Board of Education. \nDistrict-wide Statements: The Statement of Net Position 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. \nThe Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities. \n Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of 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. \n 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. \nFund Financial Statements: 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 District has no funds that were reported as nonmajor funds. \nThe School District reports the following major governmental funds: \n General Fund is the School District's primary operating fund. It accounts for and reports all financial resources not accounted for and reported in another fund. \n \n- 9 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2014 \n \nEXHIBIT \"H\" \n \n District-wide Capital Projects Fund accounts for and reports financial resources including Education Special Purpose Local Option Sales Tax (ESPLOST), Bond Proceeds and grants from Georgia State Financing and Investment Commission that are restricted, committed or assigned to the expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets. \n Debt Service Fund accounts for and reports financial resources that are restricted, committed, or assigned including taxes (sales) legally restricted for the payment of general long-term principal and interest. \nThe School District reports the following fiduciary fund type: \n Agency funds account for assets held by the School District as an agent for various funds, governments, clubs, or individuals. \nBASIS OF ACCOUNTING \nThe 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 is recognized in the fiscal year in which all eligibility requirements have been satisfied. \nThe 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. \nGovernmental 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. The School District considers all intergovernmental revenues to be available if they are collected within 120 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, except for principal and interest on general longterm debt, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities and acquisitions under capital leases are reported as other financing sources. \nThe 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. \n \n- 10 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2014 \n \nEXHIBIT \"H\" \n \nNEW ACCOUNTING PRONOUNCEMENTS \nIn fiscal year 2014, the School District adopted the Governmental Accounting Standards Board (GASB) Statement No. 65, Items Previously Reported as Assets and Liabilities. The provisions of this Statement establish accounting and financial reporting standards that reclassify, as deferred outflows or deferred inflows of resources, certain items that were previously reported as assets and liabilities and recognizes, as outflows or inflows of resources, certain items that were previously reported as assets and liabilities. The District had no matters which required a restatement as required by this new pronouncement. \nFUTURE ACCOUNTING PRONOUNCEMENTS \nIn fiscal year 2015, the School District will adopt Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions. The provisions of this Statement establish accounting and financial reporting standards for pensions that are provided to the employees of state and local governmental employers through pension plans that are administered through trusts. Implementation of this statement will require the School District to record a liability for its proportionate share of the Net Pension Liability of pension plans in which it participates. Based on information provided by the Teacher Retirement System of Georgia (TRS), the School District's liability for its proportionate share of the Net Pension Liability of the pension plan administered through TRS is estimated to be $20.8 million at June 30, 2015. \nCASH AND CASH EQUIVALENTS \nComposition 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. \nINVESTMENTS \nComposition of Investments Investments made by the School District in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning 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: \n(1) Obligations issued by the State of Georgia or by other states, \n(2) Obligations issued by the United States government, \n(3) Obligations fully insured or guaranteed by the United States government or a United States government agency, \n \n- 11 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2014 \n \nEXHIBIT \"H\" \n \n(4) Obligations of any corporation of the United States government, \n \n(5) Prime banker's acceptances, \n \n(6) The local government investment pool (Georgia Fund 1) administered by the State of Georgia, Office of the State Treasurer, \n \n(7) Repurchase agreements, and \n \n(8) Obligations of other political subdivisions of the State of Georgia. \n \nThe 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. \n \nRECEIVABLES \n \nReceivables 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. \n \nPROPERTY TAXES \n \nThe Franklin County Board of Commissioners adopted the property tax levy for the 2013 tax digest year (calendar year) on July 25, 2013 (levy date) based on property values as of January 1, 2013. Taxes were due on November 15, 2013 (due date) Taxes collected within the current fiscal year or within 60 days after year-end on the 2013 tax digest are reported as revenue in the governmental funds for fiscal year 2014. The Franklin County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2014, for maintenance and operations amounted to $9,533,665.78. \n \nThe tax millage rate levied for the 2013 tax year (calendar year) for the Franklin County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value): \n \nSchool Operations \n \n16.868 mills \n \nAdditionally, Title Ad Valorem Tax revenues, at the fund reporting level, which is included in property taxes shown above, amounted to $441,872.00 during fiscal year ended June 30, 2014. \n \nSALES TAXES \n \nEducation Special Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $3,225,500.71 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years. The most recent authorization expires on December 31, 2017. \n \n- 12 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2014 \n \nEXHIBIT \"H\" \n \nINVENTORIES \n \nFood 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. \n \nCAPITAL ASSETS \n \nCapital 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 fiscal year 2014, no events or changes in circumstances affecting a capital asset that may indicate impairment were known to the School District. \n \nCapitalization thresholds and estimated useful lives of capital assets reported in the District-wide statements are as follows: \n \nCapitalization \n \nEstimated \n \nPolicy \n \nUseful Life \n \nLand Land Improvements Buildings and Improvements Equipment Intangible Assets \n \nAny Amount $ 10,000.00 $ 20,000.00 $ 5,000.00 $ 20,000.00 \n \nN/A 20 to 80 years 25 to 80 years \n5 to 50 years estimated life \n \nDepreciation 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. \n \nAmortization 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, generally 10 to 20 years. \n \nDEFERRED OUTFLOWS/INFLOWS OF RESOURCES \n \nIn addition to assets, the statement of net position and/or the balance sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of resources that applies to a future period(s) and therefore will not be recognized as an outflow of resources (expense/expenditure) until then. The School District did not have any items that qualified for reporting in this category for the year ended June 30, 2014. \n \n- 13 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2014 \n \nEXHIBIT \"H\" \n \nIn addition to liabilities, the statement of net position and/or the balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of resources that applies to a future period(s) and therefore will not be recognized as an inflow of resources (revenue) until that time. The School District has only one type of item that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported in both the governmental activities and governmental funds balance sheets. The governmental activities reports unavailable revenues from future property tax levies that are deferred and will be recognized as an inflow of resources (revenue) in the period the revenue is earned. The governmental funds report unavailable revenues from property taxes and grants that are deferred and will be recognized as an inflow of resources (revenue) in the period in which the amounts become available. \nGENERAL OBLIGATION BONDS \nThe School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. In the District-wide financial statements, bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Bond issuance costs are recognized as an outflow of resources in the fiscal year in which the bonds are issued. \nIn the fund financial statements, the School District recognizes bond premiums and discounts, as well as bond issuance costs during the fiscal year bonds are issued. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the Statement of Net Position. \nNET POSITION \nThe School District's net position in the District-wide Statements is classified as follows: \nNet investment in capital assets - This represents the School District's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of net investment in capital assets. \nRestricted net position - This represents resources for which the School District is legally or contractually obligated to spend resources for bus replacement, continuation of Federal programs, debt service and capital projects in accordance with restrictions imposed by external third parties. \nUnrestricted net position - Unrestricted net position represents 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. \n \n- 14 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2014 \n \nEXHIBIT \"H\" \n \nFUND BALANCES \nThe School District's fund balances are classified as follows: \nNonspendable - Amounts that cannot be spent either because they are in a nonspendable form or because they are legally or contractually required to be maintained intact. \nRestricted - Constraints are placed on the use of resources are either (1) externally imposed conditions by creditors, grantors, contributors, or laws and regulations of other governments or (2) imposed by law through constitutional provisions or enabling legislation. \nCommitted - Amounts that can be used only for specific purposes pursuant to constraints imposed by formal action of the Board of Education. The Board of Education is the School District's highest level of decision-making authority, and the formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution approved by the Board. Committed fund balance also should incorporate contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements. \nAssigned - Amounts that are constrained by the School District's intent to be used for specific purposes, but are neither restricted nor committed. The intent should be expressed by (1) the Board of Education or (2) the budget or finance committee, or the Superintendent, or designee, to assign amounts to be used for specific purposes. \nUnassigned - The residual classification for the General Fund. This classification represents fund balances that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the General Fund. \nFund Balances of the Governmental Funds at June 30, 2014, are as follows: \n \nNonspendable Inventories \nRestricted Continuation of Federal Programs Capital Projects Debt Service \nCommitted School Activity Accounts \nUnassigned \n \n$ \n$ 552,739.01 3,214,008.81 1,599,227.99 \n \n47,240.30 \n5,365,975.81 447,148.08 \n2,761,635.02 \n \nFund Balance, June 30, 2014 \n \n$ \n \n8,621,999.21 \n \nIt is the goal of the School District to achieve and maintain a committed, assigned, and unassigned fund balance in the general fund at fiscal year end of not less than 5% of revenues , not to exceed 15% of the total budget of the subsequent fiscal year, in compliance with Official Code of Georgia Annotated Section 20-2-167(a)5. If the unassigned fund balance at fiscal year end falls below the goal, the School District shall develop a restoration plan to achieve and maintain the minimum fund balance. \n \nWhen multiple categories of fund balance are available for expenditure, the School District will start with the most restricted category and spend those funds first before moving down to the next category with available funds. \n \n- 15 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2014 \n \nEXHIBIT \"H\" \n \nUSE OF ESTIMATES \nThe 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. \nNote 3: BUDGETARY DATA \nThe budget is a complete financial plan for the School District's fiscal year, and is based upon careful estimates of expenditures together with probable funding sources. The budget is legally adopted each year for the general, debt service, and capital projects funds. There is no statutory prohibition regarding over expenditure of the budget at any level. The budget for all governmental funds, except the various school activity (principal) accounts and Family Connection Program, was prepared and adopted by fund and function. The legal level of budgetary control was established by the Board at the aggregate function level. The budget for the General Fund was prepared in accordance with accounting principles generally accepted in the United States of America. \nThe budgetary process begins with the School District's administration presenting an initial budget for the Board's review. The administration makes revisions as necessary based on the Board's guidelines and a tentative budget is approved. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality, as well as the School District's website. At the next regularly scheduled meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final budget. The approved budget is then submitted, in accordance with provisions of Official Code of Georgia Annotated section 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end. \nOnly the Board is authorized to approve adjustments to the approved budget for revenue or expenditures changes in any budget function for any fund. \nSee Schedule 1 - General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual for a detail of any over/under expenditures during fiscal year 2014. \nNote 4: DEPOSITS AND INVESTMENTS \nCOLLATERALIZATION OF DEPOSITS \nOfficial 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 110 percent of the daily pool balance. \n \n- 16 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2014 \n \nEXHIBIT \"H\" \n \nAcceptable security for deposits consists of any one of or any combination of the following: \n \n(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, \n \n(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, \n \n(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia, \n \n(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, \n \n(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, \n \n(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and \n \n(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. \n \nCATEGORIZATION OF DEPOSITS \n \nCustodial 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, 2014, School District had cash and cash equivalents with a carrying amount of $8,276,907.17 and a bank balance of $8,462,626.13. The bank balances insured by Federal depository insurance were $780,346.83 and the bank balances collateralized with securities held by the pledging financial institution or by the pledging financial institution's trust department or agent in the School District's name were $7,279,548.86. \n \nThe amounts exposed to custodial credit risk are classified into three categories as follows: \n \nCategory 1 Category 2 - \nCategory 3 - \n \nUncollateralized, Cash collateralized with securities held by the pledging financial institution, or Cash collateralized with securities held by the pledging financial institution's trust department or agent but not in the School District's name. \n \nThe School District's deposits by custodial credit risk category at June 30, 2014, are as follows: \n \nCustodial Credit Risk Category \n \nBank Balance \n \n1 \n \n$ \n \n0.00 \n \n2 \n \n0.00 \n \n3 \n \n402,730.44 \n \nTotal \n \n$ 402,730.44 \n \n- 17 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2014 \n \nEXHIBIT \"H\" \n \nCATEGORIZATION OF INVESTMENTS \nAt June 30, 2014, the carrying value of the School District's total investments was $1,843,644.86, which is materially the same as fair value. This investment consisted entirely of funds invested in the Georgia Fund 1, (local government investment pool), administered by the State of Georgia, Office of the State Treasurer which is not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office of the State Treasurer for the Georgia Fund 1 (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. Additional information on the Georgia Fund 1 is disclosed in the State of Georgia Comprehensive Annual Financial Report. This audit can be obtained from the Georgia Department of Audits and Accounts at www.audits.ga.gov/SGD/CAFR.html. \nThe Primary Liquidity Portfolio consists of Georgia Fund 1 which is not registered with the SEC as an investment company and does not operate in a manner consistent with the SEC's Rule 2a-7 of the Investment Company Act of 1940. The investment is valued at the pool's share price, $1.00 per share. The pool is an AAAf rated investment pool by Standard and Poor's. The weighted average maturity for Georgia Fund 1 on June 30, 2014, was 62 days. \nNote 5: NON-MONETARY TRANSACTIONS \nThe School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 2 - Inventories \n \n- 18 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2014 \n \nEXHIBIT \"H\" \n \nNote 6: CAPITAL ASSETS The following is a summary of changes in the Capital Assets during the fiscal year: \n \nGovernmental Activities Capital Assets, Not Being Depreciated: \nLand Construction Work In Progress \n \nBalances July 1, 2013 \n \nIncreases \n \nDecreases \n \nBalances June 30, 2014 \n \n$ 1,370,441.39 \n \n$ \n \n7,990,602.27 $ 7,053,214.06 \n \n0.00 $ 1,370,441.39 15,043,816.33 \n \nTotal Capital Assets, Not Being Depreciated \n \n9,361,043.66 \n \n7,053,214.06 \n \n0.00 \n \n16,414,257.72 \n \nCapital Assets, Being Depreciated: Buildings and Improvements Equipment Land Improvements Intangible Assets \n \n50,113,066.70 5,370,266.98 7,675,786.19 105,379.62 \n \n156,213.24 15,425.00 22,870.00 \n \n1,040,830.00 55,863.36 \n \n49,072,236.70 5,470,616.86 7,691,211.19 128,249.62 \n \nLess: Accumulated Depreciation: Buildings and Improvements Equipment Land Improvements Intangible Assets \n \n8,833,999.19 3,550,560.95 \n882,830.56 59,743.87 \n \n647,142.60 260,290.18 109,585.29 \n10,807.38 \n \n652,026.75 53,042.83 \n \n8,829,115.04 3,757,808.30 \n992,415.85 70,551.25 \n \nTotal Capital Assets, Being Depreciated, Net \n \n49,937,364.92 \n \n-833,317.21 \n \n391,623.78 \n \n48,712,423.93 \n \nGovernmental Activity Capital Assets - Net $ 59,298,408.58 $ 6,219,896.85 $ \nCurrent year depreciation expense by function is as follows: \n \n391,623.78 $ 65,126,681.65 \n \nInstruction Support Services \nEducational Media Services School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Food Services \n \n$ \n \n$ \n \n17,317.49 \n \n53,497.90 \n \n10,807.38 \n \n8,565.40 \n \n188,283.18 \n \n701,477.22 \n278,471.35 47,876.88 \n \n$ \n \n1,027,825.45 \n \nNote 7: RISK MANAGEMENT \n \nThe 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. \n \n- 19 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2014 \n \nEXHIBIT \"H\" \n \nThe School District participates in the Georgia School Boards Association Risk and Insurance Management System, a public entity risk pool organized on July 1, 1994, to develop and administer a plan to reduce risk of loss on account of general liability, motor vehicle liability, or property damage, including safety engineering and other loss prevention and control techniques, and to administer one or more groups of self-insurance funds, including the processing and defense of claims brought against members of the system. The School District pays an annual premium to the system for its general insurance coverage. Additional coverage is provided through agreements by the system with other companies according to their specialty for property, boiler and machinery (including coverage for flood and earthquake), general liability (including coverage for sexual harassment, molestation and abuse), errors and omissions, crime and automobile risks. Payment of excess insurance for the system varies by line of coverage. \n \nThe School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the General Fund with expenses/expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. \n \nChanges in the unemployment compensation claims liability during the last two fiscal years are as follows: \n \nClaims and \n \nBeginning of Year \n \nChanges in \n \nClaims \n \nEnd of Year \n \nLiability \n \nEstimates \n \nPaid \n \nLiability \n \n2013 $ 2014 $ \n \n0.00 $ 0.00 $ \n \n44,014.82 $ 14,992.00 $ \n \n44,014.82 $ 14,992.00 $ \n \n0.00 0.00 \n \nThe School District participates in the Georgia School Boards Association Workers' Compensation Fund, a public entity risk pool organized on July 1, 1992, 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 Fund for its Workers' Compensation insurance coverage. Excess insurance coverage is provided through an agreement by the Fund with the Safety National Casualty Corporation to provide coverage for potential losses sustained by the Fund in excess of $550 thousand loss per occurrence, up to the statutory limit. Employers' Liability insurance coverage is also provided by Safety National Casualty Corporation to provide coverage for potential losses sustained by the Fund in excess of $550 thousand loss per occurrence, up to $2 million. In addition to the $550,000.00 per occurrence retention, the Fund also retains an additional $150,000.00 per year corridor retention. \n \nThe School District has purchased a surety bond to provide additional insurance coverage as follows: \n \nPosition Covered Superintendent \n \nAmount $100,000.00 \n \n- 20 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2014 \n \nEXHIBIT \"H\" \n \nNote 8: LONG-TERM LIABILITIES GENERAL OBLIGATION DEBT OUTSTANDING General Obligation Bonds currently outstanding are as follows: \n \nPurpose \n \nInterest Rates \n \nAmount \n \nGeneral Government - Series 2012 \n \n3.00% - 5.00% \n \n$ 9,920,000.00 \n \nVoters have authorized $2,880,000.00 in general obligation debt for capital outlay which was not issued as of June 30, 2014. \n \nThe changes in Long-Term Liabilities during the fiscal year ended June 30, 2014, were as follows: \n \nBalance July 1, 2013 \n \nAdditions \n \nGovernmental Activities \n \nBalance \n \nDeductions \n \nJune 30, 2014 \n \nDue Within One Year \n \nG. O. Bonds \n \n$ 12,120,000.00 $ \n \nUnamortized Bond Premiums \n \n1,128,769.42 \n \n0.00 $ 2,200,000.00 $ 9,920,000.00 $ 2,400,000.00 \n \n225,753.88 \n \n903,015.54 \n \n225,753.88 \n \n$ 13,248,769.42 $ \n \n0.00 $ 2,425,753.88 $ 10,823,015.54 $ 2,625,753.88 \n \nAt June 30, 2014, payments due by fiscal year which includes principal and interest for these items are as follows: \n \nGeneral Obligation Debt \n \nUnamortized \n \nPrincipal \n \nInterest \n \nBond Premium \n \nFiscal Year Ended June 30: \n \n2015 2016 2017 2018 \n \n$ \n \n2,400,000.00 $ \n \n2,600,000.00 \n \n2,550,000.00 \n \n2,370,000.00 \n \n441,775.00 $ 345,775.00 215,775.00 \n88,275.00 \n \n225,753.88 225,753.88 225,753.88 225,753.90 \n \nTotal Principal and Interest \n \n$ \n \n9,920,000.00 $ \n \n1,091,600.00 $ \n \n903,015.54 \n \nNote 9: ON-BEHALF PAYMENTS \n \nThe School District has recognized revenues and costs in the amount of $1,753,199.01 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies. \n \nGeorgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Certificated Personnel In the amount of $1,631,820.00 \n \nPaid to the Teachers' Retirement System of Georgia For Teachers' Retirement System (TRS) Employer's Cost In the amount of $32,112.01 \n \n- 21 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2014 \n \nEXHIBIT \"H\" \n \nOffice of State Treasurer Paid to the Public School Employees' Retirement System For Public School Employees' Retirement (PSERS) Employer's Cost In the amount of $89,267.00 \n \nFunds paid to the Georgia Department of Community Health by the Georgia Department of Education on behalf of the School District are reported as part of the Quality Basic Education revenue allotments on Schedule 3 - Schedule of State Revenue. \nNote 10: SIGNIFICANT COMMITMENTS \n \nThe following is an analysis of significant outstanding construction or renovation contracts executed by the School District as of June 30, 2014, together with funding available: \n \nProject \n \nUnearned Executed Contracts \n \nFunding Available From State \n \nNew High School and Administration Building \n \n$ \n \n342,227.98 $ \n \n692,135.80 \n \nThe amounts described in this note are not reflected in the basic financial statements. \n \nNote 11: SIGNIFICANT CONTINGENT LIABILITIES \nAmounts 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. \n \nThe School District is a defendant in various legal proceedings pertaining to 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. \n \nNote 12: POST-EMPLOYMENT BENEFITS Georgia School Personnel Post-employment Health Benefit Fund \n \nPlan 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 Fund provides health insurance benefits to eligible former employees and their qualified beneficiaries through the State Employees Health Benefit Plan administered by the Department of Community Health. The Official Code of Georgia Annotated (O.C.G.A.) 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). The Department of Community Health, which includes the School OPEB Fund, issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts. \n \nFunding 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 \n \n- 22 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2014 \n \nEXHIBIT \"H\" \n \nelection, dependent coverage, and Medicare eligibility and election. For members with fewer than five years of service as of January 1, 2012, contributions also vary based on years of service. On average, members with five years or more of service as of January 1, 2012 pay approximately 25 percent of the cost of the health insurance coverage. In accordance with the Board resolution dated December 8, 2011, for members with fewer than five years of service as of January 1, 2012, the State provides a premium subsidy in retirement that ranges from 0% for fewer than 10 years of service to 75% (but no greater than the subsidy percentage offered to active employees) for 30 or more years of service. The subsidy for eligible dependents ranges from 0% to 55% (but no greater than the subsidy percentage offered to dependents of active employees minus 20%). No subsidy is available to Medicare eligible members not enrolled in a Medicare Advantage Option. The Board of Community Health sets all member premiums by resolution and in accordance with the law and applicable revenue and expense projections. Any subsidy policy adopted by the Board may be changed at any time by Board resolution and does not constitute a contract or promise of any amount of subsidy. \nParticipating 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 \"payas-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. \nThe 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, 2014: \n \nFor certificated teachers, librarians and regional educational service agencies and certain other eligible participants: \n \nJuly 1, 2013 - June 30, 2014 $945.00 per member per month For non-certificated school personnel: July 1, 2013 - June 30, 2014 $596.20 per member per month \n \nNo additional contribution was required by the Board for fiscal year 2014 nor contributed to the School OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the School plan for other post-employment benefits and are subject to appropriation. \n \nThe School District's combined active and retiree contributions to the health insurance plans, which equaled the required contribution, for the current fiscal year and the preceding two fiscal years were as follows: \n \nPercentage \n \nRequired \n \nFiscal Year \n \nContributed \n \nContribution \n \n2014 2013 2012 \n \n100% 100% 100% \n \n$ \n \n3,805,385.33 \n \n$ \n \n3,382,388.32 \n \n$ \n \n3,506,248.56 \n \n- 23 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2014 \n \nEXHIBIT \"H\" \n \nNote 13: RETIREMENT PLANS \nTEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) \nPlan 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. \nOn 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. \nTRS 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 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service. \nNormal 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 40 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 30 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. \nFunding Policy. TRS is funded by member and employer contributions as adopted and amended by the Board of Trustees. Members become fully vested after 10 years of service. If a member terminates with less than 10 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, 2014, were 6.00% of annual salary. Employer contributions required for fiscal year 2014 were 12.28% of annual salary as required by the June 30, 2011, actuarial valuation. \nEmployer contributions for the current fiscal year and the preceding two fiscal years are as follows: \n \nFiscal Year \n \nPercentage Contributed \n \nRequired Contribution \n \n2014 2013 2012 \n \n100% 100% 100% \n \n$ \n \n2,098,050.15 \n \n$ \n \n1,955,178.40 \n \n$ \n \n1,835,658.64 \n \n- 24 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2014 \n \nEXHIBIT \"H\" \n \nPUBLIC SCHOOL EMPLOYEES' RETIREMENT SYSTEM (PSERS) \nBus drivers, lunchroom personnel, and maintenance and custodial personnel are members of the Public School Employees' Retirement System of Georgia. The System is funded by contributions by the employees and by the State of Georgia. The School District makes no contribution to this plan. \nDEFINED CONTRIBUTION PLAN \nThe Franklin County Board of Education maintains an employer paid 403(b) annuity plan for the group of employees covered under the Public School Retirement System (PSERS). Recognizing that PSERS was a limited defined contribution and defined benefit plan which did not provide for an adequate retirement for this group of employees, it was the Board's desire to supplement the retirement of this group. \nThe Board selected Lincoln as the provider of this plan. For each employee covered under PSERS, the Board contributes to the plan an amount equal to the amount contributed by the employee not to exceed $25.00 per employee per month. \nThe employee becomes vested in the plan with 5 years of experience. Employees who had already achieved 5 years of experience at the time the plan was implemented were vested upon enrollment. \nFunds accumulated in the employer paid accounts are only available to the employee upon termination of employment and 5 years of service to Franklin County Board of Education. If an employee terminates employment prior to achieving 5 years of service, funds paid on behalf of the non-vested employee are credited back to the Board. Funds are vested at 20% per year of service. \nThe provider for the plan has not changed since its inception \nEmployer contributions for the current fiscal year and the preceding two fiscal years are as follows: \n \nFiscal Year \n \nPercentage Contributed \n \nRequired Contribution \n \n2014 2013 2012 \n \n100% \n \n$ \n \n15,540.00 \n \n100% \n \n$ \n \n14,520.00 \n \n100% \n \n$ \n \n18,745.00 \n \n- 25 - \n \n (This page left intentionally blank) \n \n FRANKLIN COUNTY BOARD OF EDUCATION GENERAL FUND \nSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL \nYEAR ENDED JUNE 30, 2014 \n \nSCHEDULE \"1\" \n \nREVENUES \nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous \nTotal Revenues \nEXPENDITURES \nCurrent 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 Food Services Operation \nTotal Expenditures \nExcess of Revenues over (under) Expenditures \nOTHER FINANCING SOURCES \nOther Sources \nNet Change in Fund Balances \nFund Balances - Beginning \nAdjustments \n \nNONAPPROPRIATED BUDGETS \n \nORIGINAL (1) \n \nFINAL (1) \n \nACTUAL AMOUNTS \n \nVARIANCE OVER/UNDER \n \n$ 9,145,800.00 $ 9,145,800.00 $ 9,533,665.78 $ \n \n136,380.55 \n \n17,364,700.93 \n \n17,305,723.10 \n \n17,375,529.61 \n \n150,000.00 \n \n2,430,317.00 \n \n3,354,287.78 \n \n66,000.00 \n \n66,000.00 \n \n538,013.86 \n \n27,000.00 \n \n27,000.00 \n \n29,330.63 \n \n40,000.00 \n \n40,000.00 \n \n754,344.17 \n \n387,865.78 136,380.55 \n69,806.51 923,970.78 472,013.86 \n2,330.63 714,344.17 \n \n26,793,500.93 \n \n29,014,840.10 \n \n31,721,552.38 \n \n2,706,712.28 \n \n20,599,420.57 \n990,673.96 1,418,649.81 \n499,678.04 397,343.20 1,997,357.03 240,203.80 2,151,938.20 1,957,150.07 \n197,306.00 \n906,217.81 \n31,355,938.49 \n-4,562,437.56 \n \n20,526,504.91 \n1,013,612.32 1,612,215.30 \n499,678.04 376,545.95 1,990,537.25 240,203.80 2,166,910.44 1,898,921.07 \n212,306.00 \n906,217.81 \n31,443,652.89 \n-2,428,812.79 \n \n20,011,479.79 \n1,043,352.28 1,503,286.66 \n513,827.74 404,377.33 1,844,922.63 241,643.15 2,236,612.20 2,003,499.80 \n2,139.87 215,425.57 284,687.15 1,586,836.41 \n31,892,090.58 \n-170,538.20 \n \n515,025.12 \n-29,739.96 108,928.64 -14,149.70 -27,831.38 145,614.62 \n-1,439.35 -69,701.76 -104,578.73 \n-2,139.87 -3,119.57 -284,687.15 -680,618.60 \n-448,437.69 \n2,258,274.59 \n \n87,048.00 -4,475,389.56 3,378,575.99 \n100.00 \n \n87,048.00 -2,341,764.79 3,790,540.55 \n218,042.11 \n \n-170,538.20 3,979,300.61 \n \n-87,048.00 2,171,226.59 \n188,760.06 -218,042.11 \n \nFund Balances - Ending \n \n$ -1,096,713.57 $ 1,666,817.87 $ 3,808,762.41 $ 2,141,944.54 \n \nNotes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual \n \n(1) Original and Final Budget amounts do not include the budgeted revenues or expenditures of various programs reported as a part of the General Fund . The actual revenues and expenditures of these programs were as follows: \n \nPrincipals' Accounts Family Connection Program \n \nRevenues \n \nExpenditures \n \n$ \n \n577,617.54 $ \n \n569,428.72 \n \n47,150.93 \n \n44,848.12 \n \n$ \n \n624,768.47 $ \n \n614,276.84 \n \nThe accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements. \n \nSee notes to the basic financial statements. \n \n- 27 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \nYEAR ENDED JUNE 30, 2014 \n \nSCHEDULE \"2\" \n \nFUNDING AGENCY PROGRAM/GRANT \nAgriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program \nTotal U. S. Department of Agriculture \nEducation, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Special Education Grants to States Preschool Grants \nTotal Special Education Cluster \nOther Programs Pass-Through From Georgia Department of Education Career and Technical Education - Basic Grants to States English Language Acquisition Grants Improving Teacher Quality State Grants Migrant Education - State Grant Program Rural Education Title I Grants to Local Educational Agencies \nTotal Other Programs \nTotal U. S. Department of Education \n \nCFDA NUMBER \n \nPASSTHROUGH \nENTITY ID \nNUMBER \n \nEXPENDITURES IN PERIOD \n \n* 10.553 * 10.555 \n \nN/A \n \n(2) \n \nN/A \n \n$ 1,516,367.36 (1) \n \n1,516,367.36 \n \n84.027 \n \nN/A \n \n84.173 \n \nN/A \n \n84.048 \n \nN/A \n \n84.365 \n \nN/A \n \n84.367 \n \nN/A \n \n84.011 \n \nN/A \n \n84.358 \n \nN/A \n \n* 84.010 \n \nN/A \n \n888,918.87 35,592.78 \n924,511.65 \n44,988.39 9,767.71 \n153,146.63 25,206.06 69,560.08 \n980,047.80 \n1,282,716.67 \n2,207,228.32 \n \nTotal Expenditures of Federal Awards \n \n$ 3,723,595.68 \n \nN/A = Not Available \n \nNotes to the Schedule of Expenditures of Federal Awards \n \n(1) Includes the Federally assigned value of donated commodities for the Food Donation Program in the amount of $106,188.03. \n(2) Expenditures for the funds earned on the School Breakfast Program ($231,374.50) were not maintained separately and are included in the 2014 National School Lunch Program. \n \nMajor Programs are identified by an asterisk (*) in front of the CFDA number. \n \nThe School District did not provide Federal Assistance to any Subrecipient. \n \nThe accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Franklin County Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements. \n \nSee notes to the basic financial statements. \n \n- 28 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2014 \n \nSCHEDULE \"3\" \n \nAGENCY/FUNDING \nGRANTS Education, Georgia Department of Quality Basic Education (1) Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades - Early Intervention (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program 20 Days Additional Instruction Staff and Professional Development Principal Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Mid-term Adjustment Hold-Harmless Amended Formula Adjustment Categorical Grants Pupil Transportation Regular Nursing Services Vocational Supervisors Education Equalization Funding Grant Other State Programs Food Services Math and Science Supplements Move On When Ready Grant Preschool Handicapped Program Pupil Transportation - State Bonds Teachers' Retirement Vocational Education \nGeorgia State Financing and Investment Commission Reimbursement on Construction Projects \nHuman Resources, Georgia Department of Family Connection \nOffice of the State Treasurer Public School Employees' Retirement \n \nGOVERNMENTAL FUND TYPES \n \nCAPITAL \n \nGENERAL \n \nPROJECTS \n \nFUND \n \nFUND \n \nTOTAL \n \n$ 1,177,008.00 151,186.00 \n2,580,380.00 509,102.00 \n1,210,443.00 458,989.00 \n2,502,302.00 1,837,396.00 \n742,950.00 2,798,445.00 \n445,360.00 271,514.00 165,210.00 135,469.00 405,082.00 125,728.00 \n75,720.00 1,701.00 \n509,909.00 869,339.00 920,521.00 \n42,401.00 -2,501,470.00 \n599,587.00 70,691.00 13,367.00 \n687,014.00 \n48,181.00 38,353.17 \n200.00 84,481.00 76,219.50 32,112.01 154,221.00 \n \n$ 1,177,008.00 151,186.00 \n2,580,380.00 509,102.00 \n1,210,443.00 458,989.00 \n2,502,302.00 1,837,396.00 \n742,950.00 2,798,445.00 \n445,360.00 271,514.00 165,210.00 135,469.00 405,082.00 125,728.00 \n75,720.00 1,701.00 \n509,909.00 869,339.00 920,521.00 \n42,401.00 -2,501,470.00 \n599,587.00 70,691.00 13,367.00 \n687,014.00 \n48,181.00 38,353.17 \n200.00 84,481.00 76,219.50 32,112.01 154,221.00 \n \n$ 6,229,222.20 47,150.93 89,267.00 \n \n6,229,222.20 47,150.93 89,267.00 \n \n$ 17,375,529.61 $ 6,229,222.20 $ 23,604,751.81 \n(1) Payments to the Georgia Department of Community Health by the Georgia Department of Education on behalf of the School District in the amount of $1,631,820.00 are included as part of the Quality Basic Education revenue allotments above. \nSee notes to the basic financial statements. \n- 29 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \nYEAR ENDED JUNE 30, 2014 \n \nSCHEDULE \"4\" \n \nPROJECT \n \nORIGINAL ESTIMATED \nCOST (1) \n \nCURRENT ESTIMATED COSTS (2) \n \nAMOUNT EXPENDED IN CURRENT YEAR (3) (4) (5) \n \nAMOUNT EXPENDED IN PRIOR YEAR (3) (4) (5) \n \nTOTAL COMPLETION \nCOST \n \nEXCESS PROCEEDS NOT \nEXPENDED \n \nESTIMATED COMPLETION \nDATE \n \ni) Acquiring, constructing, and equipping replacement \n \nschool buildings at Franklin County High School; \n \n$ 16,300,000.00 $ 16,300,000.00 $ 7,053,214.06 $ 7,140,737.77 \n \nii) adding to, renovating, repairing, improving, acquiring and equipping school buildings and school system facilities; \n \n500,000.00 \n \n500,000.00 \n \n133,257.04 \n \n43,041.86 \n \niii) acquiring miscellaneous new equipment, fixtures and furnishings for the school system, including computer technology equipment, computer software, school buses and other vehicles, transportation and maintenance equipment, and security and safety equipment; \n \n1,300,000.00 \n \n1,300,000.00 \n \n120,337.61 \n \n784,968.96 \n \niv) acquiring land or improving land for new or existing schools; \nv) acquiring textbooks, e-books, and e-book readers for the school system; \nvi) paying a portion of the payments, including principal and interest , due on the School District's Series 2006 and 2007 Bonds with a maximum payment amount of $1,700,000.00, with the maximum cost of the projects described in items (i)(vi) payable from said tax being $20,000,000.00. \n \n100,000.00 400,000.00 \n1,700,000.00 \n \n100,000.00 400,000.00 \n1,400,000.00 \n \n227,097.58 \n \nJune 30, 2018 June 30, 2018 \nJune 30, 2018 June 30, 2018 June 30, 2018 \nJune 30, 2018 \n \n$ 20,300,000.00 $ 20,000,000.00 $ 7,306,808.71 $ 8,195,846.17 \n \n(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax. \n \n(2) The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion. \n \n(3) The voters of Franklin County approved the imposition of a 1% sales tax to fund the above projects and retire associated debt. Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the projects. \n \n(4) In addition to the expenditures shown above, the School District has incurred interest to provide advance funding for the above projects as follows: \n \nPrior Years \n \n$ \n \n324,411.81 \n \nCurrent Year \n \n507,775.00 \n \nTotal \n \n$ \n \n832,186.81 \n \n(5) In addition to the expenditures shown above, the School District has incurred bond issuance cost and related paying agent fees for the above projects as follows: \n \nPrior Years \n \n$ \n \n159,291.14 \n \nCurrent Year \n \n3,075.00 \n \nTotal \n \n$ \n \n162,366.14 \n \nSee notes to the basic financial statements. \n \n- 30 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) \nALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2014 \n \nSCHEDULE \"5\" \n \nDESCRIPTION \nDirect Instructional Programs Kindergarten Program Kindergarten Program-Early Intervention Program Primary Grades (1-3) Program Primary Grades-Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades-Early Intervention (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Category II Category III Category IV Category V Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) \nTOTAL DIRECT INSTRUCTIONAL PROGRAMS \nMedia Center Program Staff and Professional Development \n \nALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) (2) \n \nELIGIBLE QBE PROGRAM COSTS \n \nSALARIES \n \nOPERATIONS \n \nTOTAL \n \n$ \n \n1,380,147.00 $ 1,525,928.90 $ \n \n8,847.79 $ 1,534,776.69 \n \n195,093.00 \n \n3,173.71 \n \n779.17 \n \n3,952.88 \n \n3,015,276.00 \n \n3,187,612.70 \n \n43,286.15 \n \n3,230,898.85 \n \n652,350.00 \n \n20,446.03 \n \n4,240.04 \n \n24,686.07 \n \n1,453,550.00 \n \n2,158,357.24 \n \n17,244.12 \n \n2,175,601.36 \n \n509,943.00 2,938,489.00 2,184,912.00 \n880,628.00 3,296,807.00 \n546,019.00 328,025.00 198,877.00 158,480.00 \n \n73,666.75 3,084,064.13 2,813,678.57 \n813,217.09 \n115,385.01 435,787.29 1,952,778.54 162,703.28 \n18,796.23 378,690.07 \n318,076.96 186,531.78 \n \n1,362.89 34,407.72 61,305.04 58,151.15 \n547.45 515.34 182,094.62 5,534.37 13,970.22 2,878.88 817.84 6,817.74 \n \n75,029.64 3,118,471.85 2,874,983.61 \n871,368.24 \n115,932.46 436,302.63 2,134,873.16 168,237.65 \n32,766.45 381,568.95 \n817.84 324,894.70 186,531.78 \n \n17,738,596.00 \n \n17,248,894.28 \n \n442,800.53 \n \n17,691,694.81 \n \n479,222.00 89,202.00 \n \n424,692.63 43,315.89 \n \n35,081.45 35,524.56 \n \n459,774.08 78,840.45 \n \nTOTAL QBE FORMULA FUNDS \n \n$ \n \n18,307,020.00 $ 17,716,902.80 $ 513,406.54 $ 18,230,309.34 \n \n(1) Comprised of State Funds plus Local Five Mill Share. (2) Allotments do not include the impact of the State amended formula adjustment. \n \nSee notes to the basic financial statements. \n \n- 31 - \n \n  SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS \n \n  Greg S. Griffin \nSTATE AUDITOR \n(404) 656-2174 \n \nDEPARTMENT OF AUDITS AND ACCOUNTS \n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \nDecember 15, 2015 \n \nHonorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education \nand Superintendent and Members of the Franklin County Board of Education \nINDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS \nLadies and Gentlemen: \nWe have audited, 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, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Franklin County Board of Education as of and for the year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise Franklin County Board of Education's basic financial statements, and have issued our report thereon dated December 15, 2015. \nInternal Control Over Financial Reporting \nIn planning and performing our audit of the financial statements, we considered Franklin County Board of Education's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Franklin County Board of Education's internal control. Accordingly, we do not express an opinion on the effectiveness of the Franklin County Board of Education's internal control. \nA 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. A significant deficiency is a deficiency, or a 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. \n \n2014YB-30 \n \n  Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. We did identify a certain deficiency in internal control, described in the accompanying Schedule of Findings and Questioned Costs as item FS 2014-001 that we consider to be a significant deficiency. \nCompliance and Other Matters \nAs part of obtaining reasonable assurance about whether Franklin County Board of Education's financial statements are free from 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. \nWe noted certain matters that we have reported to management of Franklin County Board of Education in a separate letter dated December 15, 2015. \nFranklin County Board of Education's Response to Findings \nFranklin County Board of Education's response to the findings identified in our audit is described in the accompanying Schedule of Findings and Questioned Costs. Franklin County Board of Education's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. \nPurpose of this Report \nThe purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. \nRespectfully submitted, \n \nGSG:as 2014YB-30 \n \nGreg S. Griffin State Auditor \n \n  Greg S. Griffin \nSTATE AUDITOR \n(404) 656-2174 \n \nDEPARTMENT OF AUDITS AND ACCOUNTS \n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \nDecember 15, 2015 \n \nHonorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education \nand Superintendent and Members of the Franklin County Board of Education \nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 \nLadies and Gentlemen: \nReport on Compliance for Each Major Federal Program \nWe have audited Franklin County 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, 2014. Franklin County 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. \nManagement's Responsibility \nManagement is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. \nAuditor's Responsibility \nOur responsibility is to express an opinion on compliance for each of Franklin County Board of Education's major federal programs based on our audit of the types of compliance requirements referred to above. 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 Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the Franklin County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. \nWe believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of Franklin County Board of Education's compliance. \n2014SA-40 \n \n  Opinion on Each Major Federal Program \nIn our opinion, the Franklin County Board of Education complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2014. \nOther Matters \nThe results of our auditing procedures disclosed an instance of noncompliance, which is required to be reported in accordance with OMB Circular A-133 and which is described in the accompanying Schedule of Findings and Questioned Costs as item FA 2014-001. Our opinion on each major federal program is not modified with respect to this matters. \nFranklin County Board of Education's response to the noncompliance findings identified in our audit is described in the accompanying schedule of findings and questioned costs. Franklin County Board of Education's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. \nReport on Internal Control over Compliance \nManagement of Franklin County Board of Education is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered Franklin County Board of Education's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program 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 Franklin County Board of Education's internal control over compliance. \nA 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 compliance 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. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. \nOur 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 material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, we identified a certain deficiency in internal control over compliance, as described in the accompanying Schedule of Findings and Questioned Costs as item FA 2014-001 that we consider to be a significant deficiency. \n2014SA-40 \n \n  Franklin County Board of Education's response to the internal control over compliance findings identified in our audit is described in the accompanying Schedule of 'Findings and Questioned Costs. Franklin County Board of Education's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. \nThe purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. \nRespectfully submitted, \n \nGSG:as 2014SA-40 \n \nGreg S. Griffin State Auditor \n \n  SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS \n \n  FRANKLIN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2014 \n \nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \n \nFINDING CONTROL NUMBER AND STATUS \n \nFS-6591-13-01 FS-6591-13-02 \n \nPartially Resolved - See Corrective Action/Responses Previously Reported Corrective Action Implemented \n \nCORRECTIVE ACTION/RESPONSES \n \nCash and Cash Equivalents Expenditures/Liabilities/Disbursements Revenues/Receivables/Receipts General Ledger Capital Assets Inadequate Internal Controls Finding Control Number: FS-6591-13-01 \n \nThe main operating bank reconciliation was not completed in a timely manner in fiscal year 2013 for several months due to delays from personnel absentees and credit card reconciliations. We made several changes to ensure the bank reconciliations are consistently completed in a timely manner. During fiscal year 2014 we have a different person responsible for the reconciliation who has a lower absentee record. Also, we have scheduled a substitute for this person on the day she does the reconciliation so her work is uninterrupted. In addition, we have changed the credit card policy to restrict its use so that it can be reconciled quickly each month and will not hinder the bank reconciliation process. With these corrections, the bank reconciliations are being reconciled timely. \n \nPRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \n \nNo matters were reported. \n \n  SECTION IV FINDINGS AND QUESTIONED COSTS \n \n  FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2014 \n \nI SUMMARY OF AUDITOR'S RESULTS \n \nFinancial Statements \n \nType of auditor's report issue: Governmental Activities; General Fund; Capital Projects Fund; Debt Service Fund; Aggregate Remaining Fund Information \n \nUnmodified \n \nInternal control over financial reporting: \n \n Material weakness identified? \n \nNo \n \n Significant deficiency identified? \n \nYes \n \nNoncompliance material to financial statements noted: \n \nNo \n \nFederal Awards \n \nInternal Control over major programs: \n \n Material weakness identified? \n \nNo \n \n Significant deficiency identified? \n \nYes \n \nType of auditor's report issued on compliance for major programs: All major programs \n \nUnmodified \n \nAny audit findings disclosed that are required to be reported in \n \naccordance with OMB Circular A-143, Section 510(a)? \n \nYes \n \nIdentification of major programs: \n \nCFDA Numbers \n \nName of Federal Program or Cluster \n \n10.553, 10.555 84.010 \n \nChild Nutrition Cluster Title I Grants to Local Educational Agencies \n \nDollar threshold used to distinguish between Type A and Type B programs: \n \n$300,000.00 \n \nAuditee qualified as low-risk auditee? \n \nNo \n \n- 1 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2014 \n \nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \n \nFS 2014-001 Inadequate Internal Control Procedures \n \nControl Category: \n \nCash and Cash Equivalents \n \nInvestments \n \nGeneral Ledger \n \nCapital Assets \n \nInternal Control Impact: \n \nSignificant Deficiency \n \nDescription: The accounting procedures of the School District were insufficient to provide for adequate internal controls at the Central Office. \n \nCriteria: 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. \n \nCondition: Inadequate internal control procedures were noted for the following control categories: \n \nCash and Cash Equivalents  Bank reconciliations for several accounts were not reconciled in a timely manner.  Bank reconciliations were not prepared for several bank accounts.  Controls are not in place to ensure that internally pooled cash account nets to zero.  The June Operating Account bank reconciliation did not include supporting documentation for outstanding items. \n \nInvestments  Bank reconciliations were not prepared for the Investment account. \n \nGeneral Ledger  No activity was posted to the General Ledger for the Bus Driver's Association for fiscal year 2014.  Documentation supporting Funds Held for Others recorded on the financial statements could not be provided for audit review. \n \nCapital Assets  The process of identification, valuation and posting of capitalizable assets are performed by one individual, with no review by someone independent of the Capital Asset process.  A construction project, the Technology Education Building, totaling $53,628.00 was not included in Construction Work in Progress.  An asset placed in the Capital Asset Module did not include the \"In Service\" date resulting in no depreciation being calculated for the asset for fiscal year 2014. \n \nCause: In discussing this condition with the Finance Director, he indicated that a reduction in staff prevented remaining personnel from having time to perform duties of absent employees. Additionally, due to turnover in key management positions, there was a lack of training to newer, inexperienced staff. \n \n- 2 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2014 \n \nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \n \nEffect or Potential Effect: Errors and/or irregularities may not be detected in a timely manner. \n \nRecommendation: The School District should review accounting procedures in place and design and implement monitoring controls to provide reasonable assurance that transactions are processed according to established controls and also implement procedures to ensure that key accounting functions are separated. \n \nViews of Responsible Officials and Corrective Action Plans: We concur with this finding. The accounting department has begun completing a formal bank reconciliation on all accounts regardless if the balance is immaterial or the activity is extremely low. In the past the activity in the Bus Driver's Assoc. account and the Georgia Fund account were reviewed by providing the bank statement. Also, to provide better separation of duties for capital assets, the assist superintendent will review the process of identifying, valuating and posting of capital assets. These changes in the accounting procedures will be documented in the financial handbook. All changes will be implemented by January 2016. \n \nContact Person: Tom Porter, Financial Director Phone: (706) 384-4554 Fax: (706) 384-7472 E-mail: tom.porter@franklin.k12.ga.us \n \nIII FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \n \nFA 2014-001 Inadequate Internal Control Procedures \n \nCompliance Requirement: ACTIVITIES ALLOWED/UNALLOWED \n \nALLOWABLE COSTS/COST PRINCIPLES \n \nInternal Control Impact: \n \nSignificant Deficiency \n \nCompliance Impact: \n \nNonmaterial Noncompliance \n \nFederal Awarding Agency: U.S. Department of Agriculture \n \nPass- Through Entity: \n \nGeorgia Department of Education \n \nCFDA Number and Title: \n \nChild Nutrition Cluster (CFDA 10.553 and 10.555) \n \nDescription: A review of expenditures charged to the Child Nutrition Cluster (CFDA 10.553 and 10.555) program revealed that the School District did not implement internal control procedures to ensure that expenditures were properly documented, authorized, allowable and charged according to invoices and bid documentation. \n \nCriteria: Provisions of OMB Circular A-87 Cost Principles for State, Local and Indian Tribal Governments, require that \"to be allowable under Federal awards, cost must be...authorized or not prohibited under state or local laws or regulations\" and \"be adequately documented\". \n \n- 3 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2014 \nIII FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \nCondition: A review of twenty five expenditure vouchers for the Child Nutrition Cluster revealed the following deficiencies: \n Three vouchers were overpaid due to calculation errors;  Twelve vouchers had no evidence of receipt of goods; and  There was no independent review to determine that the expenditures were accurate and \nproperly documented prior to payment. \nQuestioned Cost: N/A \nCause: In a discussion with School Food Director, it was determined that she did not monitor and verify closely the vouchers had the correct amount, and that proper documentation was provided. \nEffect or Potential Effect: Failure to ensure that expenditures are allowable, approved and properly documented resulted in noncompliance with the requirements of the Federal grant. \nRecommendation: The School District should establish and implement procedures to ensure that all expenditures are allowable under OMB Circular A-87, approved by appropriate management, and properly documented. The Georgia Department of Education should review this matter to determine if a reclaim of funds is appropriate. \nViews of Responsible Officials and Corrective Action Plans: We concur with this finding. The program director will document and implement procedures to ensure that all expenditures are allowable under OMB A-87. Also, the Program bookkeeper has been instructed to dedicate blocks of uninterrupted time to process invoices so as to minimize distractions. The program director will closely monitor vouchers to ensure that they are accurate. These changes will be implemented by January 2016. \nContact Person: Melanie Freeman, Director of Food Services Phone: (706) 384-4554 Fax: (706) 384-7472 E-mail: melanie.freeman@ franklin.k12.ga.us \n- 4 - \n \n "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-be26-bf8-b2012-h2013-belec-p-btext","title":"Franklin County Board of Education, Carnesville, Georgia, annual financial report for the fiscal year ended June 30, 2013 (including independent auditor's reports)","collection_id":"dlg_ggpd","collection_title":"Georgia Government Publications","dcterms_contributor":["Georgia. Department of Audits and Accounts, issuing body."],"dcterms_spatial":["United States, Georgia, 32.75042, -83.50018"],"dcterms_creator":["Georgia. Department of Audits and Accounts"],"dc_date":["2013-06-30"],"dcterms_description":["Began with fiscal year ended June 30, 2009.","Report year covers fiscal year.","Fiscal year ended June 30, 2014 (online surrogate) (Received via FTP 1/14/16 from Georgia Dept. of Audits and Accounts); title from PDF cover (Georgia Government Publications database, viewed February 24, 2023).","Fiscal year ended June 30, 2019 (online surrogate) (Georgia Government Publications database, viewed February 24, 2023)."],"dc_format":["application/pdf"],"dcterms_identifier":null,"dcterms_language":["eng"],"dcterms_publisher":["Atlanta, Ga. : Georgia. Department of Audits and Accounts"],"dc_relation":null,"dc_right":["http://rightsstatements.org/vocab/InC/1.0/"],"dcterms_is_part_of":null,"dcterms_subject":["Franklin County Board of Education (Ga.)--Appropriations and expenditures--Periodicals","Education--Georgia--Franklin County--Auditing--Periodicals","Education--Georgia--Franklin County--Finance--Statistics--Periodicals"],"dcterms_title":["Franklin County Board of Education, Carnesville, Georgia, annual financial report for the fiscal year ended June 30, 2013 (including independent auditor's reports)"],"dcterms_type":["Text"],"dcterms_provenance":["University of Georgia. Map and Government Information Library"],"edm_is_shown_by":["https://dlg.galileo.usg.edu/do:dlg_ggpd_y-ga-ba800-b-pr1-be26-bf8-b2012-h2013-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-be26-bf8-b2012-h2013-belec-p-btext"],"dcterms_temporal":null,"dcterms_rights_holder":["\u0026copy; Georgia Department of Audits"],"dcterms_bibliographic_citation":null,"dlg_local_right":null,"dcterms_medium":["annual reports","state government records","audits","financial records","financial statements"],"dcterms_extent":null,"dlg_subject_personal":null,"iiif_manifest_url_ss":null,"dcterms_subject_fast":null,"fulltext":"FRANKLIN COUNTY BOARD OF EDUCATION \nCARNESVILLE, GEORGIA \nANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2013 \n(Including Independent Auditor's Reports) \n \n FRANKLIN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \n \nSECTION I \n \nFINANCIAL \n \nINDEPENDENT AUDITOR'S REPORT \n \nREQUIRED SUPPLEMENTARY INFORMATION \n \nMANAGEMENT'S DISCUSSION AND ANALYSIS \n \nEXHIBITS \n \nBASIC FINANCIAL STATEMENTS \n \nDISTRICT-WIDE FINANCIAL STATEMENTS \n \nA \n \nSTATEMENT OF NET POSITION \n \nB \n \nSTATEMENT OF ACTIVITIES \n \nFUND FINANCIAL STATEMENTS \n \nC \n \nBALANCE SHEET \n \nGOVERNMENTAL FUNDS \n \nD \n \nRECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \n \nTO THE STATEMENT OF NET POSITION \n \nE \n \nSTATEMENT OF REVENUES, EXPENDITURES AND CHANGES \n \nIN FUND BALANCES \n \nGOVERNMENTAL FUNDS \n \nF \n \nRECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT \n \nOF REVENUES, EXPENDITURES AND CHANGES IN FUND \n \nBALANCES TO THE STATEMENT OF ACTIVITIES \n \nG \n \nSTATEMENT OF FIDUCIARY NET POSITION \n \nFIDUCIARY FUNDS \n \nH \n \nNOTES TO THE BASIC FINANCIAL STATEMENTS \n \nSCHEDULES \n \nREQUIRED SUPPLEMENTARY INFORMATION \n \n1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND \n \nPage \ni \n1 2 4 5 6 7 8 9 \n27 \n \n  FRANKLIN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \n \nSECTION I \nFINANCIAL \nSCHEDULES \nSUPPLEMENTARY INFORMATION \n2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 3 SCHEDULE OF STATE REVENUE 4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 5 ALLOTMENTS AND EXPENDITURES \nGENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) BY PROGRAM \n \nPage \n28 29 30 31 \n \nSECTION II \nCOMPLIANCE AND INTERNAL CONTROL REPORTS \nINDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS \nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 \n \nSECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS \n \nSECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS \n \n  SECTION I FINANCIAL \n \n  Greg S. Griffin \nSTATE AUDITOR \n(404) 656-2174 \n \nDEPARTMENT OF AUDITS AND ACCOUNTS \n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \nOctober 23, 2014 \n \nHonorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education \nand Superintendent and Members of the Franklin County Board of Education \nINDEPENDENT AUDITOR'S REPORT \nLadies and Gentlemen: \nReport on the Financial Statements \nWe have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information (Exhibits A through H) of the Franklin County Board of Education, as of and for the year ended June 30, 2013, and the related notes to the financial statements, which collectively comprise the Board's basic financial statements as listed in the table of contents. \nManagement's Responsibility for the Financial Statements \nManagement is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. \nAuditor's Responsibility \nOur 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 Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. \nAn audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express \n2013ARL-11 \n \n  no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. \nWe believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. \nOpinions \nIn 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 Franklin County Board of Education, as of June 30, 2013, and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. \nEmphasis of Matter \nAs described in Note 2 to the financial statements, in 2013, the Franklin County Board of Education adopted new accounting guidance, Governmental Accounting Standards Board (GASB) Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position. Our opinion is not modified with respect to this matter. \nOther Matters \nRequired Supplementary Information \nAccounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis and the Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on pages i through ix and page 27 respectively, 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 regarding 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 our 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. \nOther Information \nOur audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Franklin County Board of Education's basic financial statements. The accompanying supplementary information, consisting of Schedules 2 through 5, is presented for the purposes of additional analysis and is not a required part of the basic financial statements. The Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is not a required part of the basic financial statements. \nThe accompanying supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and \n2013ARL-11 \n \n  reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic 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 basic financial statements as a whole. \nOther Reporting Required by Governm ent Auditing Standards \nIn accordance with Government Auditing Standards, we have also issued our report dated October 23, 2014, on our consideration of the Franklin County 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 Auditing Standards in considering Franklin County Board of Education's internal control over financial reporting and compliance. \nA 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. \nRespectfully submitted, \n \nGSG:as 2013ARL-11 \n \nGreg S. Griffin State Auditor \n \n  FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 \nINTRODUCTION \nThe School District's financial statements for the fiscal year ended June 30, 2013 includes a series of basic financial statements that report financial information for the District as a whole, its funds, and its fiduciary responsibilities. The Statement of Net Position and the Statement of Activities provide financial information about all of the School District's activities and present both a ShortTerm and Long-Term view of the School District's finances on a global basis. The fund financial statements provide information about all of the School District's funds. Information about these funds, such as the School District's General Fund, is important in its own right, but will also give insight into the School District's overall soundness as reported in the Statement of Net Position and the Statement of Activities. \nFINANCIAL HIGHLIGHTS \nKey financial highlights for fiscal year 2013 are as follows: \nOn the District-wide financial statements: \n District-wide net position at June 30, 2013 was $59.3 million. Net position reflects the difference between all assets of the District (including capital assets, net of depreciation) and all liabilities, both Short-Term and Long-Term. The net position at June 30, 2013 of $59.3 million represented an increase of $5.4 million in net position when compared to the prior year. \n The School District had $33.8 million in expenses relating to governmental activities; about $24.9 million of these expenses were offset by program specific charges for services, grants and contributions. However, general revenues (primarily property and sales taxes) of $14.3 million were adequate to provide for these programs. \n As stated above, general revenues accounted for $14.3 million or about 36.4% of all revenues totaling $39.0 million. Program specific revenues in the form of charges for services, grants, and contributions accounted for the balance of these revenues. Percentages shown in the table below are rounded to one decimal place. \n \nSource of Revenues \nProgram Revenues \n63.6% \n \nGeneral Revenue - Property Taxes \n23.4% \nGeneral Revenue - Sales Taxes 8.9% \nGeneral Revenue - All Other 4.1% \n \ni \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 \nOn the fund financial statements: \n Among major funds, the General Fund had almost $32.1 million in revenues and $31.4 million in expenditures. The General Fund balance of almost $4.0 million at June 30, 2013 increased by roughly $637,000 from the prior year. \nOVERVIEW OF THE FINANCIAL STATEMENTS \nThese financial Statements consists of three parts; management's discussion and analysis (this section), the basic financial statements including notes to the financial statements and required supplementary information. The basic financial statements include two levels of statements that present different views of the School District. These include the District-wide and fund financial statements. \nThe District-wide financial statements include the 'Statement of Net Position' and 'Statement of Activities'. These statements provide information about the activities of the School District presenting both short-term and long-term information about the School District's overall financial status. \nThe fund financial statements focus on individual parts of the School District, reporting the School District's operation in more detail. The 'Governmental Funds' statements disclose how basic services are financed in the short-term as well as what remains for future spending. The 'Fiduciary Funds' statements provide information about the financial relationships in which the School District acts solely as a trustee or agent for the benefit of others. In the case of the Franklin County School District, the General Fund, Capital Projects Funds, and Debt Service Funds are all considered to be major funds. The District reported no funds as nonmajor funds. \nThe financial statements also include notes that explain some of the information in the statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and supports the financial statements. Additionally, other supplementary information (not required) is also presented that further supplements understanding of the financial statements. \nDistrict-wide Statements \nSince Franklin County School District has no operations that have been classified as \"Business Activities\", the District-wide financial statements are basically a consolidation of all of the School District's operating funds into one column called governmental activities. In reviewing the Districtwide financial statements, a reader might ask the question, are we in a better financial position now than last year? The 'Statement of Net Position' and the 'Statement of Activities' provides the basis for answering this question. These financial statements include all School District's assets and liabilities; and uses the accrual basis of accounting similar to the accounting used by most privatesector companies. This basis of accounting takes into account all of the current year's revenues and expenses regardless of when cash is received or paid. \nThese two statements report the School District's net position and any changes in that net position. The change in net position is important because it tells the reader that, for the School District as a whole, the financial position of the School District has improved or diminished. The causes of this change may be the results of many factors, including those not under the School District's control, such as the property tax base, facility conditions, required educational programs, student-teacher ratios, and other factors. \nii \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 \nWhen analyzing District-wide financial statements, it is important to remember these statements are prepared using an economic resources measurement focus (accrual accounting) and involve the following steps to format the Statement of Net Position: \n Capitalize current outlays for capital assets  Depreciate capital assets  Report long-term debt as a liability  Calculate revenue and expense using the economic resources measurement focus and the \naccrual basis of accounting  Allocate net assets as follows: \no Net Investment in Capital Assets o Restricted net position is those with constraints placed on the use by external sources \nsuch as creditors, grantors, contributors or laws and regulations. o Unrestricted net position is those funds do not meet any of the above restrictions. \nFund Financial Statements \nThe School District uses many funds or sub-funds to account for a multitude of financial transactions during the fiscal year. The fund financial statements presented in this report provide detail information about the School District's significant or major funds. As discussed previously, the School District reported no funds as nonmajor Funds as defined by generally accepted accounting principles. \nThe District has two kinds of funds as discussed below: \nGovernmental Funds  Most of the School District's activities are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end available for spending in future periods. These funds are reported using the modified accrual method of accounting which measures cash and all other financial assets that can be readily be converted to cash. The governmental fund statements provide a detailed short-term view of the School District's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance educational programs. The differences between government activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds are reconciled in the financial statements. \nFiduciary Funds  The School District is the trustee, or fiduciary, for assets that belong to clubs, organizations and others within the principals' accounts. The School District is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. The School District excludes these activities from the District-wide financial statements because it cannot use these assets to finance its operations. \nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT AS A WHOLE \nNet position, which is the difference between total assets and total liabilities, is one indicator of the financial condition of the District. When revenues exceed expenses, the result is an increase in net position. When expenses exceed revenues, the result is a decrease in net position. The relationship between revenues and expenses can be thought of as the School District's operating results. The School District's net position, as measured in the Statement of Net Position, can be one way to measure the School District's financial health, or financial position. Over time, increases or \niii \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 \n \ndecreases in the School District's net position, as measured in the Statement of Activities, is one indicator of whether its financial health is improving or deteriorating. However, the School District's goal and mission is to provide success for each child's education, not to generate profits as private corporations do. For this reason, many other nonfinancial factors should be considered in assessing the overall health of the District. \nIn the case of the Franklin County School District, assets exceeded liabilities by almost $59.3 million at June 30, 2013. To better understand the School District's actual financial position and ability to deliver services in future periods, it is necessary to review the various components of the net position category. For example, of the $59.3 million included as a part of net position, about $5.3 million was restricted for continuation of various Federal programs, debt service and ongoing capital projects. Accordingly, these funds were not available to meet the School District's ongoing obligations to citizens and creditors. \nIn addition, the School District had $51.3 million net investment in capital assets (e.g., land, buildings, and equipment, etc.). The District uses these capital assets to provide educational services to students within geographic boundaries served by the District. Because of the very nature and on-going use of the assets being reported in this component of net assets, it must be recognized that this portion of net position is not available for future spending. \nThe remaining balance of unrestricted net position of $2.7 million may be used to meet the School District's ongoing obligations to citizens and creditors. \nTable 1 provides a summary of the School District's net position for this fiscal year as compared to the prior fiscal year. \nTable 1 Net Position \n \nGovernmental Activities \n \nFiscal \n \nFiscal \n \nYear 2013 \n \nYear 2012 \n \nAssets Current and Other Assets Capital Assets, Net \n \n$ \n \n18,573,993 $ \n \n10,098,580 \n \n59,298,409 \n \n53,165,684 \n \nTotal Assets \n \n$ \n \n77,872,402 $ \n \n63,264,264 \n \nLiabilities Current and Other Liabilities Long-Term Liabilities \n \n$ \n \n5,330,882 $ \n \n4,427,445 \n \n13,248,769 \n \n4,950,000 \n \nTotal Liabilities \n \n$ \n \n18,579,651 $ \n \n9,377,445 \n \nNet Position Net Investment in Capital Assets Restricted Unrestricted \n \n$ \n \n51,287,528 $ \n \n50,295,486 \n \n5,284,595 \n \n2,537,056 \n \n2,720,628 \n \n1,054,277 \n \nTotal Net Position \n \n$ \n \n59,292,751 $ \n \n53,886,819 \n \niv \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 \n \nTotal net position increased $5.4 million in fiscal year 2013 from the prior year. This change in net position is detailed in Table 2 as presented below. Table 2 also shows the changes in net position as compared to the prior fiscal year. \n \nTable 2 Change in Net Position \n \nRevenues Program Revenues: Charges for Services and Sales Operating Grants and Contributions Capital Grants and Contributions \n \nGovernmental Activities \n \nFiscal Year \n \nFiscal Year \n \n2013 \n \n2012 \n \n$ \n \n581,167 $ \n \n578,361 \n \n20,576,050 \n \n19,837,438 \n \n3,784,158 \n \n290,492 \n \nTotal Program Revenues \n \n$ \n \n24,941,375 $ \n \n20,706,291 \n \nGeneral Revenues: Taxes Property Taxes Sales Taxes Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous \n \n$ \n \n9,199,957 $ \n \n9,084,999 \n \n3,483,918 \n \n3,503,406 \n \n470,045 37,698 \n1,095,820 \n \n731,200 34,716 \n882,824 \n \nTotal General Revenues \n \n$ \n \n14,287,438 $ \n \n14,237,145 \n \nTotal Revenues \n \n$ \n \n39,228,813 $ \n \n34,943,436 \n \nProgram Expenses: 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 Operations of Non-Instructional Services Enterprise Operations Food Services Interest on Short-Term and Long-Term Debt \n \n$ \n \n21,162,973 $ \n \n20,844,932 \n \n1,085,594 1,370,202 \n490,764 405,724 1,971,600 373,658 2,189,014 2,129,679 \n879 230,969 \n \n1,005,496 1,370,245 \n735,419 383,528 2,056,130 441,512 2,127,459 1,807,861 110,835 210,949 \n \n417,899 1,591,575 \n402,351 \n \n371,646 1,551,759 \n297,791 \n \nTotal Expenses \n \n$ \n \n33,822,881 $ \n \n33,315,562 \n \nIncrease in Net Position \n \n$ \n \n5,405,932 $ \n \n1,627,874 \n \nv \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 \n \nCost of Providing Services \nThe Statement of Activities shows the cost of program services and the charges for services and grants offsetting these services. Table 3 shows, for governmental activities, the total cost of services and the net cost of services. Net cost of services can be defined as the total cost less fees generated by the activities and intergovernmental revenue provided for specific programs. The net cost reflects the financial burden on the School District's taxpayers by each activity as compared to the prior fiscal year. \nTable 3 Governmental Activities \n \nTotal Cost of Services \n \nFiscal \n \nFiscal \n \nYear 2013 \n \nYear 2012 \n \nNet Cost of Services \n \nFiscal \n \nFiscal \n \nYear 2013 \n \nYear 2012 \n \nInstruction \n \n$ \n \nSupport Services: \n \nPupil Services \n \nImprovement of Instructional Services \n \nEducational Media Services \n \nGeneral Administration \n \nSchool Administration \n \nBusiness Administration \n \nMaintenance and Operation of Plant \n \nStudent Transportation Services \n \nCentral Support Services \n \nOther Support Services \n \nOperations of Non-Instructional Services: \n \nEnterprise Operations \n \nFood Services \n \nInterest on Short-Term and Long-Term Debt \n \n21,162,973 $ \n1,085,594 1,370,202 \n490,764 405,724 1,971,600 373,658 2,189,014 2,129,679 \n879 230,969 \n417,899 1,591,575 \n402,351 \n \n20,844,932 $ \n1,005,496 1,370,245 \n735,419 383,528 2,056,130 441,512 2,127,459 1,807,861 110,835 210,949 \n371,646 1,551,759 \n297,791 \n \n3,322,484 $ \n947,188 812,310 -63,094 -328,542 720,279 335,098 1,010,664 1,427,538 \n879 187,832 \n325,324 -218,805 402,351 \n \n6,948,884 \n810,607 803,645 273,338 -288,143 1,011,615 432,280 929,830 935,113 110,835 169,411 \n262,449 -88,385 297,791 \n \nTotal Expenses \n \n$ \n \n33,822,881 $ \n \n33,315,562 $ \n \n8,881,506 $ \n \n12,609,270 \n \nExpenditures for fiscal year 2013 vs. fiscal year 2012 increased modestly by a bit more than $500,000. However, the net costs of services appear to have dramatically decreased in fiscal 2013 vs. 2012 but that is not really the case. In fiscal year 2013, the District had almost $3.8 million in Capital Grants vs. only $290,000 of Capital Grants in fiscal year 2012. If we ignore the Capital Grants in both fiscal years, the net costs of providing services would have changed only slightly between fiscal years. \nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT'S FUNDS \nInformation about the School District's governmental funds is presented starting on Exhibit \"C\" of this report. Governmental funds are accounted for using the modified accrual basis of accounting. The governmental funds had total revenues of over $35.4 million and total expenditures of $45.0 million in fiscal year 2013. The excess amount of expenditures over revenues ($9.6 million) was primarily funded by the issuance of new debt in fiscal year 2013 through sale of general obligation bonds. Total governmental fund balances of over $9.3 million at June 30, 2013, increased about $3.9 million from the prior year. \nvi \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 \n \nGeneral Fund Budget Highlights \nThe School District's budget is prepared according to Georgia Law. The most significant budgeted fund is the General Fund. During the course of fiscal year 2013, the School District amended its General Fund budget as needed. \nThe School District budget is adopted at the aggregate level and maintained at the program, function, object, and site levels to facilitate budgetary control. The budgeting systems are designed to control the total budget, but provide flexibility to meet the ongoing programmatic needs. The budgeting systems are also designed to control total site budgets but provide flexibility for site management as well. \nFor the General Fund, the final actual revenues of almost $32.1 million exceeded the budgeted amount by almost $1.2 million. This budget variance was primarily due to actual revenues for miscellaneous revenues exceeding the budget by almost $1.0 million. The District traditionally estimates revenue on a conservative basis to avoid substantial shortfalls in actual revenues. \nThe General Fund's final actual expenditures of $31.4 million exceeded the budget by roughly $43,000. This small variance demonstrates the Board did a creditable job of budgeting General Fund expenditures in fiscal year 2013. \nCAPITAL ASSETS AND DEBT ADMINISTRATION \nCapital Assets \nAt fiscal year ended June 30, 2013, the School District had almost $59.3 million invested in capital assets, net of accumulated depreciation, all in governmental activities. These assets are made up of a broad range of items including buildings; land; land improvements; and food service, transportation and maintenance equipment; and intangible assets. Table 4 reflects a summary of these balances, net of accumulated depreciation, as compared to the prior fiscal year. \n \nTable 4 Capital Assets (Net of Depreciation) \n \nGovernmental Activities \n \nFiscal \n \nFiscal \n \nYear 2013 \n \nYear 2012 \n \nLand Construction In Progress Land Improvements Building and Improvements Equipment Intangible Assets \n \n$ \n \n1,370,441 $ \n \n7,990,602 \n \n6,792,956 \n \n41,279,068 \n \n1,819,706 \n \n45,636 \n \n1,338,157 851,980 \n6,902,134 41,929,325 \n2,087,914 56,174 \n \nTotal \n \n$ \n \n59,298,409 $ \n \n53,165,684 \n \nAdditional information about the School District's Capital Assets can be found in the Notes to the Basic Financial Statements. \n \nvii \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 \n \nLong-Term Debt \n \nAt June 30, 2013, the School District had $13.2 million in total debt outstanding which consisted entirely bond debt and unamortized bond premium. Table 5 summarizes the School District's debt as compared to the prior fiscal year. \nTable 5 \nDebt at June 30 \n \nGovernmental Activities \n \nFiscal \n \nFiscal \n \nYear 2013 \n \nYear 2012 \n \nBonds Payable \n \n$ \n \nUnamortized Premium on Bonds Sold \n \n12,120,000 $ 1,128,769 \n \n4,950,000 \n \nTotal \n \n$ \n \n13,248,769 $ \n \n4,950,000 \n \nAdditional information about the School District's debt can be found in the Notes to the Basic Financial Statements. \nFACTORS BEARING ON THE SCHOOL DISTRICT'S FUTURE \nCurrently known circumstances that are expected to have a significant effect on financial position or results of operations in future years are as follows: \n The District is financially stable. The School District's operating millage for fiscal year 2013 was 16.868, which produced approximately $545,000 per mill. The School District continues to maintain a stable enrollment of approximately 3,600 students. The District plans to fund capital outlays with the one percent local sales tax revenue and state capital outlay grants. \n The School District continues to be financially challenged by the depressed economy and stagnate property values. Revenues in fiscal year 2013 from property taxes actually decreased roughly $118,000 from the prior year as reported on the Fund Statements. \n Despite the constrained levels of revenues realized in fiscal year 2013, the School District is in excellent financial condition. The General Fund had an unassigned fund balance of over $2.9 million at June 30, 2013, which is up over $1.0 million as compared to the prior year. The Board anticipates significant financial challenges going forward due to expected continued flat revenues and higher health insurance costs for employees. In spite of these challenges, the School District will continue to be a good steward of tax dollars while providing a quality educational opportunity. \n \nviii \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2013 CONTACTING THE SCHOOL DISTRICT'S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, investors and creditors with a general overview of the School District's finances and to show the School District's accountability for the money it receives. If you have questions about this report or need additional financial information, contact Mr. Tom Porter, Finance Director, Franklin County Board of Education, 280 Busch Road, Carnesville, Georgia 30521. You may also email your questions to Mr. Porter at tporter@franklin.k12.ga.us. \nix \n \n  FRANKLIN COUNTY BOARD OF EDUCATION \n \n  FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF NET POSITION JUNE 30, 2013 \nASSETS \nCash and Cash Equivalents Investments Accounts Receivable, Net \nTaxes State Government Federal Government Local Other Inventories Prepaid Items Capital Assets, Non-Depreciable Capital Assets, Depreciable (Net of Accumulated Depreciation) \nTotal Assets \nLIABILITIES \nAccounts Payable Salaries and Benefits Payable Payroll Withholdings Payable Interest Payable Contracts Payable Retainages Payable Deposits and Deferred Revenues Long-Term Liabilities \nDue Within One Year Due in More Than One Year \nTotal Liabilities \nNET POSITION \nNet Investment in Capital Assets Restricted for \nContinuation of Federal Programs Debt Service Capital Projects Unrestricted \nTotal Net Position \n \nEXHIBIT \"A\" \n \nGOVERNMENTAL ACTIVITIES \n \n$ 3,630,513.96 7,166,084.02 \n1,055,608.43 6,067,280.83 \n567,100.74 16,288.89 471.17 69,107.72 1,537.50 \n9,361,043.66 49,937,364.92 \n$ 77,872,401.84 \n \n$ \n \n125,953.43 \n \n3,599,598.07 \n \n2,659.47 \n \n169,258.23 \n \n489,039.00 \n \n616,483.00 \n \n327,890.71 \n \n2,425,753.88 10,823,015.54 \n \n$ 18,579,651.33 \n \n$ 51,287,527.72 \n592,357.20 908,079.37 3,784,158.10 2,720,628.12 \n \n$ 59,292,750.51 \n \nThe notes to the basic financial statements are an integral part of this statement. - 1 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES \nFOR THE YEAR ENDED JUNE 30, 2013 \n \nGOVERNMENTAL ACTIVITIES \nInstruction Support Services \nPupil 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 Operations of Non-Instructional Services Enterprise Operations Food Services Interest on Short-Term and Long-Term Debt \nTotal Governmental Activities \nGeneral Revenues Taxes Property Taxes For Maintenance and Operations Sales Taxes Special Purpose Local Option Sales Tax For Capital Projects Other Sales Tax Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous \nTotal General Revenues \nChange in Net Position \nNet Position - Beginning of Year \nNet Position - End of Year \n \nEXPENSES \n \nCHARGES FOR SERVICES \n \n$ 21,162,972.89 $ \n1,085,593.71 1,370,201.97 \n490,764.00 405,724.03 1,971,600.42 373,658.44 2,189,014.38 2,129,679.02 \n879.42 230,968.65 \n417,898.81 1,591,574.77 \n402,350.75 \n$ 33,822,881.26 $ \n \n44,383.68 \n46,250.00 37,687.11 92,574.71 360,271.42 581,166.92 \n \nThe notes to the basic financial statements are an integral part of this statement. - 2 - \n \n EXHIBIT \"B\" \n \nPROGRAM REVENUES OPERATING GRANTS AND \nCONTRIBUTIONS \n \nCAPITAL GRANTS AND CONTRIBUTIONS \n \nNET (EXPENSES) REVENUES \nAND CHANGES IN NET POSITION \n \n$ 14,520,538.34 $ \n138,405.55 557,892.14 489,906.14 734,266.50 1,057,572.60 \n-38.33 1,093,123.42 \n664,453.58 \n43,136.53 \n \n3,275,567.16 $ \n63,952.27 193,748.89 \n38,598.41 38,976.83 \n \n1,276,793.76 \n \n173,314.44 \n \n$ 20,576,050.23 $ \n \n3,784,158.00 $ \n \n-3,322,483.71 \n-947,188.16 -812,309.83 \n63,094.41 328,542.47 -720,278.93 -335,098.36 -1,010,664.13 -1,427,538.33 \n-879.42 -187,832.12 \n-325,324.10 218,804.85 -402,350.75 \n-8,881,506.11 \n \n$ \n \n9,199,957.04 \n \n3,322,527.19 161,390.73 470,045.00 37,698.43 \n1,095,819.66 \n \n$ \n \n14,287,438.05 \n \n$ \n \n5,405,931.94 \n \n53,886,818.57 \n \n$ \n \n59,292,750.51 \n \n- 3 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION BALANCE SHEET \nGOVERNMENTAL FUNDS JUNE 30, 2013 \n \nEXHIBIT \"C\" \n \nASSETS \nCash and Cash Equivalents Investments Due from Other Funds Accounts Receivable, Net \nTaxes State Government Federal Government Local Other Inventories Prepaid Items \nTotal Assets \n \nGENERAL FUND \n \nDISTRICTWIDE \nCAPITAL PROJECTS \nFUND \n \nDEBT SERVICE \nFUND \n \nTOTAL \n \n$ 3,182,038.45 $ 1,394,789.57 \n \n755,431.22 \n \n$ \n \n6,050,359.30 $ 1,115,724.72 \n \n3,937,469.67 7,166,084.02 1,394,789.57 \n \n787,039.74 2,283,122.83 \n567,100.74 16,288.89 471.17 69,107.72 \n \n3,784,158.00 1,537.50 \n \n268,568.69 \n \n1,055,608.43 6,067,280.83 \n567,100.74 16,288.89 471.17 69,107.72 1,537.50 \n \n$ 8,299,959.11 $ 10,591,486.02 $ 1,384,293.41 $ 20,275,738.54 \n \nLIABILITIES AND FUND BALANCES \nLIABILITIES \nCash Overdraft Accounts Payable Salaries and Benefits Payable Payroll Withholdings Payable Due to Other Funds Contracts Payable Retainages Payable Deposits and Deferred Revenue \nTotal Liabilities \nFUND BALANCES \nNonspendable Restricted Committed Unassigned \nTotal Fund Balances \nTotal Liabilities and Fund Balances \n \n$ 118,901.64 $ 3,599,598.07 2,659.47 \n599,499.32 \n \n$ 7,051.79 \n1,394,789.57 489,039.00 616,483.00 \n3,784,158.00 \n \n306,955.71 $ \n \n306,955.71 125,953.43 3,599,598.07 \n2,659.47 1,394,789.57 \n489,039.00 616,483.00 4,383,657.32 \n \n$ 4,320,658.50 $ 6,291,521.36 $ 306,955.71 $ 10,919,135.57 \n \n$ 69,107.72 $ 523,249.48 433,464.91 \n2,953,478.50 \n \n1,537.50 \n \n$ \n \n4,298,427.16 $ 1,077,337.70 \n \n70,645.22 5,899,014.34 \n433,464.91 2,953,478.50 \n \n$ 3,979,300.61 $ 4,299,964.66 $ 1,077,337.70 $ 9,356,602.97 \n \n$ 8,299,959.11 $ 10,591,486.02 $ 1,384,293.41 $ 20,275,738.54 \n \nThe notes to the basic financial statements are an integral part of this statement. - 4 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \nTO THE STATEMENT OF NET POSITION JUNE 30, 2013 \n \nEXHIBIT \"D\" \n \nTotal Fund Balances - Governmental Funds (Exhibit \"C\") \nAmounts reported for Governmental Activities in the Statement of Net Position are different because: \nCapital Assets used in Governmental Activities are not financial resources and therefore are not reported as assets in governmental funds. These assets consist of: \nLand Construction in Progress Land Improvements Buildings Equipment Intangible Assets Accumulated Depreciation \nTotal Capital Assets \nTaxes that are not available to pay for current period expenditures are deferred in the governmental funds. \nProperty Taxes \nGeorgia State Financing and Investment Commission grants that are not available to pay current period expenditures are deferred in the funds. \nLong-Term Liabilities, including Bonds Payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. Long-Term Liabilities at year-end consist of: \nBonds Payable Accrued Interest Payable Bond Premiums, Net of Amortization \nTotal Long-Term Liabilities \n \n$ 9,356,602.97 \n \n$ 1,370,441.39 7,990,602.27 7,675,786.19 \n50,113,066.70 5,370,266.98 105,379.62 \n-13,327,134.57 \n \n59,298,408.58 \n \n271,608.61 3,784,158.00 \n \n$ -12,120,000.00 -169,258.23 \n-1,128,769.42 \n \n-13,418,027.65 \n \nNet Position of Governmental Activities (Exhibit \"A\") \n \n$ 59,292,750.51 \n \nThe notes to the basic financial statements are an integral part of this statement. - 5 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES \nGOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2013 \n \nEXHIBIT \"E\" \n \nREVENUES \nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous \nTotal Revenues \nEXPENDITURES \nCurrent 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 Food Services Operation \nCapital Outlay Debt Services \nPrincipal Dues and Fees Interest \nTotal Expenditures \nExcess of Revenues over (under) Expenditures \nOTHER FINANCING SOURCES (USES) \nProceeds of Long-Term Capital Related Debt Premiums on Bonds Sold Transfers In Transfers Out \nTotal Other Financing Sources (Uses) \nNet Change in Fund Balances \nFund Balances - Beginning \nFund Balances - Ending \n \nGENERAL FUND \n \nDISTRICTWIDE \nCAPITAL PROJECTS \nFUND \n \nDEBT SERVICE \nFUND \n \nTOTAL \n \n$ 9,180,787.50 $ 161,390.73 \n17,282,363.99 3,763,731.24 581,166.92 16,862.53 1,095,819.66 \n$ 32,082,122.57 $ \n \n0.00 $ \n \n$ 3,322,527.19 \n20,835.90 \n \n9,180,787.50 3,483,917.92 17,282,363.99 3,763,731.24 \n581,166.92 37,698.43 \n1,095,819.66 \n \n0.00 $ 3,343,363.09 $ 35,425,485.66 \n \n$ 19,919,212.27 \n \n$ 19,919,212.27 \n \n1,085,593.71 1,370,201.97 \n459,850.07 405,724.03 1,877,794.66 213,057.31 $ 2,170,102.16 1,785,793.47 \n879.42 230,968.65 417,898.81 1,507,559.33 \n \n141,986.24 7,966,632.67 \n \n1,085,593.71 1,370,201.97 \n459,850.07 405,724.03 1,877,794.66 355,043.55 2,170,102.16 1,785,793.47 \n879.42 230,968.65 417,898.81 1,507,559.33 7,966,632.67 \n \n$ 210.84 \n \n4,950,000.00 503,376.81 \n \n4,950,000.00 210.84 \n503,376.81 \n \n$ 31,444,635.86 $ 8,108,829.75 $ 5,453,376.81 $ 45,006,842.42 \n \n$ \n \n637,486.71 $ -8,108,829.75 $ -2,110,013.72 $ -9,581,356.76 \n \n$ \n \n0.00 $ 12,120,000.00 \n \n$ 12,120,000.00 \n \n1,354,523.30 \n \n1,354,523.30 \n \n$ 1,065,728.89 \n \n1,065,728.89 \n \n-1,065,728.89 \n \n-1,065,728.89 \n \n$ \n \n0.00 $ 12,408,794.41 $ 1,065,728.89 $ 13,474,523.30 \n \n$ \n \n637,486.71 $ 4,299,964.66 $ -1,044,284.83 $ 3,893,166.54 \n \n3,341,813.90 \n \n0.00 \n \n2,121,622.53 \n \n5,463,436.43 \n \n$ 3,979,300.61 $ 4,299,964.66 $ 1,077,337.70 $ 9,356,602.97 \n \nThe notes to the basic financial statements are an integral part of this statement. - 6 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF \nREVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2013 \n \nEXHIBIT \"F\" \n \nTotal Net Change in Fund Balances - Governmental Funds (Exhibit \"E\") \n \n$ 3,893,166.54 \n \nAmounts reported for Governmental Activities in the Statement of Activities are different because: \n \nCapital Outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activities, the cost of Capital Assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are: \n \nCapital Outlay Depreciation Expense \nExcess of Capital Outlay over Depreciation Expense \n \n$ 7,170,905.85 -1,038,181.59 \n \n6,132,724.26 \n \nTaxes reported in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. \n \n19,169.54 \n \nBond proceeds provide current financial resources to Governmental Funds; however, issuing debt increases Long-Term Liabilities in the Statement of Net Position. In the current period, proceeds were received from: \n \nGeneral Obligation Bonds Issued, Including a Premium of $1,354,523.30 \n \n-13,474,523.30 \n \nGrant Revenues from the Georgia State Financing Investments not available to pay current expenditures are not required to be deferred in the Statement of Activities as they are in the Fund Statements. \n \n3,784,158.00 \n \nRepayment of Long-Term Debt is reported as an expenditure in Governmental Funds, but the repayment reduces Long-Term Liabilities in the Statement of Net Position. In the current year, these amounts consist of: \n \nBond Principal Retirements Amortization of Bond Premiums \nTotal Long-Term Debt Repayments \n \n$ 4,950,000.00 225,753.88 \n \n5,175,753.88 \n \nSome items reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in Governmental Funds. These activities consist of: \n \nNet Increase in Accrued Interest on Issuance of Bonds \n \n-124,516.98 \n \nChange in Net Position of Governmental Activities (Exhibit \"B\") \n \n$ 5,405,931.94 \n \nThe notes to the basic financial statements are an integral part of this statement. - 7 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET POSITION \nFIDUCIARY FUNDS JUNE 30, 2013 \nASSETS Cash and Cash Equivalents \nLIABILITIES Funds Held for Others \n \nEXHIBIT \"G\" \nAGENCY FUNDS $ 129,224.53 \n$ 129,224.53 \n \nThe notes to the basic financial statements are an integral part of this statement. - 8 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2013 \n \nEXHIBIT \"H\" \n \nNote 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY \nREPORTING ENTITY \nThe Franklin County 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. \nNote 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES \nBASIS OF PRESENTATION \nThe 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 Franklin County Board of Education. \nDistrict-wide Statements: The Statement of Net Position 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. \nThe Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities. \n Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of 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. \n 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. \nFund Financial Statements: 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 District had no funds that were reported as nonmajor funds. \nThe School District reports the following major governmental funds: \n General Fund is the School District's primary operating fund. It accounts for and reports all financial resources not accounted for and reported in another fund. \n \n- 9 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2013 \n \nEXHIBIT \"H\" \n \n District-wide Capital Projects Fund accounts for and reports financial resources including Education Special Purpose Local Option Sales Tax (ESPLOST), Bond Proceeds and grants from Georgia State Financing and Investment Commission that are restricted, committed or assigned to the expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets. \n Debt Service Fund accounts for and reports financial resources that are restricted, committed, or assigned including taxes (sales) legally restricted for the payment of general long-term principal and interest. \nThe School District reports the following fiduciary fund type: \n Agency funds account for assets held by the School District as an agent for various funds, governments, clubs or individuals. \nBASIS OF ACCOUNTING \nThe 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 is recognized in the fiscal year in which all eligibility requirements have been satisfied. \nThe 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. \nGovernmental 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. The School District considers all intergovernmental revenues to be available if they are collected within 120 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, except for principal and interest on general long-term debt, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities and acquisitions under capital leases are reported as other financing sources. \nThe 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 is both restricted and unrestricted net position 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. \n \n- 10 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2013 \n \nEXHIBIT \"H\" \n \nNEW ACCOUNTING PRONOUNCEMENTS \nIn fiscal year 2013, the School District adopted the Governmental Accounting Standards Board (GASB) Statement No. 60, Accounting and Financial Reporting for Service Concession Arrangements. The provisions of this Statement establish accounting and financial reporting standards for governments who enter into Service Concession Arrangements (SCA) with other governmental or nongovernmental entities. As of June 30, 2013, the School District has not entered into any arrangements that meet the qualifications to be reported as a SCA in accordance with this standard. \nIn fiscal year 2013, the School District adopted the Governmental Accounting Standards Board (GASB) Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. The provisions of this Statement incorporate certain accounting and financial reporting guidance into authoritative GASB literature. \nIn fiscal year 2013, the School District adopted the Governmental Accounting Standards Board (GASB) Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources and Net Position. The provisions of this Statement establish financial reporting standards for the presentation of deferred outflows of resources and deferred inflows of resources and their effects on a government's net position. The School District changed its presentation of net assets to net position for fiscal year 2013. There were no other applicable reporting changes for the School District. \nCASH AND CASH EQUIVALENTS \nComposition 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. \nINVESTMENTS \nComposition of Investments Investments 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 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: \n(1) Obligations issued by the State of Georgia or by other states, \n(2) Obligations issued by the United States government, \n(3) Obligations fully insured or guaranteed by the United States government or a United States government agency, \n \n- 11 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2013 \n \nEXHIBIT \"H\" \n \n(4) Obligations of any corporation of the United States government, \n \n(5) Prime banker's acceptances, \n \n(6) The Georgia Fund 1 administered by the State of Georgia, Office of the State Treasurer, \n \n(7) Repurchase agreements, and \n \n(8) Obligations of other political subdivisions of the State of Georgia. \n \nThe 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. \n \nRECEIVABLES \n \nReceivables 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. \n \nPROPERTY TAXES \n \nThe Franklin County Board of Commissioners adopted the property tax levy for the 2012 tax digest year (calendar year) on July 20, 2012 (levy date) based on property values as of January 1, 2012. Taxes were due on November 15, 2012 (due date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2012 tax digest are reported as revenue in the governmental funds for fiscal year 2013. The Franklin County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2013, for maintenance and operations amounted to $9,087,735.19. \n \nThe tax millage rate levied for the 2012 tax year (calendar year) for the Franklin County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value): \n \nSchool Operations \n \n16.868 mills \n \nAdditionally, Title Ad Valorem Tax revenues, at the fund reporting level, amounted to $93,052.31 during fiscal year ended June 30, 2013. \n \nSALES TAXES \n \nEducation Special Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $3,322,527.19 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years. The most recent authorization expires on December 31, 2017. \n \n- 12 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2013 \n \nEXHIBIT \"H\" \n \nINVENTORIES \nFood 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. \n \nPREPAID ITEMS \nPayments made to vendors for services that will benefit periods subsequent to June 30, 2013, are recorded as prepaid items. \nCAPITAL ASSETS \n \nCapital 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 fiscal year 2013, no events or changes in circumstances affecting a capital asset that may indicate impairment were known to the School District. \n \nCapitalization thresholds and estimated useful lives of capital assets reported in the District-wide statements are as follows: \n \nCapitalization \n \nEstimated \n \nPolicy \n \nUseful Life \n \nLand Land Improvements Buildings and Improvements Equipment Intangible Assets \n \nAny Amount $ 10,000.00 $ 20,000.00 $ 5,000.00 $ 20,000.00 \n \nN/A 20 to 80 years 25 to 80 years \n5 to 50 years estimated life \n \nDepreciation 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. \n \nAmortization 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, generally 10 to 20 years. \n \n- 13 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2013 \n \nEXHIBIT \"H\" \n \nGENERAL OBLIGATION BONDS \nThe School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. In the District-wide financial statements, bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. \nIn the fund financial statements, the School District recognizes bond premiums and discounts during the fiscal year bonds are issued. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. In the District-wide and fund financial statements, issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. To conform to generally accepted accounting principles, bond issuance costs should be amortized over the life of the bonds on the District-wide statements. The effect of this deviation is deemed to be immaterial to the fair presentation of the basic financial statements. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the Statement of Net Position. \nNET POSITION \nThe School District's net position in the District-wide Statements is classified as follows: \nNet investment in capital assets - This represents the School District's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of net investment in capital assets. \nRestricted net position - This represents resources for which the School District is legally or contractually obligated to spend resources for continuation of Federal programs, debt service and capital projects in accordance with restrictions imposed by external third parties. \nUnrestricted net position - Unrestricted net position represents 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. \nFUND BALANCES \nThe School District's fund balances are classified as follows: \nNonspendable  Amounts that cannot be spent either because they are in a nonspendable form or because they are legally or contractually required to be maintained intact. \nRestricted  Constraints are placed on the use of resources are either (1) externally imposed conditions by creditors, grantors, contributors, or laws and regulations of other governments or (2) imposed by law through constitutional provisions or enabling legislation. \nCommitted  Amounts that can be used only for specific purposes pursuant to constraints imposed by formal action of the Board of Education. The Board of Education is the School District's highest level of decision-making authority, and the formal action that is required to be taken to establish, \n \n- 14 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2013 \n \nEXHIBIT \"H\" \n \nmodify, or rescind a fund balance commitment is a resolution approved by the Board. Committed fund balance also should incorporate contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements. \nAssigned  Amounts that are constrained by the School District's intent to be used for specific purposes, but are neither restricted nor committed. The intent should be expressed by (1) the Board of Education or (2) the budget or finance committee, or the Superintendent, or designee, to assign amounts to be used for specific purposes. \n \nUnassigned  The residual classification for the General Fund. This classification represents fund balances that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the General Fund. \n \nFund Balances of the Governmental Funds at June 30, 2013, are as follows: \n \nNonspendable Inventories Prepaid Assets \nRestricted Continuation of Federal Programs Capital Projects Debt Service \nCommitted School Activity Accounts \nUnassigned \n \n$ \n \n69,107.72 \n \n1,537.50 $ \n \n70,645.22 \n \n$ \n \n523,249.48 \n \n4,298,427.16 \n \n1,077,337.70 \n \n5,899,014.34 \n \n433,464.91 2,953,478.50 \n \nFund Balance, June 30, 2013 \n \n$ 9,356,602.97 \n \nIt is the goal of the School District to achieve and maintain a committed, assigned, and unassigned fund balance in the general fund at fiscal year end of not less than 5% of revenues, not to exceed 15% of the total budget of the subsequent fiscal year, in compliance with Official Code of Georgia Annotated Section 20-2-167(a)5. If the unassigned fund balance at fiscal year end falls below the goal, the School District shall develop a restoration plan to achieve and maintain the minimum fund balance. \n \nWhen multiple categories of fund balance are available for expenditure, the School District will start with the most restricted category and spend those funds first before moving down to the next category with available funds. \n \nUSE OF ESTIMATES \n \nThe 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. \n \nNote 3: BUDGETARY DATA \nThe budget is a complete financial plan for the School District's fiscal year, and is based upon careful estimates of expenditures together with probable funding sources. The budget is legally adopted each year for the general, debt service, and capital projects funds. There is no statutory prohibition \n \n- 15 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2013 \n \nEXHIBIT \"H\" \n \nregarding over expenditure of the budget at any level. The budget for all governmental funds, except the various school activity (principal) accounts, is prepared and adopted by fund and function. The legal level of budgetary control was established by the Board at the aggregate function level. The budget for the General Fund was prepared in accordance with accounting principles generally accepted in the United States of America. \nThe budgetary process begins with the School District's administration presenting an initial budget for the Board's review. The administration makes revisions as necessary based on the Board's guidelines and a tentative budget is approved. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality, as well as the School District's website. At the next regularly scheduled meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final budget. The approved budget is then submitted, in accordance with provisions of Official Code of Georgia Annotated section 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end. \nOnly the Board is authorized to approve adjustments to the approved budget for revenue or expenditure changes in any budget function for any fund. \nSee Schedule 1  General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances  Budget to Actual for a detail of any over/under expenditures during the fiscal year 2013. \nNote 4: DEPOSITS AND INVESTMENTS \nCOLLATERALIZATION OF DEPOSITS \nOfficial 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 110 percent of the daily pool balance. \nAcceptable security for deposits consists of any one of or any combination of the following: \n(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, \n(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, \n(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia, \n(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, \n(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, \n \n- 16 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2013 \n \nEXHIBIT \"H\" \n \n(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and \n(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. \nCATEGORIZATION OF DEPOSITS \nCustodial 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, 2013, the bank balances were $5,061,052.44. The bank balances were entirely covered by Federal depository insurance or collateralized with securities held by the pledging financial institution or its agent in the School District's name. \nCATEGORIZATION OF INVESTMENTS \nAt June 30, 2013, the carrying value of the School District's total investments was $7,166,084.02, which is materially the same as fair value. This investment consisted entirely of funds invested in the Georgia Fund 1, formerly referred to as LGIP, administered by the State of Georgia, Office of the State Treasurer which is not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office of the State Treasurer for the Georgia Fund 1 (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. Additional information on the Georgia Fund 1 is disclosed in the State of Georgia Comprehensive Annual Financial Report. This audit can be obtained from the Georgia Department of Audits and Accounts at www.audits.ga.gov/SGD/CAFR.html. \nThe Primary Liquidity Portfolio consists of Georgia Fund 1 which is not registered with the SEC as an investment company but does operate in a manner consistent with the SEC's Rule 2a-7 of the Investment Company Act of 1940. The investment is valued at the pool's share price, $1.00 per share. The pool is an AAAm rated investment pool by Standard and Poor's. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2013, was 43 days. \nNote 5: NON-MONETARY TRANSACTIONS \nThe School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 2 - Inventories \n \n- 17 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2013 \n \nEXHIBIT \"H\" \n \nNote 6: CAPITAL ASSETS The following is a summary of changes in the Capital Assets during the fiscal year: \n \nGovernmental Activities Capital Assets, Not Being Depreciated: \nLand Construction Work In Progress \n \nBalances July 1, 2012 \n \nIncreases \n \nDecreases \n \nBalances June 30, 2013 \n \n$ 1,338,157.39 $ \n \n32,284.00 $ \n \n851,980.42 \n \n7,138,621.85 \n \n0.00 $ \n \n1,370,441.39 7,990,602.27 \n \nTotal Capital Assets, Not Being Depreciated $ 2,190,137.81 $ 7,170,905.85 $ \n \n0.00 $ 9,361,043.66 \n \nCapital Assets, Being Depreciated: Buildings and Improvements Equipment Land Improvements Intangible Assets \n \n$ 50,113,066.70 5,370,266.98 7,675,786.19 105,379.62 \n \n$ \n \n0.00 $ 50,113,066.70 \n \n5,370,266.98 \n \n7,675,786.19 \n \n105,379.62 \n \nLess: Accumulated Depreciation: Buildings and Improvements Equipment Land Improvements Intangible Assets \n \n8,183,741.55 $ 3,282,353.00 \n773,652.51 49,205.92 \n \n650,257.64 268,207.95 109,178.05 \n10,537.95 \n \n8,833,999.19 3,550,560.95 \n882,830.56 59,743.87 \n \nTotal Capital Assets, Being Depreciated, Net $ 50,975,546.51 $ -1,038,181.59 $ \n \n0.00 $ 49,937,364.92 \n \nGovernmental Activity Capital Assets - Net $ 53,165,684.32 $ 6,132,724.26 $ \n \n0.00 $ 59,298,408.58 \n \nCurrent year depreciation expense by function is as follows: \n \nInstruction Support Services \nEducational Media Services School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Food Services \n \n$ \n \n$ \n \n17,500.48 \n \n53,103.75 \n \n10,537.95 \n \n10,706.27 \n \n194,674.74 \n \n$ \n \n704,096.98 \n286,523.19 47,561.42 \n1,038,181.59 \n \n- 18 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2013 \n \nEXHIBIT \"H\" \n \nNote 7: INTERFUND ASSETS AND LIABILITIES \nDue to and due from other funds are recorded for interfund receivables and payables which arise from interfund transactions. Interfund balances at June 30, 2013, consisted of the following: \n \nDue From Other Funds \n \nDue To Other Funds \n \nGeneral Fund District-wide Capital Projects \n \n$ 1,394,789.57 $ 1,394,789.57 \n \n$ 1,394,789.57 $ 1,394,789.57 \n \nDuring fiscal year 2013, the General Fund paid $1,394,789.57 for capital outlay expenditures for cash flow purposes to be reimbursed from the Capital Projects Funds in fiscal year 2014 when Georgia State Financing and Investment Commission (GSFIC) reimbursements are received. \n \nNote 8: INTERFUND TRANSFERS \n \nInterfund transfers for the year ended June 30, 2013, consisted of the following: \n \nTransfer to \n \nTransfers From \nDistrict-wide Capital Projects \n \nDebt Service Fund \n \n$ 1,065,728.89 \n \nTransfers were used to (1) move amounts derived from Series 2012 bond proceeds from the Capital Projects Fund to the Debt Service Fund for payment of capitalized interest on the Series 2012 bond debt as authorized by a referendum approved by the voters and (2) to transfer Series 2006/2007 unspent bond funds to retire Series 2006/2007 bond debt as allowed by O.C.G.A. 20-2-560. All Series 2006/2007 bond projects were completed during fiscal year 2012. \n \nNote 9: RISK MANAGEMENT \n \nThe 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. \n \nThe School District participates in the Georgia School Boards Association Risk and Insurance Management System, a public entity risk pool organized on July 1, 1994, to develop and administer a plan to reduce risk of loss on account of general liability, motor vehicle liability, or property damage, including safety engineering and other loss prevention and control techniques, and to administer one or more groups of self-insurance funds, including the processing and defense of claims brought against members of the system. The School District pays an annual premium to the system for its general insurance coverage. Additional coverage is provided through agreements by the system with other companies according to their specialty for property, boiler and machinery (including coverage for flood and earthquake), general liability (including coverage for sexual harassment, molestation and abuse), errors and omissions, crime and automobile risks. Payment of excess insurance for the system varies by line of coverage. \n \n- 19 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2013 \n \nEXHIBIT \"H\" \n \nThe School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the General Fund with expenses/expenditures and the related liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. \n \nChanges in the unemployment compensation claims liability during the last two fiscal years are as follows: \n \nClaims and \n \nBeginning of Year \n \nChanges in \n \nClaims \n \nEnd of Year \n \nLiability \n \nEstimates \n \nPaid \n \nLiability \n \n2012 $ 2013 $ \n \n0.00 $ 0.00 $ \n \n21,246.00 $ 44,014.82 $ \n \n21,246.00 $ 44,014.82 $ \n \n0.00 0.00 \n \nThe School District participates in the Georgia School Boards Association Workers' Compensation Fund, a public entity risk pool organized on July 1, 1992, 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 Fund for its Workers' Compensation insurance coverage. Excess insurance coverage is provided through an agreement by the Fund with the Safety National Casualty Corporation to provide coverage for potential losses sustained by the Fund in excess of $550 thousand loss per occurrence, up to the statutory limit. Employers' Liability insurance coverage is also provided by Safety National Casualty Corporation to provide coverage for potential losses sustained by the Fund in excess of $550 thousand loss per occurrence, up to $2 million. \n \nThe School District has purchased a surety bond to provide additional insurance coverage as follows: \n \nPosition Covered Superintendent \nNote 10: LONG-TERM DEBT GENERAL OBLIGATION DEBT OUTSTANDING General Obligation Bonds currently outstanding are as follows: \n \nAmount \n \n$ \n \n100,000.00 \n \nPurpose \n \nInterest Rates \n \nAmount \n \nGeneral Government - Series 2012 \n \n3.00% - 5.00% \n \n$ 12,120,000.00 \n \nVoters have authorized $2,880,000.00 in general obligation debt for capital outlay which was not issued as of June 30, 2013. \n \n- 20 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2013 \n \nEXHIBIT \"H\" \n \nThe changes in Long-Term Debt during the fiscal year ended June 30, 2013, were as follows: \n \nBalance July 1, 2012 \n \nAdditions \n \nGovernmental Activities \n \nBalance \n \nDeductions \n \nJune 30, 2013 \n \nDue Within One Year \n \nG. O. Bonds \n \n$ 4,950,000.00 $ 12,120,000.00 $ 4,950,000.00 $ 12,120,000.00 $ 2,200,000.00 \n \nUnamortized Bond Premiums \n \n0.00 \n \n1,354,523.30 \n \n225,753.88 \n \n1,128,769.42 \n \n225,783.88 \n \n$ 4,950,000.00 $ 13,474,523.30 $ 5,175,753.88 $ 13,248,769.42 $ 2,425,783.88 \n \nAt June 30, 2013, payments due by fiscal year which includes principal and interest for these items are as follows: \n \nGeneral Obligation Debt \n \nUnamortized \n \nPrincipal \n \nInterest \n \nBond Premium \n \nFiscal Year Ended June 30: \n \n2014 2015 2016 2017 2018 \n \n$ \n \n2,200,000.00 $ \n \n2,400,000.00 \n \n2,600,000.00 \n \n2,550,000.00 \n \n2,370,000.00 \n \n507,775.00 $ 441,775.00 345,775.00 215,775.00 \n88,275.00 \n \n225,753.88 225,753.88 225,753.88 225,753.88 225,753.90 \n \nTotal Principal and Interest \n \n$ 12,120,000.00 $ \n \n1,599,375.00 $ \n \n1,128,769.42 \n \nNote 11: ON-BEHALF PAYMENTS \n \nThe School District has recognized revenues and costs in the amount of $2,108,850.57 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies. \n \nGeorgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Certificated Personnel In the amount of $2,005,296.00 \n \nPaid to the Teachers' Retirement System of Georgia For Teachers' Retirement System (TRS) Employer's Cost In the amount of $20,298.57 \n \nOffice of State Treasurer Paid to the Public School Employees' Retirement System For Public School Employees' Retirement (PSERS) Employer's Cost In the amount of $83,256.00 \n \nFunds paid to the Georgia Department of Community Health by the Georgia Department of Education on behalf of the School District are reported as part of the Quality Basic Education revenue allotments on Schedule 3  Schedule of State Revenue. \n \n- 21 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2013 \n \nEXHIBIT \"H\" \n \nNote 12: SIGNIFICANT COMMITMENTS \n \nThe following is an analysis of significant outstanding construction or renovation contracts executed by the School District as of June 30, 2013, together with funding available: \n \nProject \n \nUnearned Executed Contracts \n \nFunding Available From State \n \nNew High School and Administration Building \n \n$ \n \n7,157,305.61 $ \n \n3,137,200.00 \n \nThe amount shown above as available from the State has been reduced by $3,784,158.00 as the School District recorded a receivable from the State for this amount on the Fund Financial Statements. However, revenue was not recognized on the Fund Financial Statements as the amount was not considered \"available\" as it was not received within 120 days of fiscal year end. \nThe amounts shown above as Unearned Executed Contracts and Funding Available from the State are not reflected in the basic financial statements. \nNote 13: SIGNIFICANT CONTINGENT LIABILITIES \nAmounts 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. \nThe School District is a defendant in various legal proceedings pertaining to 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. \nNote 14: POST-EMPLOYMENT BENEFITS \nGeorgia School Personnel Post-employment Health Benefit Fund \nPlan 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 Fund provides health insurance benefits to eligible former employees and their qualified beneficiaries through the State Employees Health Benefit Plan administered by the Department of Community Health. The Official Code of Georgia Annotated (O.C.G.A.) 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). The Department of Community Health, which includes the School OPEB Fund, issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts. \nFunding 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. For members with fewer than five years of service as of January 1, 2012, contributions also vary based on years of service. On average, members with five years or more of service as of January 1, 2012, pay approximately \n- 22 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2013 \n \nEXHIBIT \"H\" \n \n25 percent of the cost of the health insurance coverage. In accordance with the Board resolution dated December 8, 2011, for members with fewer than five years of service as of January 1, 2012, the State provides a premium subsidy in retirement that ranges from 0% for fewer than 10 years of service to 75% (but no greater than the subsidy percentage offered to active employees) for 30 or more years of service. The subsidy for eligible dependents ranges from 0% to 55% (but no greater than the subsidy percentage offered to dependents of active employees minus 20%). No subsidy is available to Medicare eligible members not enrolled in a Medicare Advantage Option. The Board of Community Health sets all member premiums by resolution and in accordance with the law and applicable revenue and expense projections. Any subsidy policy adopted by the Board may be changed at any time by Board resolution and does not constitute a contract or promise of any amount of subsidy. \nParticipating 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. \nThe 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, 2013: \n \nFor certificated teachers, librarians and regional educational service agencies and certain other eligible participants: \n \nJuly 2012 - February 2013 March 2013 - June 2013 \n \n$912.34 per member per month $937.34 per member per month \n \nFor non-certificated school personnel: \n \nJuly 2012 - June 2013 \n \n$446.20 per member per month \n \nNo additional contribution was required by the Board for fiscal year 2013 nor contributed to the School OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the School plan for other post-employment benefits and are subject to appropriation. \n \nThe School District's combined active and retiree contributions to the health insurance plans, which equaled the required contribution, for the current fiscal year and the preceding two fiscal years were as follows: \n \nFiscal Year \n \nPercentage Contributed \n \nRequired Contribution \n \n2013 2012 2011 \n \n100% 100% 100% \n \n$ \n \n3,382,388.32 \n \n$ \n \n3,506,248.56 \n \n$ \n \n3,217,896.09 \n \n- 23 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2013 \n \nEXHIBIT \"H\" \n \nNote 15: RETIREMENT PLANS \n \nTEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) \nPlan 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. \nOn 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. \nTRS 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 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service. \nNormal 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 40 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 30 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. \nFunding Policy. TRS is funded by member and employer contributions as adopted and amended by the Board of Trustees. Members become fully vested after 10 years of service. If a member terminates with less than 10 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, 2013, were 6.00% of annual salary. Employer contributions required for fiscal year 2013 were 11.41% of annual salary as required by the June 30, 2010, actuarial valuation. The employer contribution rate will increase to 12.28% effective July 1, 2013. \nEmployer contributions for the current fiscal year and the preceding two fiscal years are as follows: \n \nFiscal Year \n \nPercentage Contributed \n \nRequired Contribution \n \n2013 2012 2011 \n \n100% 100% 100% \n \n$ \n \n1,955,178.40 \n \n$ \n \n1,835,658.64 \n \n$ \n \n1,887,110.62 \n \n- 24 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2013 \n \nEXHIBIT \"H\" \n \nPUBLIC SCHOOL EMPLOYEES' RETIREMENT SYSTEM (PSERS) \n \nBus drivers, lunchroom personnel, and maintenance and custodial personnel are members of the Public School Employees' Retirement System of Georgia. The System is funded by contributions by the employees and by the State of Georgia. The School District makes no contribution to this plan. \n \nDEFINED CONTRIBUTION PLAN \nThe Franklin County Board of Education maintains an employer paid 403(b) annuity plan for the group of employees covered under the Public School Employees' Retirement System (PSERS). Recognizing that PSERS was a limited defined contribution and defined benefit plan which did not provide for an adequate retirement for this group of employees, it was the Board's desire to supplement the retirement of this group. \nThe Board selected Lincoln as the provider of this plan. For each employee covered under PSERS, the Board contributes to the plan an amount equal to the amount contributed by the employee not to exceed $25.00 per employee per month. \n \nThe employee becomes vested in the plan with 5 years of experience. Employees who had already achieved 5 years of experience at the time the plan was implemented were vested upon enrollment. \n \nFunds accumulated in the employer paid accounts are only available to the employee upon termination of employment and 5 years of service to Franklin County Board of Education. If an employee terminates employment prior to achieving 5 years of service, funds paid on behalf of the non-vested employee are credited back to the Board. Funds are vested at 20% per year of service. \n \nThe provider for the plan has not changed since its inception. Employer contributions for the current fiscal year and the preceding two fiscal years are as follows: \n \nFiscal Year \n \nPercentage Contributed \n \nRequired Contribution \n \n2013 2012 2011 \n \n100% \n \n$ \n \n14,520.00 \n \n100% \n \n$ \n \n18,745.00 \n \n100% \n \n$ \n \n19,315.00 \n \n- 25 - \n \n (This page left intentionally blank) \n \n FRANKLIN COUNTY BOARD OF EDUCATION GENERAL FUND \nSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL \nYEAR ENDED JUNE 30, 2013 \n \nSCHEDULE \"1\" \n \nREVENUES \nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous \nTotal Revenues \nEXPENDITURES \nCurrent 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 Food Services Operation \nTotal Expenditures \nExcess of Revenues over (under) Expenditures \nOTHER FINANCING SOURCES \nOther Sources \nNet Change in Fund Balances \nFund Balances - Beginning \nAdjustments \nFund Balances - Ending \n \nNONAPPROPRIATED BUDGETS \n \nORIGINAL (1) \n \nFINAL (1) \n \nACTUAL AMOUNTS \n \nVARIANCE OVER/UNDER \n \n$ 9,174,599.00 $ 9,174,599.00 $ 9,180,787.50 $ \n \n161,390.73 \n \n16,917,671.00 17,016,714.00 17,282,363.99 \n \n3,379,188.00 \n \n4,077,076.00 \n \n3,763,731.24 \n \n495,000.00 \n \n495,000.00 \n \n581,166.92 \n \n37,100.00 \n \n37,100.00 \n \n16,862.53 \n \n88,194.00 \n \n106,194.00 \n \n1,095,819.66 \n \n6,188.50 161,390.73 265,649.99 -313,344.76 \n86,166.92 -20,237.47 989,625.66 \n \n$ 30,091,752.00 $ 30,906,683.00 $ 32,082,122.57 $ 1,175,439.57 \n \n$ 19,774,321.08 $ 19,903,446.88 $ 19,919,212.27 $ -15,765.39 \n \n1,034,107.80 1,261,771.83 \n512,976.98 397,502.54 1,894,126.28 143,029.99 2,129,351.38 1,892,889.00 \n233,617.00 \n1,613,780.63 \n \n1,016,034.43 1,502,712.06 \n513,302.49 401,227.54 1,900,623.72 226,739.24 2,159,295.86 1,929,562.54 \n234,617.00 \n1,613,780.63 \n \n1,085,593.71 1,370,201.97 \n459,850.07 405,724.03 1,877,794.66 213,057.31 2,170,102.16 1,785,793.47 \n879.42 230,968.65 417,898.81 1,507,559.33 \n \n-69,559.28 132,510.09 \n53,452.42 -4,496.49 22,829.06 13,681.93 -10,806.30 143,769.07 \n-879.42 3,648.35 -417,898.81 106,221.30 \n \n$ 30,887,474.51 $ 31,401,342.39 $ 31,444,635.86 $ -43,293.47 \n \n$ -795,722.51 $ -494,659.39 $ 637,486.71 $ 1,132,146.10 \n \n87,048.00 \n \n87,048.00 \n \n-87,048.00 \n \n$ -708,674.51 $ -407,611.39 $ 637,486.71 $ 1,045,098.10 \n \n2,754,773.17 \n \n3,290,193.72 \n \n3,341,813.90 \n \n51,620.18 \n \n32,793.21 \n \n46,306.75 \n \n-46,306.75 \n \n$ 2,078,891.87 $ 2,928,889.08 $ 3,979,300.61 $ 1,050,411.53 \n \nNotes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual \n(1) Original and Final Budget amounts do not include the budgeted revenues or expenditures of the various principal accounts. The actual revenues and expenditures of the various principal accounts are $759,710.14 and $764,819.61, respectively. \nThe accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements. \n \nSee notes to the basic financial statements. \n \n- 27 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \nYEAR ENDED JUNE 30, 2013 \n \nSCHEDULE \"2\" \n \nFUNDING AGENCY PROGRAM/GRANT \nAgriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program \nTotal U. S. Department of Agriculture \nEducation, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Special Education Grants to States Preschool Grants \nTotal Special Education Cluster \nTitle I, Part A Cluster Pass-Through From Georgia Department of Education Title I Grants to Local Educational Agencies \nOther Programs Pass-Through From Georgia Department of Education Career and Technical Education - Basic Grants to States Education Jobs Fund English Language Acquisition Grants Improving Teacher Quality State Grants Migrant Education - State Grant Program Rural Education \nTotal Other Programs \nTotal U. S. Department of Education \n \nCFDA NUMBER \n \nPASSTHROUGH \nENTITY ID \nNUMBER \n \nEXPENDITURES IN PERIOD \n \n* 10.553 * 10.555 \n \nN/A \n \n(2) \n \nN/A $ 1,458,209.33 (1) \n \n$ 1,458,209.33 \n \n* 84.027 * 84.173 \n \nN/A $ 939,152.53 \n \nN/A \n \n47,253.34 \n \n$ 986,405.87 \n \n84.010 \n \nN/A $ 1,232,625.36 \n \n84.048 84.410 84.365 84.367 84.011 84.358 \n \nN/A $ \n \n34,077.00 \n \nN/A \n \n1,509.00 \n \nN/A \n \n12,376.00 \n \nN/A \n \n137,751.50 \n \nN/A \n \n27,484.65 \n \nN/A \n \n94,317.12 \n \n$ 307,515.27 \n \n$ 2,526,546.50 \n \nTotal Expenditures of Federal Awards \n \n$ 3,984,755.83 \n \nN/A = Not Available \n \nNotes to the Schedule of Expenditures of Federal Awards \n \n(1) Includes the Federally assigned value of donated commodities for the Food Donation Program in the amount of $132,186.56. \n(2) Expenditures for the funds earned on the School Breakfast Program (237,800.83) were not maintained separately and are included in the 2013 National School Lunch Program. \n \nMajor Programs are identified by an asterisk (*) in front of the CFDA number. \n \nThe School District did not provide Federal Assistance to any Subrecipient. \n \nThe accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Franklin County Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements. \n \nSee notes to the basic financial statements. \n \n- 28 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2013 \nAGENCY/FUNDING \nGRANTS Education, Georgia Department of Quality Basic Education (1) Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades - Early Intervention (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program 20 Days Additional Instruction Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Amended Formula Adjustment Categorical Grants Pupil Transportation Regular Nursing Services Vocational Supervisors Education Equalization Funding Grant Other State Programs Food Services Math and Science Supplements Move on When Ready Preschool Handicapped Program Teachers' Retirement Vocational Education \nHuman Resources, Georgia Department of Family Connection \nOffice of the State Treasurer Public School Employees' Retirement \n \n(1) Payments to the Georgia Department of Community Health by the Georgia Department of Education on behalf of the School District in the amount of $2,005,296.00 are included as part of the Quality Basic Education revenue allotments above. \n \nSee notes to the basic financial statements. \n \n- 29 - \n \nSCHEDULE \"3\" \nGOVERNMENTAL FUND TYPE GENERAL FUND \n$ 1,108,800.00 280,974.00 \n2,346,036.00 912,024.00 \n1,377,582.00 270,055.00 \n2,427,972.00 1,949,210.00 \n773,040.00 2,810,366.00 \n558,858.00 333,205.00 189,778.00 134,012.00 417,914.00 129,409.00 \n76,627.00 \n575,757.00 891,836.00 932,531.00 -2,856,901.00 \n598,986.50 70,331.00 14,062.00 \n470,045.00 \n49,350.00 50,131.41 \n100.00 85,167.00 20,298.57 157,856.00 \n43,695.51 \n83,256.00 \n$ 17,282,363.99 \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \nYEAR ENDED JUNE 30, 2013 \n \nSCHEDULE \"4\" \n \nPROJECT \n \nORIGINAL ESTIMATED \nCOST (1) \n \nCURRENT ESTIMATED COSTS (2) \n \nAMOUNT EXPENDED IN CURRENT YEAR (3) (4) (5) \n \nAMOUNT EXPENDED IN PRIOR YEARS (3) (4) (5) \n \nTOTAL COMPLETION \nCOST \n \nEXCESS PROCEEDS NOT \nEXPENDED \n \nESTIMATED COMPLETION \nDATE \n \ni) Acquiring, constructing, and equipping replacement school \n \nbuildings at Franklin County High School, \n \n$ 16,300,000.00 $ 16,300,000.00 $ 7,140,737.77 $ \n \nii) adding to, renovating, repairing, improving, acquiring and equipping school buildings and school system facilities; \n \n500,000.00 \n \n500,000.00 \n \n43,041.86 \n \n0.00 \n \nJune 30, 2018 June 30, 2018 \n \niii) acquiring miscellaneous new equipment, fixtures and furnishings for the school system, including computer technology equipment, computer software, school buses and other vehicles, transportation and maintenance equipment, and security and safety equipment; \niv) acquiring land or improving land for new or existing schools; \nv) acquiring textbooks, e-books, and e-book readers for the school system; \nvi) paying a portion of the payments, including principal and interest , due on the School District's Series 2006 and 2007 Bonds with a maximum payment amount of $1,700,000, with the maximum cost of the projects described in items (i)-(vi) payable from said tax being $20,000,000. \n \n1,300,000.00 1,300,000.00 \n \n100,000.00 \n \n100,000.00 \n \n400,000.00 \n \n400,000.00 \n \n1,700,000.00 1,400,000.00 \n \n784,968.96 227,097.58 \n \nJune 30, 2018 June 30, 2018 June 30, 2018 \nJune 30, 2018 \n \n$ 20,300,000.00 $ 20,000,000.00 $ 8,195,846.17 $ \n \n0.00 \n \n(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax. \n \n(2) The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion. \n \n(3) The voters of Franklin County approved the imposition of a 1% sales tax to fund the above projects and retire associated debt. Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the projects. \n \n(4) In addition to the expenditures shown above, the School District has incurred interest to provide advance funding for the above projects as follows: \n \nPrior Years \n \n$ \n \n0.00 \n \nCurrent Year \n \n324,411.81 \n \nTotal \n \n$ 324,411.81 \n \n(5) In addition to the expenditures shown above, the School District has incurred bond issuance costs and related paying agent fees for the above projects as follows: \n \nPrior Years \n \n$ \n \n0.00 \n \nCurrent Year \n \n159,291.14 \n \nTotal \n \n$ 159,291.14 \n \nSee notes to the basic financial statements. \n \n- 30 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) \nALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2013 \n \nSCHEDULE \"5\" \n \nDESCRIPTION \nDirect Instructional Programs Kindergarten Program Kindergarten Program-Early Intervention Program Primary Grades (1-3) Program Primary Grades-Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades-Early Intervention (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Category II Category III Category IV Category V Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) \nTOTAL DIRECT INSTRUCTIONAL PROGRAMS \nMedia Center Program Staff and Professional Development \n \nALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) (2) (3) \n \nELIGIBLE QBE PROGRAM COSTS \n \nSALARIES \n \nOPERATIONS \n \nTOTAL \n \n$ \n \n1,329,755.00 $ \n \n1,557,179.65 $ \n \n14,896.37 $ \n \n1,572,076.02 \n \n296,754.00 \n \n78,098.70 \n \n292.36 \n \n78,391.06 \n \n2,839,143.00 \n \n3,195,041.29 \n \n47,101.55 \n \n3,242,142.84 \n \n967,344.00 \n \n60,369.87 \n \n1,701.53 \n \n62,071.40 \n \n1,608,078.00 \n \n2,031,058.30 \n \n20,075.64 \n \n2,051,133.94 \n \n319,449.00 2,854,840.00 2,288,528.00 \n906,533.00 3,275,399.00 \n672,145.00 374,840.00 223,506.00 150,710.00 \n \n59,413.81 2,825,834.13 2,913,603.35 \n750,191.02 \n102,393.67 454,695.10 1,658,025.08 157,717.10 \n17,871.69 293,493.70 \n126.36 307,048.42 182,380.70 \n \n1,461.13 30,432.92 52,054.77 97,445.46 \n552.66 1,286.26 155,697.99 3,830.90 19,599.40 5,547.40 1,688.24 5,543.76 \n \n60,874.94 2,856,267.05 2,965,658.12 \n847,636.48 \n102,946.33 455,981.36 1,813,723.07 161,548.00 \n37,471.09 299,041.10 \n1,814.60 312,592.18 182,380.70 \n \n$ \n \n18,107,024.00 $ \n \n16,644,541.94 $ \n \n459,208.34 $ 17,103,750.28 \n \n489,443.00 89,843.00 \n \n356,427.35 36,471.04 \n \n34,582.97 49,806.46 \n \n391,010.32 86,277.50 \n \nTOTAL QBE FORMULA FUNDS \n \n$ \n \n18,686,310.00 $ \n \n17,037,440.33 $ \n \n543,597.77 $ 17,581,038.10 \n \n(1) Comprised of State Funds plus Local Five Mill Share. (2) Allotments do not include the impact of the State amended formula adjustment. (3) Allotments do not include the State Health payments made by GDOE to the Department of Community Health for the certified employees. \n \nSee notes to the basic financial statements. \n \n- 31 - \n \n  SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS \n \n  Greg S. Griffin \nSTATE AUDITOR \n(404) 656-2174 \n \nDEPARTMENT OF AUDITS AND ACCOUNTS \n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \nOctober 23, 2014 \n \nHonorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education \nand Superintendent and Members of the Franklin County Board of Education \nINDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS \nLadies and Gentlemen: \nWe have audited, 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, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Franklin County Board of Education as of and for the year ended June 30, 2013, and the related notes to the financial statements, which collectively comprise Franklin County Board of Education's basic financial statements and have issued our report thereon dated October 23, 2014. \nInternal Control Over Financial Reporting \nIn planning and performing our audit of the financial statements, we considered Franklin County Board of Education's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Franklin County Board of Education's internal control. Accordingly, we do not express an opinion on the effectiveness of the Franklin County Board of Education's internal control. \nOur consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as described in the accompanying Schedule of Findings and Questioned Costs, we identified certain deficiencies in internal control over financial reporting that we consider to be material weaknesses. \n \n2013YB-60 \n \n  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. We consider the deficiency described in the accompanying Schedule of Findings and Questioned Costs as item FS-6591-13-01 to be a material weakness. \nCompliance and Other Matters \nAs part of obtaining reasonable assurance about whether Franklin County Board of Education's financial statements are free from 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 an instance of noncompliance or other matters that is required to be reported under Government Auditing Standards and which is described in the accompanying Schedule of Findings and Questioned Costs as item FS-6591-13-02. \nWe also noted certain matters that we have reported to management of Franklin County Board of Education in a separate letter dated October 23, 2014. \nFranklin County Board of Education's Response to Findings \nFranklin County Board of Education's response to the findings identified in our audit is described in the accompanying Schedule of Findings and Questioned Costs. Franklin County Board of Education's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. \nPurpose of this Report \nThe purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. \nRespectfully submitted, \n \nGSG:as 2013YB-60 \n \nGreg S. Griffin State Auditor \n \n  Greg S. Griffin \nSTATE AUDITOR \n(404) 656-2174 \n \nDEPARTMENT OF AUDITS AND ACCOUNTS \n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \nOctober 23, 2014 \n \nHonorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education \nand Superintendent and Members of the Franklin County Board of Education \nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 \nLadies and Gentlemen: \nReport on Compliance for Each Major Federal Program \nWe have audited Franklin County 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, 2013. Franklin County 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. \nManagement's Responsibility \nManagement is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its Federal programs. \nAuditor's Responsibility \nOur responsibility is to express an opinion on compliance for each of Franklin County Board of Education's major Federal programs based on our audit of the types of compliance requirements referred to above. 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 Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Franklin County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. \nWe believe that our audit provides a reasonable basis for our opinion on compliance for each major Federal program. However, our audit does not provide a legal determination of Franklin County Board of Education's compliance. \n2013SA-10 \n \n  Opinion on Each Major Federal Program \nIn our opinion, the Franklin County Board of Education complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major Federal programs for the year ended June 30, 2013. \nReport on Internal Control over Compliance \nManagement of Franklin County Board of Education is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered Franklin County Board of Education's internal control over compliance with the types of requirements that could have a direct and material effect on each major Federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major Federal program 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 Franklin County Board of Education's internal control over compliance. \nA 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 compliance 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. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a Federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. \nOur 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 material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. \nThe purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. \nRespectfully submitted, \n \nGSG:as 2013SA-10 \n \nGreg S. Griffin State Auditor \n \n  SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS \n \n  FRANKLIN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2013 \nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. \n \n  SECTION IV FINDINGS AND QUESTIONED COSTS \n \n  FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2013 \n \nI SUMMARY OF AUDITOR'S RESULTS \n \nFinancial Statements \n \nType of auditor's report issue: Governmental Activities; General Fund; Capital Projects Fund; Debt Service Fund; Aggregate Remaining Fund Information \n \nUnmodified \n \nInternal control over financial reporting:  Material weakness identified?  Significant deficiency identified? \n \nYes None Reported \n \nNoncompliance material to financial statements noted: \n \nYes \n \nFederal Awards \n \nInternal Control over major programs:  Material weakness identified?  Significant deficiency identified? \n \nNo None Reported \n \nType of auditor's report issued on compliance for major programs: All major programs \n \nUnmodified \n \nAny audit findings disclosed that are required to be reported in \n \naccordance with OMB Circular A-133, Section 510(a)? \n \nNo \n \nIdentification of major programs: CFDA Numbers \n \nName of Federal Program or Cluster \n \n10.553, 10.555 84.027, 84.173 \n \nChild Nutrition Cluster Special Education Cluster \n \nDollar threshold used to distinguish between Type A and Type B programs: Auditee qualified as low-risk auditee? \n \n$300,000.00 No \n \n- 1 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2013 \n \nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \n \nFinding Control Number: Control Category: \nInternal Control Impact: Compliance Impact: \n \nFS-6591-13-01 Cash and Cash Equivalents Expenditures/Liabilities/Disbursements Revenues/Receivables/Receipts General Ledger Capital Assets Inadequate Internal Controls Material Weakness None \n \nDescription: The accounting procedures of the School District were insufficient to provide for adequate internal controls at the Central Office. \n \nCriteria: 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. \n \nCondition: Cash and Cash Equivalents \n Bank reconciliations for several accounts were not reconciled in a timely manner. The General Operating account was reconciled for periods of up to six months after the bank statement date. \n Reconciling items for the General Operating account were not investigated and adjusted timely. \n \nExpenditures/Liabilities/Disbursements  A Capital Projects Fund contract payable totaling $489,039.00 was posted to the General Fund. An adjusting entry was proposed by the auditor and accepted by the entity for this material misstatement.  A review of credit card transactions identified several credit card transactions that were missing adequate documentation and proper approval. \n \nRevenues/Receivables/Receipts  An April 2013 receipt, in the amount of $241,725.03, was not posted to the general ledger in a timely manner. \n \nGeneral Ledger  Journal entries were not reviewed by someone independent of the General Ledger posting function. \n \nCapital Assets  The process of identification, valuation and posting of capitalizable assets are performed by one individual, with no review by someone independent of the Capital Asset process.  Documentation supporting the annual physical inventory inspection could not be provided for audit review. \n \n- 2 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2013 \n \nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \n \nCause: In discussing these conditions with the Finance Director, he indicated that a reduction in staff prevented remaining personnel from having time to perform duties of absent employees. Additionally, due to turnover in key management positions, there was a lack of training for newer, inexperienced staff. \n \nEffect or Potential Effect: Errors and/or irregularities may not be detected in a timely manner. \n \nRecommendation: The School District should review accounting procedures in place and design and implement monitoring controls to provide reasonable assurance that transactions are processed according to established controls and also implement procedures to ensure that key accounting functions are separated. \n \nViews of Responsible Officials and Corrective Action Plans: The main operating bank reconciliation was not completed on a timely manner in fiscal year 2013 for several months due to delays from personnel absentees and credit card reconciliations. We made several changes to ensure the bank reconciliations are consistently completed in a timely manner. During fiscal year 2014 we have a different person responsible for the reconciliation who has a low absentee record. Also, we have scheduled a substitute for this person on the day she does the reconciliation so her work is uninterrupted. In addition, we have changed the credit card policy to restrict its use so that it can be reconciled quickly each month and will not hinder the bank reconciliation process. With these corrections, the bank reconciliations are being reconciled timely. \n \nContact Person: Telephone: Fax: Email: \n \nTom Porter, Finance Director (706) 384-4554 (706) 664-0372 tporter@franklin.k12.ga.us \n \nFinding Control Number: Control Category: \nInternal Control Impact: Compliance Impact: \n \nFS-6591-13-02 Cash and Cash Equivalents General Ledger Use of Bond Proceeds in Violation of State Law N/A Material Noncompliance \n \nDescription: The School District did not comply with provisions of Official Code of Georgia Annotated (O.C.G.A.) 20-2-560 by using bond proceeds for a purpose not identified in the bond resolution. \n \nCriteria: O.C.G.A. 20-2-560 states, \"The proceeds of bonds shall be used solely for the payment of the cost of the project or combined project and shall be disbursed upon requisition or order of the chairperson of the authority under such restrictions, if any, as the resolution authorizing the issuance of the bonds...may provide.\" \n \n- 3 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2013 \n \nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \n \nCondition: The School District used $227,097.58 Series 2013 G.O. Bond proceeds to pay debt service requirements on the Series 2006 and Series 2007 G.O. bond debt. The approved bond projects, as identified in the bond resolution, did not include the payment of debt on the previously mentioned bonds. Auditor proposed and the entity accepted an adjusting entry to correct this issue. \n \nQuestion Cost: N/A \n \nCause: In discussing this condition with the Finance Director, he stated that the approved SPLOST referendum projects were confused with approved bond referendum projects when making decisions concerning allowable use of bond proceeds. \n \nEffect: Noncompliance with provisions of Official Code of Georgia Annotated (O.C.G.A.) 20-2-560. \n \nRecommendation: Management of the School District should implement policies that require compliance with State law. \n \nViews of Responsible Officials and Corrective Action Plans: The School District was not aware of O.C.G.A. 20-2-560 concerning the restriction of bond proceeds in this case. An adjustment has been made to comply with this state law. \n \nContact Person: Telephone: Fax: Email: \n \nTom Porter, Finance Director (706) 384-4554 (706) 664-0372 tporter@franklin.k12.ga.us \n \nIII FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \n \nNo matters were reported. \n \n- 4 - \n \n "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-be26-bf8-b2011-h2012-belec-p-btext","title":"Franklin County Board of Education, Carnesville, Georgia, annual financial report for the fiscal year ended June 30, 2012 (including independent auditor's reports)","collection_id":"dlg_ggpd","collection_title":"Georgia Government Publications","dcterms_contributor":["Georgia. Department of Audits and Accounts, issuing body."],"dcterms_spatial":["United States, Georgia, 32.75042, -83.50018"],"dcterms_creator":["Georgia. Department of Audits and Accounts"],"dc_date":["2012-06-30"],"dcterms_description":["Began with fiscal year ended June 30, 2009.","Report year covers fiscal year.","Fiscal year ended June 30, 2014 (online surrogate) (Received via FTP 1/14/16 from Georgia Dept. of Audits and Accounts); title from PDF cover (Georgia Government Publications database, viewed February 24, 2023).","Fiscal year ended June 30, 2019 (online surrogate) (Georgia Government Publications database, viewed February 24, 2023)."],"dc_format":["application/pdf"],"dcterms_identifier":null,"dcterms_language":["eng"],"dcterms_publisher":["Atlanta, Ga. : Georgia. Department of Audits and Accounts"],"dc_relation":null,"dc_right":["http://rightsstatements.org/vocab/InC/1.0/"],"dcterms_is_part_of":null,"dcterms_subject":["Franklin County Board of Education (Ga.)--Appropriations and expenditures--Periodicals","Education--Georgia--Franklin County--Auditing--Periodicals","Education--Georgia--Franklin County--Finance--Statistics--Periodicals"],"dcterms_title":["Franklin County Board of Education, Carnesville, Georgia, annual financial report for the fiscal year ended June 30, 2012 (including independent auditor's reports)"],"dcterms_type":["Text"],"dcterms_provenance":["University of Georgia. Map and Government Information Library"],"edm_is_shown_by":["https://dlg.galileo.usg.edu/do:dlg_ggpd_y-ga-ba800-b-pr1-be26-bf8-b2011-h2012-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-be26-bf8-b2011-h2012-belec-p-btext"],"dcterms_temporal":null,"dcterms_rights_holder":["\u0026copy; Georgia Department of Audits"],"dcterms_bibliographic_citation":null,"dlg_local_right":null,"dcterms_medium":["annual reports","state government records","audits","financial records","financial statements"],"dcterms_extent":null,"dlg_subject_personal":null,"iiif_manifest_url_ss":null,"dcterms_subject_fast":null,"fulltext":"FRANKLIN COUNTY BOARD OF EDUCATION \nCARNESVILLE, GEORGIA \nANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2012 \n(Including Independent Auditor's Reports) \n \n FRANKLIN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \n \nSECTION I \n \nFINANCIAL \n \nINDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \n \nREQUIRED SUPPLEMENTARY INFORMATION \n \nMANAGEMENT'S DISCUSSION AND ANALYSIS \n \nEXHIBITS \n \nBASIC FINANCIAL STATEMENTS \n \nDISTRICT-WIDE FINANCIAL STATEMENTS \n \nA \n \nSTATEMENT OF NET ASSETS \n \nB \n \nSTATEMENT OF ACTIVITIES \n \nFUND FINANCIAL STATEMENTS \n \nC \n \nBALANCE SHEET \n \nGOVERNMENTAL FUNDS \n \nD \n \nRECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \n \nTO THE STATEMENT OF NET ASSETS \n \nE \n \nSTATEMENT OF REVENUES, EXPENDITURES AND CHANGES \n \nIN FUND BALANCES \n \nGOVERNMENTAL FUNDS \n \nF \n \nRECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT \n \nOF REVENUES, EXPENDITURES AND CHANGES IN FUND \n \nBALANCES TO THE STATEMENT OF ACTIVITIES \n \nG \n \nSTATEMENT OF FIDUCIARY NET ASSETS \n \nFIDUCIARY FUNDS \n \nH \n \nNOTES TO THE BASIC FINANCIAL STATEMENTS \n \nSCHEDULES \n \nREQUIRED SUPPLEMENTARY INFORMATION \n \n1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND \n \nPage \ni \n1 2 4 5 6 7 9 10 \n27 \n \n  FRANKLIN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \n \nSECTION I \nFINANCIAL \nSCHEDULES \nSUPPLEMENTARY INFORMATION \n2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 3 SCHEDULE OF STATE REVENUE 4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 5 ALLOTMENTS AND EXPENDITURES \nGENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) BY PROGRAM \n \nPage \n28 29 30 31 \n \nSECTION II \nCOMPLIANCE AND INTERNAL CONTROL REPORTS \nINDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS \nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 \n \nSECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS \n \nSECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS \n \n  SECTION I FINANCIAL \n \n  Greg S. Griffin \nSTATE AUDITOR \n(404) 656-2174 \n \nDEPARTMENT OF AUDITS AND ACCOUNTS \n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \nJune 27, 2013 \n \nHonorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education \nand Superintendent and Members of the Franklin County Board of Education \nINDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \nLadies and Gentlemen: \nWe have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information (Exhibits A through H) of the Franklin County Board of Education, as of and for the year ended June 30, 2012, which collectively comprise the Board's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Franklin County Board of Education's management. Our responsibility is to express opinions on these financial statements based on our audit. \nWe 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. 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 consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Board's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. \nIn 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 Franklin County Board of Education, as of June 30, 2012, 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. \n \n2012ARL-11 \n \n  In accordance with Government Auditing Standards, we have also issued our report dated June 27, 2013, on our consideration of the Franklin County 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 Auditing Standards and should be considered in assessing the results of our audit. \nManagement's Discussion and Analysis and the Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on pages i through x and 27 respectively, are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. 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 regarding 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 our 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. \nOur audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Franklin County 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-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the financial statements. The accompanying supplementary information is the responsibility of management and was derived from and relates 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 basic 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 basic financial statements as a whole. \nA 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. \nRespectfully submitted, \n \nGSG:as 2012ARL-11 \n \nGreg S. Griffin State Auditor \n \n  FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 \n \nINTRODUCTION \nThe School District's financial statements for the fiscal year ended June 30, 2012, includes a series of basic financial statements that report financial information for the School District as a whole, its funds, and its fiduciary responsibilities. The Statement of Net Assets and the Statement of Activities provide financial information about all of the School District's activities and present both a short-term and long-term view of the School District's finances on a global basis. The fund financial statements provide information about all of the School District's funds. Information about these funds, such as the School District's General Fund, is important in its own right, but will also give insight into the School District's overall soundness as reported in the Statement of Net Assets and the Statement of Activities. \nFINANCIAL HIGHLIGHTS \nKey financial highlights for fiscal year 2012 are as follows: \nOn the District-wide financial statements: \n District-wide net assets at June 30, 2012, were $53.9 million. Net assets reflect the difference between all assets of the School District (including capital assets, net of depreciation) and all liabilities, both short term and long term. The net assets at June 30, 2012, of $53.9 million represented an increase of $1.6 million in net assets when compared to the prior year. \n The School District had $33.3 million in expenses relating to governmental activities; about $20.7 million of these expenses were offset by program specific charges for services, grants and contributions. However, general revenues (primarily property and sales taxes) of $14.2 million were adequate to provide for these programs. \n As stated above, general revenues accounted for $14.2 million or about 41% of all revenues totaling $34.9 million. Program specific revenues in the form of charges for services, grants, and contributions accounted for the balance of these revenues. \n \nSource of Revenues \nProgram Revenues \n58.8% \n \nGeneral Revenue - Property Taxes \n26.6% \nGeneral Revenue - Sales Taxes 9.9% \n \nGeneral Revenue - All Other 4.7% \n \ni \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 \nOn the fund financial statements: \n Among major funds, the General Fund had $31.7 million in revenues and almost $32.1 million in expenditures. The General Fund balance of $3.3 million at June 30, 2012, decreased by roughly $400,000 from the prior year. \nOVERVIEW OF THE FINANCIAL STATEMENTS \nThese financial statements consists of three parts; management's discussion and analysis (this section), the basic financial statements including notes to the financial statements and required supplementary information. The basic financial statements include two levels of statements that present different views of the School District. These include the District-wide and fund financial statements. \nThe District-wide financial statements include the 'Statement of Net Assets' and 'Statement of Activities'. These statements provide information about the activities of the School District presenting both short-term and long-term information about the School District's overall financial status. \nThe fund financial statements focus on individual parts of the School District, reporting the School District's operation in more detail. The 'Governmental Funds' statements disclose how basic services are financed in the short-term as well as what remains for future spending. The 'Fiduciary Funds' statements provide information about the financial relationships in which the School District acts solely as a trustee or agent for the benefit of others. In the case of the Franklin County School District, the General Fund, Capital Projects Funds, and Debt Service Funds are all considered to be major funds. The School District had no funds reported as nonmajor funds. \nThe financial statements also include notes that explain some of the information in the statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and supports the financial statements. Additionally, other supplementary information (not required) is also presented that further supplements understanding of the financial statements. \nDistrict-wide Statements \nSince Franklin County School District has no operations that have been classified as \"Business Activities\", the District-wide financial statements are basically a consolidation of all of the School District's operating funds into one column called governmental activities. In reviewing the Districtwide financial statements, a reader might ask the question, are we in a better financial position now than last year? The 'Statement of Net Assets' and the 'Statement of Activities' provides the basis for answering this question. These financial statements include all District's assets and liabilities and uses the accrual basis of accounting similar to the accounting used by most private-sector companies. This basis of accounting takes into account all of the current year's revenues and expenses regardless of when cash is received or paid. \nThese two statements report the School District's net assets and any changes in those assets. The change in net assets is important because it tells the reader that, for the School District as a whole, the financial position of the School District has improved or diminished. The causes of this change may be the results of many factors, including those not under the School District's control, such as the property tax base, facility conditions, required educational programs, student-teacher ratios, and other factors. \nii \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 \nWhen analyzing District-wide financial statements, it is important to remember these statements are prepared using an economic resources measurement focus (accrual accounting) and involve the following steps to format the Statement of Net Assets: \n Capitalize current outlays for capital assets  Depreciate capital assets  Report long-term debt as a liability  Calculate revenue and expense using the economic resources measurement focus and the \naccrual basis of accounting  Allocate net assets as follows: \no Net Assets invested in capital assets, net of related debt o Restricted net assets are those with constraints placed on the use by external sources \nsuch as creditors, grantors, contributors or laws and regulations. o Unrestricted net assets are net assets that do not meet any of the above restrictions. \nFund Financial Statements \nThe School District uses many funds or sub-funds to account for a multitude of financial transactions during the fiscal year. The fund financial statements presented in this report provide detail information about the School District's significant or major funds. As discussed previously, the School District has no nonmajor funds as defined by generally accepted accounting principles. \nThe District has two kinds of funds as discussed below: \nGovernmental Funds  Most of the School District's activities are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end available for spending in future periods. These funds are reported using the modified accrual method of accounting which measures cash and all other financial assets that can be readily be converted to cash. The governmental fund statements provide a detailed short-term view of the School District's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance educational programs. The differences between government activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental funds are reconciled in the financial statements. \nFiduciary Funds  The School District is the trustee, or fiduciary, for assets that belong to clubs, organizations and others within the principals' accounts. The School District is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. The School District excludes these activities from the District-wide financial statements because it cannot use these assets to finance its operations. \nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT AS A WHOLE \nNet assets, which is the difference between total assets and total liabilities, is one indicator of the financial condition of the District. When revenues exceed expenses, the result is an increase in net assets. When expenses exceed revenues, the result is a decrease in net assets. The relationship between revenues and expenses can be thought of as the School District's operating results. The School District's net assets, as measured in the Statement of Net Assets, can be one way to measure the School District's financial health, or financial position. Over time, increases or \niii \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 decreases in the School District's net assets - as measured in the Statement of Activities - are one indicator of whether its financial health is improving or deteriorating. However, the School District's goal and mission is to provide success for each child's education, not to generate profits as private corporations do. For this reason, many other nonfinancial factors should be considered in assessing the overall health of the District. In the case of the Franklin County School District, assets exceeded liabilities by almost $53.9 million at June 30, 2012. To better understand the School District's actual financial position and ability to deliver services in future periods, it is necessary to review the various components of the net assets category. For example, of the $53.9 million of net assets, about $2.6 million was restricted for continuation of various Federal programs, and debt service. Accordingly, these funds were not available to meet the School District's ongoing obligations to citizens and creditors. In addition, the School District had $50.3 million (net of related debt) invested in capital assets (e.g., land, buildings, and equipment, etc.). The School District uses these capital assets to provide educational services to students within geographic boundaries served by the District. Because of the very nature and on-going use of the assets being reported in this component of net assets, it must be recognized that this portion of the net assets is not available for future spending. The remaining balance of unrestricted net assets of almost $1.1 million may be used to meet the School District's ongoing obligations to citizens and creditors. \niv \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 \n \nTable 1 provides a summary of the School District's net assets for this fiscal year as compared to the prior fiscal year. \nTable 1 Net Assets \n \nGovernmental Activities \n \nFiscal \n \nFiscal \n \nYear 2012 \n \nYear 2011 \n \nAssets Current and Other Assets Capital Assets, Net \n \n$ \n \n10,098,580 $ 12,260,655 \n \n53,165,684 \n \n53,247,245 \n \nTotal Assets \nLiabilities Current and Other Liabilities Long-Term Liabilities \n \n$ \n \n63,264,264 $ 65,507,900 \n \n$ \n \n4,427,445 $ 4,032,953 \n \n4,950,000 \n \n9,216,003 \n \nTotal Liabilities \nNet Assets Invested in Capital Assets, Net of Related Debt Restricted Unrestricted \n \n$ \n \n9,377,445 $ 13,248,956 \n \n$ \n \n50,295,486 $ 46,122,046 \n \n2,537,056 \n \n4,341,500 \n \n1,054,277 \n \n1,795,398 \n \nTotal Net Assets \n \n$ \n \n53,886,819 $ 52,258,944 \n \nTotal net assets increased $1.6 million in fiscal year 2012 from the prior year. This change in net assets is detailed in Table 2 as presented below. Table 2 also shows the changes in net assets as compared to the prior fiscal year. \n \nv \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 \n \nTable 2 Change in Net Assets \nRevenues Program Revenues: Charges for Services and Sales Operating Grants and Contributions Capital Grants and Contributions \nTotal Program Revenues \nGeneral Revenues: Taxes Property Taxes Sales Taxes Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous \nSpecial Item Transfers \nTotal General Revenues and Special Item \nTotal Revenues \nProgram Expenses: Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Operations of Non-Instructional Services Enterprise Operations Food Services Interest on Short-Term and Long-Term Debt \nTotal Expenses \nIncrease in Net Assets \n \nGovernmental Activities \n \nFiscal Year \n \nFiscal Year \n \n2012 \n \n2011 \n \n$ \n \n578,361 $ \n \n658,117 \n \n19,837,438 \n \n21,960,064 \n \n290,492 \n \n228,876 \n \n$ \n \n20,706,291 $ \n \n22,847,057 \n \n$ \n \n9,084,999 $ \n \n9,852,525 \n \n3,503,406 \n \n3,239,290 \n \n731,200 34,716 \n882,824 \n \n888,437 52,191 \n719,957 \n \n3,523 \n \n$ \n \n14,237,145 $ \n \n14,755,923 \n \n$ \n \n34,943,436 $ \n \n37,602,980 \n \n$ \n \n20,844,932 $ \n \n21,582,711 \n \n1,005,496 1,370,245 \n735,419 383,528 2,056,130 441,512 2,127,459 1,807,861 110,835 210,949 \n \n932,373 1,432,757 \n745,517 436,149 2,059,050 244,173 2,192,128 1,714,538 \n44,955 218,357 \n \n371,646 1,551,759 \n297,791 \n \n405,060 1,475,259 \n415,100 \n \n$ \n \n33,315,562 $ \n \n33,898,127 \n \n$ \n \n1,627,874 $ \n \n3,704,853 \n \nvi \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 \n \nCost of Providing Services \nThe Statement of Activities shows the cost of program services and the charges for services and grants offsetting these services. Table 3 shows, for governmental activities, the total cost of services and the net cost of services. Net cost of services can be defined as the total cost less fees generated by the activities and intergovernmental revenue provided for specific programs. The net cost reflects the financial burden on the School District's taxpayers by each activity as compared to the prior fiscal year. \nTable 3 Governmental Activities \n \nTotal Cost of Services \n \nFiscal \n \nFiscal \n \nYear 2012 \n \nYear 2011 \n \nNet Cost of Services \n \nFiscal \n \nFiscal \n \nYear 2012 \n \nYear 2011 \n \nInstruction \n \n$ \n \n20,844,932 $ 21,582,711 $ \n \n6,948,884 $ \n \nSupport Services: \n \nPupil Services \n \n1,005,496 \n \n932,373 \n \n810,607 \n \nImprovement of Instructional Services \n \n1,370,245 \n \n1,432,757 \n \n803,645 \n \nEducational Media Services \n \n735,419 \n \n745,517 \n \n273,338 \n \nGeneral Administration \n \n383,528 \n \n436,149 \n \n-288,143 \n \nSchool Administration \n \n2,056,130 \n \n2,059,050 \n \n1,011,615 \n \nBusiness Administration \n \n441,512 \n \n244,173 \n \n432,280 \n \nMaintenance and Operation of Plant \n \n2,127,459 \n \n2,192,128 \n \n929,830 \n \nStudent Transportation Services \n \n1,807,861 \n \n1,714,538 \n \n935,113 \n \nCentral Support Services \n \n110,835 \n \n44,955 \n \n110,835 \n \nOther Support Services \n \n210,949 \n \n218,357 \n \n169,411 \n \nOperations of Non-Instructional Services: \n \nEnterprise Operations \n \n371,646 \n \n405,060 \n \n262,449 \n \nCommunity Services \n \nFood Services \n \n1,551,759 \n \n1,475,259 \n \n-88,385 \n \nInterest on Short-Term and Long-Term Debt \n \n297,791 \n \n415,100 \n \n297,791 \n \n5,495,073 \n744,212 1,085,539 \n253,127 -323,472 990,962 243,407 1,043,479 753,997 \n44,955 159,137 \n234,543 -2,240 \n-86,749 415,100 \n \nTotal Expenses \n \n$ \n \n33,315,562 $ 33,898,127 $ 12,609,270 $ \n \n11,051,070 \n \nExpenses for fiscal year 2012 decreased from the prior year by roughly $582,500 while the net cost of services increased $1.5 million or about 14.0%. This situation occurred because fiscal year 2012 program revenues fell about $2.1 million or 9.4% from the prior year. Program revenues decreased from lower Federal revenues caused primarily from the loss of stimulus grant funds. In addition, State revenues received during the fiscal year 2012 through the QBE funding formula decreased. \nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT'S FUNDS \nInformation about the School District's governmental funds is presented starting on Exhibit \"C\" of this report. Governmental funds are accounted for using the modified accrual basis of accounting. The governmental funds had total revenues of $35.0 million and total expenditures of $37.4 million in fiscal year 2012. Total governmental fund balances of $5.5 million at June 30, 2012, decreased about $2.4 million from the prior year. \n \nvii \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 \n \nGeneral Fund Budget Highlights \nThe School District's budget is prepared according to Georgia Law. The most significant budgeted fund is the General Fund. During the course of fiscal year 2012, the School District amended its general fund budget as needed. \nThe School District budget is adopted at the aggregate level and maintained at the program, function, object, and site levels to facilitate budgetary control. The budgeting systems are designed to control the total budget, but provide flexibility to meet the ongoing programmatic needs. The budgeting systems are also designed to control total site budgets but provide flexibility for site management as well. \nFor the General Fund, the final actual revenues of almost $31.7 million exceeded the budgeted amount by about $800 thousand. This budget variance was primarily due to actual revenues for miscellaneous revenues exceeding the budget by roughly $858,000.00. The School District traditionally estimates revenue on a conservative basis to avoid substantial shortfalls in actual revenues. \nThe General Fund's final actual expenditures of $32.0 million were less than the final budget amount of almost $32.1 million by roughly $100,000.00. This small variance demonstrates the Board did a creditable job of budgeting General Fund expenditures in fiscal year 2012. \nCAPITAL ASSETS AND DEBT ADMINISTRATION \nCapital Assets \nAt fiscal year ended June 30, 2012, the School District had almost $53.2 million invested in capital assets, net of accumulated depreciation, all in governmental activities. These assets are made up of a broad range of items including buildings; land; land improvements; and food service, transportation and maintenance equipment; and intangible assets. Table 4 reflects a summary of these balances, net of accumulated depreciation, as compared to the prior fiscal year. \n \nTable 4 Capital Assets (Net of Depreciation) \n \nGovernmental Activities \n \nFiscal \n \nFiscal \n \nYear 2012 \n \nYear 2011 \n \nLand Construction In Progress Land Improvements Building and Improvements Equipment Intangible Assets \n \n$ \n \n1,338,157 $ \n \n851,980 \n \n6,902,134 \n \n41,929,325 \n \n2,087,914 \n \n56,174 \n \n1,338,157 65,000 \n7,011,611 42,581,364 \n2,184,372 66,741 \n \nTotal \n \n$ \n \n53,165,684 $ \n \n53,247,245 \n \nAdditional information about the School District's Capital Assets can be found in the Notes to the Basic Financial Statements. \n \nviii \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 \n \nLong-Term Debt \nAt June 30, 2012, the School District had $4.95 million in total debt outstanding which consisted entirely bond debt. Table 5 summarizes the School District's debt as compared to the prior fiscal year. \nTable 5 Debt at June 30 \n \nGovernmental Activities \n \nFiscal \n \nFiscal \n \nYear 2012 \n \nYear 2011 \n \nBonds Payable Capital Leases \n \n$ \n \n4,950,000 $ \n \n9,205,000 11,003 \n \nTotal \n \n$ \n \n4,950,000 $ \n \n9,216,003 \n \nAdditional information about the School District's debt can be found in the Notes to the Basic Financial Statements. \n \nFACTORS BEARING ON THE SCHOOL DISTRICT'S FUTURE \n \nCurrently known circumstances that are expected to have a significant effect on financial position or results of operations in future years are as follows: \n \n The School District is financially stable. The School District's operating millage for fiscal year 2012 was 14.868, which produced approximately $641,000 per mill. For the fiscal year 2013, the millage was raised to 16.868 to mainly offset decreases in revenue from the drop in tax digest. The School District will construct additional facilities to accommodate the growth and reduce portable classrooms at various schools as needed. The School District plans to fund additional capital outlays with the one percent local sales tax revenue and state capital outlay grants. \n \n The School District continues to be financially challenged by the continuing slow economy and decreasing property values. Revenues in fiscal year 2012 from property taxes were virtually unchanged as compared with the prior year while State Funds and Federal Funds combined decreased from the prior year by over $2.3 million or about 10.2%. \n \n Despite the constrained levels of revenues realized in fiscal year 2012, the School District is in excellent financial condition. The General Fund had a total fund balance of almost $3.3 million at June 30, 2012, which is down $408,300 from last year. The Board anticipates significant financial challenges going forward due to expected flat or slightly lower revenues from all sources while the cost of many items such as health insurance for classified employees will rise significantly. In spite of these challenges, the School District will continue to be a good steward of tax dollars while providing a quality educational opportunity. \n \nix \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 CONTACTING THE SCHOOL DISTRICT'S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, investors and creditors with a general overview of the School District's finances and to show the School District's accountability for the money it receives. If you have questions about this report or need additional financial information, contact Mr. Tom Porter, Finance Director, Franklin County Board of Education, 280 Busch Road, Carnesville, Georgia 30521. You may also email your questions to Mr. Porter at tporter@franklin.k12.ga.us. \nx \n \n FRANKLIN COUNTY BOARD OF EDUCATION \n \n  FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF NET ASSETS JUNE 30, 2012 \nASSETS \nCash and Cash Equivalents Investments Accounts Receivable \nTaxes State Government Federal Government Other Inventories Capital Assets, Non-Depreciable Assets Capital Assets, Depreciable Assets \nTotal Assets \nLIABILITIES \nAccounts Payable Salaries and Benefits Payable Payroll Liabilities Interest Payable Contracts Payable Deposits and Deferred Revenues Long-Term Debt \nDue Within One Year \nTotal Liabilities \nNET ASSETS \nInvested in Capital Assets, Net of Related Debt Restricted for \nContinuation of Federal Programs Debt Service Unrestricted \nTotal Net Assets \nTotal Liabilities and Net Assets \n \nEXHIBIT \"A\" \n \nGOVERNMENTAL ACTIVITIES \n \n$ \n \n4,032,563.87 \n \n2,004,714.86 \n \n1,264,948.95 2,253,670.82 \n519,519.10 471.17 \n22,690.98 2,190,137.81 50,975,546.51 \n \n$ \n \n63,264,264.07 \n \n$ \n \n115,341.93 \n \n3,701,846.22 \n \n164,004.56 \n \n44,741.25 \n \n33,271.06 \n \n368,240.48 \n \n4,950,000.00 \n \n$ \n \n9,377,445.50 \n \n$ \n \n50,295,485.50 \n \n460,174.24 2,076,881.28 1,054,277.55 \n \n$ \n \n53,886,818.57 \n \n$ \n \n63,264,264.07 \n \nThe notes to the basic financial statements are an integral part of this statement. - 1 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES \nFOR THE YEAR ENDED JUNE 30, 2012 \n \nGOVERNMENTAL ACTIVITIES \nInstruction Support Services \nPupil 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 Operations of Non-Instructional Services Enterprise Operations Food Services Interest on Short-Term and Long-Term Debt \nTotal Governmental Activities \nGeneral Revenues Taxes Property Taxes For Maintenance and Operations Sales Taxes Special Purpose Local Option Sales Tax For Debt Services Other Sales Tax Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous \nTotal General Revenues \nChange in Net Assets \nNet Assets - Beginning of Year \nNet Assets - End of Year \n \nEXPENSES \n \nCHARGES FOR SERVICES \n \n$ \n \n20,844,931.71 $ \n \n1,005,495.61 1,370,244.99 \n735,418.50 383,527.52 2,056,130.17 441,511.62 2,127,459.26 1,807,861.27 110,835.29 210,948.90 \n \n371,646.00 1,551,758.67 \n297,790.74 \n \n$ \n \n33,315,560.25 $ \n \n15,190.35 \n50,575.00 3,750.00 \n109,196.77 399,648.73 578,360.85 \n \nThe notes to the basic financial statements are an integral part of this statement. - 2 - \n \n EXHIBIT \"B\" \n \nPROGRAM REVENUES OPERATING GRANTS AND \nCONTRIBUTIONS \n \nCAPITAL GRANTS AND CONTRIBUTIONS \n \nNET (EXPENSES) REVENUES \nAND CHANGES IN NET ASSETS \n \n$ 13,742,803.68 $ \n194,888.87 566,600.36 462,080.93 671,670.05 1,044,515.40 \n9,231.30 1,147,054.57 \n716,559.69 \n41,537.87 \n1,240,494.79 \n$ 19,837,437.51 $ \n \n138,053.42 $ 152,439.00 290,492.42 $ \n \n-6,948,884.26 \n-810,606.74 -803,644.63 -273,337.57 288,142.53 -1,011,614.77 -432,280.32 -929,829.69 -935,112.58 -110,835.29 -169,411.03 \n-262,449.23 88,384.85 \n-297,790.74 \n-12,609,269.47 \n \n$ \n \n9,084,998.77 \n \n3,355,904.86 147,501.06 731,200.00 34,715.60 882,823.74 \n \n$ \n \n14,237,144.03 \n \n$ \n \n1,627,874.56 \n \n52,258,944.01 \n \n$ \n \n53,886,818.57 \n \n- 3 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION BALANCE SHEET \nGOVERNMENTAL FUNDS JUNE 30, 2012 \n \nEXHIBIT \"C\" \n \nASSETS \nCash and Cash Equivalents Investments Accounts Receivable, Net \nTaxes State Government Federal Government Local Inventories \nTotal Assets \nLIABILITIES AND FUND BALANCES \nLIABILITIES \nCash Overdraft Accounts Payable Salaries and Benefits Payable Payroll Withholdings Payable Contracts Payable Deposits and Deferred Revenue \nTotal Liabilities \nFUND BALANCES \nNonspendable Restricted Committed Assigned Unassigned \nTotal Fund Balances \nTotal Liabilities and Fund Balances \n \nGENERAL FUND \n \nDISTRICTWIDE \nCAPITAL PROJECTS \nFUND \n \nDEBT SERVICE \nFUND \n \nTOTAL \n \n$ 4,159,768.19 $ 53,186.65 \n \n$ 4,212,954.84 \n \n$ 2,004,714.86 2,004,714.86 \n \n967,650.31 2,253,670.82 \n519,519.10 471.17 \n22,690.98 \n \n297,298.64 \n \n1,264,948.95 2,253,670.82 \n519,519.10 471.17 \n22,690.98 \n \n$ 7,923,770.57 $ 53,186.65 $ 2,302,013.50 $ 10,278,970.72 \n \n$ 95,426.34 $ 3,701,846.22 164,004.56 \n620,679.55 \n \n$ 19,915.59 \n33,271.06 \n \n180,390.97 $ \n \n180,390.97 115,341.93 3,701,846.22 164,004.56 \n33,271.06 620,679.55 \n \n$ 4,581,956.67 $ 53,186.65 $ 180,390.97 $ 4,815,534.29 \n \n$ 22,690.98 $ 437,483.26 439,346.71 537,537.00 \n1,904,755.95 \n$ 3,341,813.90 $ \n \n0.00 $ \n \n$ 2,121,622.53 \n \n22,690.98 2,559,105.79 \n439,346.71 537,537.00 1,904,755.95 \n \n0.00 $ 2,121,622.53 $ 5,463,436.43 \n \n$ 7,923,770.57 $ 53,186.65 $ 2,302,013.50 $ 10,278,970.72 \n \nThe notes to the basic financial statements are an integral part of this statement. - 4 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \nTO THE STATEMENT OF NET ASSETS JUNE 30, 2012 \n \nEXHIBIT \"D\" \n \nTotal Fund Balances - Governmental Funds (Exhibit \"C\") \nAmounts reported for Governmental Activities in the Statement of Net Assets are different because: \nCapital Assets used in Governmental Activities are not financial resources and therefore are not reported in the funds. These assets consist of: \nLand Construction in Progress Land Improvements Buildings Machinery and Equipment Intangible Assets Accumulated Depreciation \nTotal Capital Assets \nSome of the School Districts tax revenues are deferred on the Fund Statements because they are not available soon enough after fiscal year-end to pay for the current periods expenditures. These taxes are not deferred on the Governmental Activities. \nProperty Taxes \nSome Liabilities reported in the Governmental Activities do not require the use of current financial resources, and therefore are not reported as considered liabilities in the Governmental Fund Statements. \nAccrued Interest on Long-Term Debt \nLong-Term Liabilities, including Bonds Payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. Long-Term Liabilities at year-end consist of: \nGeneral Obligation Bonds Payable \nNet Assets of Governmental Activities (Exhibit \"A\") \n \n$ 5,463,436.43 \n \n$ 1,338,157.39 851,980.42 \n7,675,786.19 50,113,066.70 \n5,370,266.98 105,379.62 \n-12,288,952.98 \n \n53,165,684.32 \n \n252,439.07 -44,741.25 -4,950,000.00 $ 53,886,818.57 \n \nThe notes to the basic financial statements are an integral part of this statement. - 5 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES \nGOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2012 \n \nEXHIBIT \"E\" \n \nREVENUES \nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous \nTotal Revenues \nEXPENDITURES \nCurrent 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 Food Services Operation \nCapital Outlay Debt Services \nPrincipal Dues and Fees Interest \nTotal Expenditures \nExcess of Revenues over (under) Expenditures \nOTHER FINANCING SOURCES (USES) \nTransfers In Transfers Out \nTotal Other Financing Sources (Uses) \nNet Change in Fund Balances \nFund Balances - Beginning \nFund Balances - Ending \n \nGENERAL FUND \n \nDISTRICTWIDE \nCAPITAL PROJECTS \nFUND \n \nDEBT SERVICE \nFUND \n \nTOTAL \n \n$ 9,299,666.97 147,501.06 \n17,126,192.87 3,594,883.64 578,360.85 30,181.70 $ 888,386.02 \n$ 31,665,173.11 $ \n \n$ 490.57 \n \n$ 3,355,904.86 \n4,043.33 \n \n9,299,666.97 3,503,405.92 17,126,192.87 3,594,883.64 \n578,360.85 34,715.60 \n888,386.02 \n \n490.57 $ 3,359,948.19 $ 35,025,611.87 \n \n$ 20,068,780.99 \n \n$ 20,068,780.99 \n \n1,005,495.61 1,370,244.99 \n716,171.36 383,527.52 1,997,723.70 429,917.42 2,142,091.14 1,798,300.27 $ \n49,340.27 210,948.90 371,646.00 1,499,320.74 \n \n9,561.00 750,647.53 \n \n1,005,495.61 1,370,244.99 \n716,171.36 383,527.52 1,997,723.70 429,917.42 2,142,091.14 1,807,861.27 \n49,340.27 210,948.90 371,646.00 1,499,320.74 750,647.53 \n \n11,003.17 492.93 \n \n$ 4,255,000.00 2,867.81 \n333,356.50 \n \n4,266,003.17 2,867.81 \n333,849.43 \n \n$ 32,055,005.01 $ 763,076.34 $ 4,588,356.50 $ 37,406,437.85 \n \n$ -389,831.90 $ -762,585.77 $ -1,228,408.31 $ -2,380,825.98 \n \n$ 268,815.90 \n \n$ 268,815.90 \n \n$ \n \n-18,468.00 \n \n$ -250,347.90 \n \n-268,815.90 \n \n$ \n \n-18,468.00 $ 268,815.90 $ -250,347.90 $ \n \n0.00 \n \n$ -408,299.90 $ -493,769.87 $ -1,478,756.21 $ -2,380,825.98 \n \n3,750,113.80 493,769.87 3,600,378.74 \n \n7,844,262.41 \n \n$ 3,341,813.90 $ \n \n0.00 $ 2,121,622.53 $ 5,463,436.43 \n \nThe notes to the basic financial statements are an integral part of this statement. - 6 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF \nREVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2012 \n \nEXHIBIT \"F\" \n \nTotal Net Change in Fund Balances - Governmental Funds (Exhibit \"E\") \nAmounts reported for Governmental Activities in the Statement of Activities are different because: \nCapital Outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activities, the cost of Capital Assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are: \nCapital Outlay Depreciation Expense \nExcess of Capital Outlay over Depreciation Expense \nThe net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, donations, and disposals) is to decrease net assets. \nDonated Capital Assets are not reported in Governmental Funds. However, in the Statement of Activities, the donated assets are shown as Capital Grants and Contributions. \nBecause some taxes will not be collected for several months after the School District's fiscal year ends, they are not considered \"available\" revenues. \nDeferred Property Taxes June 30, 2011 June 30, 2012 Total Deferred Property Taxes \nSome expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore are not reported as expenditures in the Governmental Funds. \nAccrued Interest Expense June 30, 2011 June 30, 2012 Total Accrued Interest Expense \nRepayment of Long-Term Debt is reported as an expenditure in Governmental Funds, but the repayment reduces Long-Term Liabilities in the Statement of Net Assets. In the current year, these amounts consist of: \nRedemption of Bond Principal Redemption of Capital Leases \nTotal Debt Repayment \nChange in Net Assets of Governmental Activities (Exhibit \"B\") \n \n$ -2,380,825.98 \n \n$ 835,324.00 -1,049,376.07 \n \n-214,052.07 \n \n-5,562.28 \n \n138,053.42 \n \n$ -467,107.27 252,439.07 \n \n-214,668.20 \n \n$ \n \n83,667.75 \n \n-44,741.25 \n \n38,926.50 \n \n$ 4,255,000.00 11,003.17 \n \n4,266,003.17 \n \n$ 1,627,874.56 \n \nThe notes to the basic financial statements are an integral part of this statement. - 7 - \n \n (This page left intentionally blank) \n \n ASSETS Cash and Cash Equivalents \nLIABILITIES Funds Held for Others \n \nFRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30, 2012 \n \nEXHIBIT \"G\" \nAGENCY FUNDS $ 128,618.63 \n$ 128,618.63 \n \nThe notes to the basic financial statements are an integral part of this statement. - 9 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2012 \n \nEXHIBIT \"H\" \n \nNote 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY \nREPORTING ENTITY \nThe Franklin County 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. \nNote 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES \nBASIS OF PRESENTATION \nThe 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 Franklin County Board of Education. \nDistrict-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. \nThe Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities. \n Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of 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. \n 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. \nFund Financial Statements: 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. The School District has no funds that are reported as nonmajor funds. \nThe School District reports the following major governmental funds: \n General Fund is the School District's primary operating fund. It accounts for and reports all financial resources not accounted for and reported in another fund. \n \n- 10 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2012 \n \nEXHIBIT \"H\" \n \n District-wide Capital Projects Fund accounts for and reports financial resources including Special Purpose Local Option Sales Tax (SPLOST) that are restricted, committed or assigned to the expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets. \n Debt Service Fund accounts for and reports financial resources that are restricted, committed, or assigned including taxes (sales) legally restricted for the payment of general long-term principal and interest. \nThe School District reports the following fiduciary fund type: \n Agency funds account for assets held by the School District as an agent for various funds, governments, or individuals. \nBASIS OF ACCOUNTING \nThe basis of accounting determines when transactions are reported on the financial statements. The District-wide governmental and fiduciary 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 is recognized in the fiscal year in which all eligibility requirements have been satisfied. \nThe 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. \nGovernmental 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, except for principal and interest on general long-term debt, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities and acquisitions under capital leases are reported as other financing sources. \nThe 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. \n \n- 11 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2012 \n \nEXHIBIT \"H\" \n \nCASH AND CASH EQUIVALENTS \nComposition 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. \nINVESTMENTS \nComposition of Investments Investments 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 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: \n(1) Obligations issued by the State of Georgia or by other states, \n(2) Obligations issued by the United States government, \n(3) Obligations fully insured or guaranteed by the United States government or a United States government agency, \n(4) Obligations of any corporation of the United States government, \n(5) Prime banker's acceptances, \n(6) The Georgia Fund 1 administered by the State of Georgia, Office of the State Treasurer, \n(7) Repurchase agreements, and \n(8) Obligations of other political subdivisions of the State of Georgia. \nThe School District does not have a formal policy regarding investment policies that address credit risks, concentration of credit risks, interest rate risks or foreign currency risks. \nRECEIVABLES \nReceivables 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. \n \n- 12 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2012 \n \nEXHIBIT \"H\" \n \nPROPERTY TAXES \n \nThe Franklin County Board of Commissioners fixed the property tax levy for the 2011 tax digest year (calendar year) on July 22, 2011 (levy date). Taxes were due on November 15, 2011 (due date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2011 tax digest are reported as revenue in the governmental funds for fiscal year 2012. The Franklin County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2012, for maintenance and operations amounted to $9,299,666.97. \n \nThe tax millage rate levied for the 2011 tax year (calendar year) for the Franklin County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value): \n \nSchool Operations \n \n14.868 mills \n \nSALES TAXES \n \nSpecial Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $3,355,904.86 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years. The most recent authorization expires on December 31, 2017. \n \nINVENTORIES \n \nFood 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. \n \nCAPITAL ASSETS \n \nCapital 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 2012, no events or changes in circumstances affecting a capital asset that may indicate impairment were known to the School District. \n \n- 13 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2012 \n \nEXHIBIT \"H\" \n \nCapitalization thresholds and estimated useful lives of capital assets reported in the District-wide \n \nstatements are as follows: \n \nCapitalization \n \nEstimated \n \nPolicy \n \nUseful Life \n \nLand Land Improvements Buildings and Improvements Equipment Intangible Assets \n \nAny Amount $ 10,000.00 $ 20,000.00 $ 5,000.00 $ 20,000.00 \n \nN/A 20 to 80 years 25 to 80 years \n5 to 50 years Estimated Life \n \nDepreciation 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. \n \nAmortization 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, generally 10 to 20 years. \n \nGENERAL OBLIGATION BONDS \n \nThe School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. \n \nIn the District-wide and fund financial statements, the School District recognizes bond premiums and discounts, as well as bond issuance costs during the fiscal year bonds are issued. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. To conform to generally accepted accounting principles, bond premiums and discounts, as well as bond issuance costs should be amortized over the life of the bonds on the District-wide statements. The effect of this deviation is deemed to be immaterial to the fair presentation of the basic financial statements. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the Statement of Net Assets. \n \nNET ASSETS \n \nThe School District's net assets in the District-wide Statements are classified as follows: \n \nInvested in capital assets, net of related debt - This represents the School District's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt. \n \nRestricted net assets - These represent resources for which the School District is legally or contractually obligated to spend resources for bus replacement, continuation of Federal programs, debt service and capital projects in accordance with restrictions imposed by external third parties. \n \nUnrestricted 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. \n \n- 14 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2012 \n \nEXHIBIT \"H\" \n \nFUND BALANCES \n \nThe School District's fund balances are classified as follows: \n \nNonspendable  Amounts that cannot be spent either because they are in a nonspendable form or because they are legally or contractually required to be maintained intact. \n \nRestricted  Constraints are placed on the use of resources are either (1) externally imposed conditions by creditors, grantors, contributors, or laws and regulations of other governments or (2) imposed by law through constitutional provisions or enabling legislation. \n \nCommitted  Amounts that can be used only for specific purposes pursuant to constraints imposed by formal action of the Board of Education. The Board of Education is the School District's highest level of decision-making authority, and the formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution approved by the Board. Committed fund balance also should incorporate contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements. \nAssigned  Amounts that are constrained by the School District's intent to be used for specific purposes, but are neither restricted nor committed. The intent should be expressed by (1) the Board of Education or (2) the budget or finance committee, or the Superintendent, or designee, to assign amounts to be used for specific purposes. \n \nUnassigned  The residual classification for the General Fund. This classification represents fund balances that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the General Fund. \n \nFund Balances of the Governmental Funds at June 30, 2012, are as follows: \n \nNonspendable Inventories \nRestricted Continuation of Federal Programs Debt Service \nCommitted School Activity Accounts \nAssigned Subsequent Period Expenditures \nUnassigned \n \n$ \n \n22,690.98 \n \n$ 437,483.26 2,121,622.53 \n \n2,559,105.79 \n \n439,346.71 \n \n537,537.00 1,904,755.95 \n \nFund Balance, June 30, 2012 \n \n$ 5,463,436.43 \n \nIt is the goal of the School District to achieve and maintain a committed, assigned, and unassigned fund balance in the general fund at fiscal year end of not less than 5% of revenues, not to exceed 15% of the total budget of the subsequent fiscal year, in compliance with Official Code of Georgia Annotated Section 20-2-167(a)5. If the unassigned fund balance at fiscal year end falls below the goal, the School District shall develop a restoration plan to achieve and maintain the minimum fund balance. \n \n- 15 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2012 \n \nEXHIBIT \"H\" \n \nWhen multiple categories of fund balance are available for expenditure, the School District will start with the most restricted category and spend those funds first before moving down to the next category with available funds. \nUSE OF ESTIMATES \nThe 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. \nNote 3: BUDGETARY DATA \nThe budget is a complete financial plan for the School District's fiscal year, and is based upon careful estimates of expenditures together with probable funding sources. The budget is legally adopted each year for the general, debt service, and capital projects funds. There is no statutory prohibition regarding over expenditure of the budget at any level. The budget for all governmental funds, except the various school activity (principal) accounts, is prepared and adopted by fund and function. The legal level of budgetary control was established by the Board at the aggregate function level. The budget for the General Fund was prepared in accordance with accounting principles generally accepted in the United States of America. \nThe budgetary process begins with the School District's administration presenting an initial budget for the Board's review. The administration makes revisions as necessary based on the Board's guidelines and a tentative budget is approved. After approval of this tentative budget by the Board, such budget is advertised in the local legal organ newspaper of general circulation, as well as the School District's website. At the next regularly scheduled meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary. The Board adopts a final budget after at least two weeks have passed since the budget advertisement. The approved budget is then submitted, in accordance with provisions of Official Code of Georgia Annotated section 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end. \nOnly the Board is authorized to approve adjustments to the approved budget for revenue or expenditure changes in any budget function for any fund. \nSee Schedule 1  General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances  Budget to Actual for a detail of any over/under expenditures during fiscal year 2012. \nNote 4: DEPOSITS AND INVESTMENTS \nCOLLATERALIZATION OF DEPOSITS \nOfficial 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 110 percent of the daily pool balance. \n \n- 16 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2012 \n \nEXHIBIT \"H\" \n \nAcceptable security for deposits consists of any one of or any combination of the following: \n(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, \n(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, \n(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia, \n(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, \n(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, \n(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and \n(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. \nCATEGORIZATION OF DEPOSITS \nCustodial 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, 2012, the bank balances were $4,369,076.99. The bank balances were entirely covered by Federal depository insurance or collateralized with securities held by the pledging financial institution in the School District's name. \nCATEGORIZATION OF INVESTMENTS \nAt June 30, 2012, the carrying value of the School District's total investments was $2,004,714.86, which is materially the same as fair value. This investment consisted entirely of funds invested in the Georgia Fund 1, formerly referred to as LGIP, administered by the State of Georgia, Office of the State Treasurer which is not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office of the State Treasurer for the Georgia Fund 1 (Primary Liquidity Portfolio ) does not provide for investment in derivatives or similar investments. Additional information on the Georgia Fund 1 is disclosed in the State of Georgia Comprehensive Annual Financial Report. This audit can be obtained from the Georgia Department of Audits and Accounts at www.audits.ga.gov/SGD/CAFR.html. \nThe Primary Liquidity Portfolio consists of Georgia Fund 1 which is not registered with the SEC as an investment company but does operate in a manner consistent with the SEC's Rule 2a-7 of the Investment Company Act of 1940. The investment is valued at the pool's share price, $1.00 per share. The pool is an AAAm rated investment pool by Standard and Poor's. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2012, was 48 days. \n- 17 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2012 \n \nEXHIBIT \"H\" \n \nNote 5: NON-MONETARY TRANSACTIONS \nThe School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 2 - Inventories \nNote 6: CAPITAL ASSETS \nThe following is a summary of changes in the Capital Assets during the fiscal year: \n \nGovernmental Activities Capital Assets, Not Being Depreciated: \nLand Construction Work In Progress \n \nBalances July 1, 2011 \n \nIncreases \n \nDecreases \n \nBalances June 30, 2012 \n \n$ 1,338,157.39 65,000.00 $ \n \n$ 786,980.42 \n \n0.00 $ \n \n1,338,157.39 851,980.42 \n \nTotal Capital Assets, Not Being Depreciated $ 1,403,157.39 $ \n \n786,980.42 $ \n \n0.00 $ 2,190,137.81 \n \nCapital Assets, Being Depreciated: Buildings and Improvements Equipment Land Improvements Intangible Assets \n \n$ 50,113,066.70 5,396,644.98 $ 7,675,786.19 105,379.62 \n \n186,397.00 $ \n \n$ 212,775.00 \n \n50,113,066.70 5,370,266.98 7,675,786.19 105,379.62 \n \nLess: Accumulated Depreciation: Buildings and Improvements Equipment Land Improvements Intangible Assets \n \n7,531,702.37 3,212,272.81 \n664,175.35 38,639.10 \n \n652,039.18 277,292.91 109,477.16 \n10,566.82 \n \n207,212.72 \n \n8,183,741.55 3,282,353.00 \n773,652.51 49,205.92 \n \nTotal Capital Assets, Being Depreciated, Net $ 51,844,087.86 $ -862,979.07 $ \n \n5,562.28 $ 50,975,546.51 \n \nGovernmental Activity Capital Assets - Net \n \n$ 53,247,245.25 $ \n \n-75,998.65 $ \n \nCurrent year depreciation expense by function is as follows: \n \n5,562.28 $ 53,165,684.32 \n \nInstruction Support Services \nEducational Media Services School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Food Services \n \n$ \n \n$ \n \n17,548.41 \n \n53,249.24 \n \n10,566.82 \n \n8,900.50 \n \n203,740.89 \n \n707,570.74 \n294,005.86 47,799.47 \n \n$ \n \n1,049,376.07 \n \n- 18 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2012 \n \nEXHIBIT \"H\" \n \nNote 7: INTERFUND TRANSFERS Interfund transfers for the year ended June 30, 2012, consisted of the following: \n \nTransfer to \n \nTransfers From \n \nGeneral \n \nDebt Service \n \nFund \n \nFund \n \nDistrict-wide Capital Projects \n \n$ \n \n18,468.00 $ 250,347.90 \n \nTransfers are used (1) to move property tax revenues collected by the General Fund to the Districtwide Capital Projects Fund for supplemental funding for capital construction projects; and (2) to move funds from the Debt Service Fund to the Capital Projects Fund to provide funding from SPLOST proceeds for expenditures approved by applicable SPLOST referendums. \n \nNote 8: RISK MANAGEMENT \n \nThe 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. \n \nThe School District participates in the Georgia School Boards Association Risk and Insurance Management System, a public entity risk pool organized on July 1, 1994, to develop and administer a plan to reduce risk of loss on account of general liability, motor vehicle liability, or property damage, including safety engineering and other loss prevention and control techniques, and to administer one or more groups of self-insurance funds, including the processing and defense of claims brought against members of the system. The School District pays an annual premium to the system for its general insurance coverage. Additional coverage is provided through agreements by the system with other companies according to their specialty for property, boiler and machinery (including coverage for flood and earthquake), general liability (including coverage for sexual harassment, molestation and abuse), errors and omissions, crime and automobile risks. Payment of excess insurance for the system varies by line of coverage. \n \nThe School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the General Fund with expenses/expenditures and the related liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. \n \nChanges in the unemployment compensation claims liability during the last two fiscal years are as \n \nfollows: \n \nClaims and \n \nBeginning of Year \n \nChanges in \n \nClaims \n \nEnd of Year \n \nLiability \n \nEstimates \n \nPaid \n \nLiability \n \n2011 $ 2012 $ \n \n0.00 $ 0.00 $ \n \n44,561.00 $ 21,246.00 $ \n \n44,561.00 $ 21,246.00 $ \n \n0.00 0.00 \n \nThe School District participates in the Georgia School Boards Association Workers' Compensation Fund, a public entity risk pool organized on July 1, 1992, 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 Fund for its Workers' Compensation insurance coverage. Excess \n \n- 19 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2012 \n \nEXHIBIT \"H\" \n \ninsurance coverage is provided through an agreement by the Fund with the Safety National Casualty Corporation to provide coverage for potential losses sustained by the Fund in excess of $550 thousand loss per occurrence, up to the statutory limit. Employers' Liability insurance coverage is also provided by Safety National Casualty Corporation to provide coverage for potential losses sustained by the Fund in excess of $550 thousand loss per occurrence, up to $2 million. \nThe School District has purchased a surety bond to provide additional insurance coverage as follows: \n \nPosition Covered \n \nAmount \n \nSuperintendent \n \n$ 100,000.00 \n \nNote 9: LONG-TERM DEBT \n \nCAPITAL LEASES \n \nThe Franklin County Board of Education entered into various lease agreements for equipment. These lease agreements qualify as capital leases for accounting purposes, and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception. \n \nGENERAL OBLIGATION DEBT OUTSTANDING \n \nGeneral Obligation Bonds currently outstanding are as follows: \n \nPurpose \n \nInterest Rates \n \nAmount \n \nGeneral Government - Series 2006 General Government - Series 2007 \n \n3.73% 3.46% \n \n$ 2,850,000.00 2,100,000.00 \n \n$ 4,950,000.00 \nIn fiscal year 2011, voters authorized $15,000,000.00 in general obligation debt for various capital outlay and renovation projects. This debt was not issued as of June 30, 2012. (See Note 13 Subsequent Events) \nThe changes in Long-Term Debt during the fiscal year ended June 30, 2012, were as follows: \n \nBalance July 1, 2011 \n \nAdditions \n \nGovernmental Funds \n \nBalance \n \nDeductions \n \nJune 30, 2012 \n \nDue Within One Year \n \nG. O. Bonds Capital Leases \n \n$ 9,205,000.00 $ 11,003.17 \n \n0.00 $ 4,255,000.00 $ 4,950,000.00 $ 4,950,000.00 \n \n11,003.17 \n \n0.00 \n \n$ 9,216,003.17 $ \n \n0.00 $ 4,266,003.17 $ 4,950,000.00 $ 4,950,000.00 \n \n- 20 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2012 \n \nEXHIBIT \"H\" \n \nAt June 30, 2012, payments due by fiscal year which includes principal and interest for these items are as follows: \n \nGeneral Obligation Debt \n \nPrincipal \n \nInterest \n \nFiscal Year Ended June 30: \n \n2013 \n \n$ \n \n4,950,000.00 $ \n \n178,965.00 \n \nNote 10: ON-BEHALF PAYMENTS \n \nThe School District has recognized revenues and costs in the amount of $2,593,887.32 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies. \n \nGeorgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of District Personnel In the amount of $2,524,586.00 \n \nPaid to the Teachers' Retirement System of Georgia For Teachers' Retirement System (TRS) Employer's Cost In the amount of $16,069.32 \n \nOffice of State Treasurer Paid to the Public School Employees' Retirement System For Public School Employees' Retirement (PSERS) Employer's Cost In the amount of $53,232.00 \n \nNote 11: SIGNIFICANT COMMITMENTS \n \nThe following is an analysis of significant outstanding construction or renovation contracts executed by the School District as of June 30, 2012, together with funding available: \n \nProject \n \nUnearned Executed Contracts \n \nFunding Available From State \n \nNew High School and Administration Building \n \n$ 13,887,369.59 $ \n \n6,921,358.00 \n \nThe amounts described in this note are not reflected in the basic financial statements. \n \nNote 12: SIGNIFICANT CONTINGENT LIABILITIES \n \nAmounts 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. \n \nThe School District is a defendant in various legal proceedings pertaining to 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. \n \n- 21 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2012 \n \nEXHIBIT \"H\" \n \nNote 13: SUBSEQUENT EVENTS \nIn the subsequent fiscal year, the School District issued general obligation bonds in the amount of $12,120,000.00. The proceeds from these bonds will be used to (i) acquire, construct and equip replacement school buildings at Franklin County High School, (ii) add to, renovate, repair, improve, acquire and equip school buildings and School District facilities, (iii) acquire miscellaneous new equipment, fixtures and furnishings for the School District, including computer technology equipment, computer software, school buses and other vehicles, transportation and maintenance equipment, and security and safety equipment, (i) acquire land or improve land for new or existing schools and (v) acquire textbooks, e-books and e-book readers for the School District. \nNote 14: POST-EMPLOYMENT BENEFITS \nGeorgia School Personnel Post-employment Health Benefit Fund \nPlan 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 Fund provides health insurance benefits to eligible former employees and their qualified beneficiaries through the State Employees Health Benefit Plan administered by the Department of Community Health. The Official Code of Georgia Annotated (O.C.G.A.) 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). The Department of Community Health, which includes the School OPEB Fund, issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts. \nFunding 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. For members with fewer than five years of service as of January 1, 2012, contributions also vary based on years of service. On average, members with five years or more of service as of January 1, 2012, pay approximately 25 percent of the cost of the health insurance coverage. In accordance with the Board resolution dated December 8, 2011, for members with fewer than five years of service as of January 1, 2012, the State provides a premium subsidy in retirement that ranges from 0% for fewer than 10 years of service to 75% (but no greater than the subsidy percentage offered to active employees) for 30 or more years of service. The subsidy for eligible dependents ranges from 0% to 55% (but no greater than the subsidy percentage offered to dependents of active employees minus 20%). No subsidy is available to Medicare eligible members not enrolled in a Medicare Advantage Option. The Board of Community Health sets all member premiums by resolution and in accordance with the law and applicable revenue and expense projections. Any subsidy policy adopted by the Board may be changed at any time by Board resolution and does not constitute a contract or promise of any amount of subsidy. \nParticipating 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. \n \n- 22 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2012 \n \nEXHIBIT \"H\" \n \nThe 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, 2012: \n \nFor certificated teachers, librarians and regional educational service agencies and certain other eligible participants: \n \nJune 2011 July 2011 August 2011 - March 2012 April 2012 - June 2012 \n \n1.429% of covered payroll for July coverage 18.534% of covered payroll for August coverage 24.000% of covered payroll for September - April coverage \n3.958% of covered payroll for May - July coverage \n \nFor non-certificated school personnel: \n \nJuly 2011 - August 2011 \n \n$246.20 per member per month \n \nSeptember 2011 - June 2012 $296.20 per member per month \n \nNo additional contribution was required by the Board for fiscal year 2012 nor contributed to the School OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the School plan for other post-employment benefits and are subject to appropriation. \n \nThe School District's combined active and retiree contributions to the health insurance plans, which \n \nequaled the required contribution, for the current fiscal year and the preceding two fiscal years were as follows: \n \nPercentage \n \nRequired \n \nFiscal Year \n \nContributed \n \nContribution \n \n2012 2011 2010 \n \n100% \n \n$ \n \n100% \n \n$ \n \n100% \n \n$ \n \n3,506,248.56 3,217,896.09 2,952,658.96 \n \nNote 15: RETIREMENT PLANS \n \nTEACHERS' RETIREMENT SYSTEM OF GEORGIA (TRS) \nPlan 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. \n \nOn 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. \n \n- 23 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2012 \n \nEXHIBIT \"H\" \n \nTRS 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 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service. \nNormal 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 40 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 30 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. \nFunding Policy. TRS is funded by member and employer contributions as adopted and amended by the Board of Trustees. Members become fully vested after 10 years of service. If a member terminates with less than 10 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, 2012, were 5.53% of annual salary. The member contribution rate will increase to 6.00% effective July 1, 2012. Employer contributions required for fiscal year 2012 were 10.28% of annual salary as required by the June 30, 2009, actuarial valuation. The employer contribution rate will increase to 11.41% effective July 1, 2012. \nEmployer contributions for the current fiscal year and the preceding two fiscal years are as follows: \n \nFiscal Year \n \nPercentage Contributed \n \nRequired Contribution \n \n2012 2011 2010 \n \n100% \n \n$ \n \n100% \n \n$ \n \n100% \n \n$ \n \n1,835,658.64 1,887,110.62 1,840,590.05 \n \nPUBLIC SCHOOL EMPLOYEES' RETIREMENT SYSTEM (PSERS) \nBus drivers, lunchroom personnel, and maintenance and custodial personnel are members of the Public School Employees' Retirement System of Georgia. The System is funded by contributions by the employees and by the State of Georgia. The School District makes no contribution to this plan. \nDEFINED CONTRIBUTION PLAN \nThe Franklin County Board of Education maintains an employer paid 403(b) annuity plan for the group of employees covered under the Public School Employees' Retirement System (PSERS). Recognizing that PSERS was a limited defined contribution and defined benefit plan which did not provide for an adequate retirement for this group of employees, it was the Board's desire to supplement the retirement of this group. \n \n- 24 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2012 \n \nEXHIBIT \"H\" \n \nThe Board selected Lincoln as the provider of this plan. For each employee covered under PSERS, the Board contributes to the plan an amount equal to the amount contributed by the employee not to exceed $25.00 per employee per month. \nThe employee becomes vested in the plan with 5 years of experience. Employees who had already achieved 5 years of experience at the time the plan was implemented were vested upon enrollment. \nFunds accumulated in the employer paid accounts are only available to the employee upon termination of employment and 5 years of service to Franklin County Board of Education. If an employee terminates employment prior to achieving 5 years of service, funds paid on behalf of the non-vested employee are credited back to the Board. Funds are vested at 20% per year of service. \nThe provider for the plan has not changed since its inception. \nEmployer contributions for the current fiscal year and the preceding two fiscal years are as follows: \n \nFiscal Year \n \nPercentage Contributed \n \nRequired Contribution \n \n2012 2011 2010 \n \n100% \n \n$ \n \n100% \n \n$ \n \n100% \n \n$ \n \n18,745.00 19,315.00 18,862.50 \n \n- 25 - \n \n (This page left intentionally blank) \n \n FRANKLIN COUNTY BOARD OF EDUCATION GENERAL FUND \nSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL \nYEAR ENDED JUNE 30, 2012 \n \nSCHEDULE \"1\" \n \nREVENUES \nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous \nTotal Revenues \nEXPENDITURES \nCurrent 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 Food Services Operation \nDebt Service \nTotal Expenditures \nExcess of Revenues over (under) Expenditures \nOTHER FINANCING SOURCES (USES) \nOther Sources Transfers Out \nTotal Other Financing Sources (Uses) \nNet Change in Fund Balances \nFund Balances - Beginning \nAdjustments \n \nNONAPPROPRIATED BUDGETS \n \nORIGINAL (1) \n \nFINAL (1) \n \nACTUAL AMOUNTS \n \nVARIANCE OVER/UNDER \n \n$ 8,887,268.00 $ 8,887,268.00 $ 9,299,666.97 $ \n \n147,501.06 \n \n16,771,804.00 17,177,280.26 17,126,192.87 \n \n2,624,523.00 \n \n4,135,919.46 \n \n3,594,883.64 \n \n61,000.00 \n \n555,340.00 \n \n578,360.85 \n \n50,000.00 \n \n52,000.00 \n \n30,181.70 \n \n30,000.00 \n \n30,000.00 \n \n888,386.02 \n \n412,398.97 147,501.06 -51,087.39 -541,035.82 \n23,020.85 -21,818.30 858,386.02 \n \n$ 28,424,595.00 $ 30,837,807.72 $ 31,665,173.11 $ 827,365.39 \n \n$ 19,973,563.09 $ 20,234,998.76 $ 20,068,780.99 $ 166,217.77 \n \n916,086.85 1,569,038.38 \n678,112.89 403,296.16 1,991,331.77 234,385.33 2,093,878.67 1,718,934.68 \n49,000.00 179,703.85 \n1,578,711.99 \n \n1,077,120.20 1,665,899.80 \n673,505.28 434,581.08 2,038,820.15 235,151.34 2,239,742.86 1,740,720.57 \n49,000.00 223,822.85 \n1,555,036.27 \n \n1,005,495.61 1,370,244.99 \n716,171.36 383,527.52 1,997,723.70 429,917.42 2,142,091.14 1,798,300.27 \n49,340.27 210,948.90 371,646.00 1,499,320.74 \n11,496.10 \n \n71,624.59 295,654.81 -42,666.08 \n51,053.56 41,096.45 -194,766.08 97,651.72 -57,579.70 \n-340.27 12,873.95 -371,646.00 55,715.53 -11,496.10 \n \n$ 31,386,043.66 $ 32,168,399.16 $ 32,055,005.01 $ 113,394.15 \n \n$ -2,961,448.66 $ -1,330,591.44 $ -389,831.90 $ 940,759.54 \n \n$ \n \n52,963.00 $ \n \n52,963.00 \n \n$ -52,963.00 \n \n-24,000.00 \n \n-24,000.00 $ \n \n-18,468.00 \n \n5,532.00 \n \n$ \n \n28,963.00 $ \n \n28,963.00 $ \n \n-18,468.00 $ -47,431.00 \n \n$ -2,932,485.66 $ -1,301,628.44 $ -408,299.90 $ 893,328.54 \n \n3,742,212.29 \n \n3,739,580.44 \n \n3,750,113.80 \n \n10,533.36 \n \n-196.98 \n \n1,004.31 \n \n-1,004.31 \n \nFund Balances - Ending \n \n$ 809,529.65 $ 2,438,956.31 $ 3,341,813.90 $ 902,857.59 \n \nNotes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual \n(1) Original and Final Budget amounts do not include budgeted revenues or expenditures of the various principal accounts. The actual revenues and expenditures of the various principal accounts are $738,303.71 and $727,749.62, respectively. \nThe accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements. \n \nSee notes to the basic financial statements. \n \n- 27 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \nYEAR ENDED JUNE 30, 2012 \n \nSCHEDULE \"2\" \n \nFUNDING AGENCY PROGRAM/GRANT \nAgriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program \nTotal U. S. Department of Agriculture \nEducation, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Special Education ARRA - Grants to States ARRA - Preschool Grants Grants to States Preschool Grants \nTotal Special Education Cluster \nTitle I, Part A Cluster Pass-Through From Georgia Department of Education ARRA - Title I Grants to Local Educational Agencies Title I Grants to Local Educational Agencies \nTotal Title I, Part A Cluster \nOther Programs Pass-Through From Georgia Department of Education Career and Technical Education - Basic Grants to States Education Jobs Fund English Language Acquisition Grants Improving Teacher Quality State Grants Migrant Education - State Grant Program Rural Education \nTotal Other Programs \nTotal U. S. Department of Education \n \nCFDA NUMBER \n \nPASSTHROUGH \nENTITY ID \nNUMBER \n \nEXPENDITURES IN PERIOD \n \n* 10.553 * 10.555 \n \nN/A $ $ \n \n(2) 1,447,434.74 (1) \n1,447,434.74 \n \n84.391 84.392 84.027 84.173 \n \nN/A $ N/A N/A N/A \n$ \n \n2,449.08 1,956.28 846,186.34 37,338.50 \n887,930.20 \n \n84.389 84.010 \n \nN/A $ N/A \n$ \n \n19,462.96 1,187,473.71 \n1,206,936.67 \n \n84.048 84.410 84.365 84.367 84.011 84.358 \n \nN/A $ N/A N/A N/A N/A N/A \n$ \n$ \n \n30,464.32 9,329.00 \n13,661.86 138,465.85 \n29,097.07 94,063.93 \n315,082.03 \n2,409,948.90 \n \nTotal Expenditures of Federal Awards \n \n$ \n \nN/A = Not Available \n \nNotes to the Schedule of Expenditures of Federal Awards \n \n(1) Includes the Federally assigned value of donated commodities for the Food Donation Program in the amount of $76,817.16. \n(2) Expenditures for the funds earned on the School Breakfast Program ($242,273.13) were not maintained separately and are included in the 2012 National School Lunch Program. \n \nMajor Programs are identified by an asterisk (*) in front of the CFDA number. \n \nThe School District did not provide Federal Assistance to any Subrecipient. \n \nThe accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Franklin County Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements. \n \n3,857,383.64 \n \nSee notes to the basic financial statements. \n \n- 28 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2012 \nAGENCY/FUNDING \nGRANTS 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 Elementary Grades (4-5) Program Upper Elementary Grades - Early Intervention (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program 20 Days Additional Instruction Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Amended Formula Adjustment Categorical Grants Pupil Transportation Regular Education Equalization Funding Grant Food Services Nursing Services State Health Reimbursement Vocational Supervisors Other State Programs Dual Enrollment Funding Math and Science Supplement Preschool Handicapped Program Pupil Transportation - State Bonds QBE Equalization Teachers' Retirement Virtual Schools Grant Vocational Education \nOffice of State Treasurer Public School Employees' Retirement \nCONTRACT Human Resources, Georgia Department of Family Connection \n \nSee notes to the basic financial statements. \n \n- 29 - \n \nSCHEDULE \"3\" \n \nGOVERNMENTAL FUND TYPE GENERAL FUND \n \n$ \n \n1,070,763.00 \n \n73,405.00 \n \n2,381,276.00 \n \n251,164.00 \n \n1,091,108.00 \n \n257,317.00 \n \n2,097,785.00 \n \n1,633,028.00 \n \n645,612.00 \n \n2,280,747.00 \n \n546,604.00 \n \n200,776.00 \n \n165,015.00 \n \n77,767.00 \n \n355,561.00 \n \n108,267.00 \n \n73,136.00 \n \n496,085.00 763,144.00 906,266.00 -2,899,520.00 \n \n584,573.00 731,200.00 \n51,866.00 69,225.00 2,524,586.00 14,094.00 \n26,797.00 5,941.34 \n97,335.00 152,439.00 \n30,767.00 16,069.32 \n6,425.00 156,799.00 \n \n53,232.00 \n \n29,538.21 \n \n$ 17,126,192.87 \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \nYEAR ENDED JUNE 30, 2012 \n \nSCHEDULE \"4\" \n \nPROJECT \n \nORIGINAL ESTIMATED \nCOST (1) \n \nCURRENT ESTIMATED COSTS (2) \n \nAMOUNT EXPENDED IN CURRENT YEAR (3) (4) (5) \n \nAMOUNT EXPENDED IN PRIOR YEARS (3) (4) (5) \n \nTOTAL COMPLETION \nCOST \n \nEXCESS PROCEEDS NOT \nEXPENDED \n \nESTIMATED COMPLETION \nDATE \n \n2006 SPLOST Locations and Project Identifiers i) Acquiring, constructing, and equipping new school buildings and other buildings and facilities useful or desirable in connection therewith $ \n \n2,500,000.00 $ \n \n2,446,828.01 $ \n \nii) renovating, repairing, improving, and equipping the Old Franklin County Middle School for auxiliary offices, auxiliary education programs, and miscellaneous office space, \niii) acquiring communication equipment and other equipment, including buses and transportation equipment, \n \n2,300,000.00 700,000.00 \n \n1,070,061.04 2,694,408.25 \n \niv) adding to, renovating, repairing, improving and equipping existing school buildings and grounds, agricultural facilities and athletic facilities, and other buildings and facilities useful or desirable in connection therewith, including but not limited to Royston Elementary School, Lavonia Elementary School, Carnesville Elementary School, Franklin County Middle School, Franklin County High School, and Central Franklin Elementary School, \n \n10,000,000.00 \n \n4,921,469.82 \n \nvi) completing any capital outlay projects authorized in connection with the sales and use tax previously in effect. \n \n4,000,000.00 \n \n3,266,117.00 \n \n0.00 $ 0.00 26,161.00 \n715,579.53 0.00 \n \n2,446,828.01 $ 2,446,828.01 $ \n \n1,070,061.04 \n \n1,070,061.04 \n \n2,668,247.25 \n \n2,694,408.25 \n \n4,205,890.29 \n \n4,921,469.82 \n \n3,266,117.00 \n \n3,266,117.00 \n \n0.00 completed 0.00 completed 0.00 completed \n0.00 completed 0.00 completed \n \n$ 19,500,000.00 $ 14,398,884.12 $ 741,740.53 $ 13,657,143.59 $ 14,398,884.12 $ \n \n(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax. \n \n(2) The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion. \n \n(3) The voters of Franklin County approved the imposition of a 1% sales tax to fund the above projects and retire associated debt. Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the projects. \n \n(4) In addition to the expenditures shown above, the School District has incurred interest and related fees to provide advance funding for the above projects as follows: \n \nPrior Years \n \n$ 2,387,457.00 \n \nCurrent Year \n \n333,356.50 \n \nTotal \n \n$ 2,720,813.50 \n \n(5) In addition to the expenditures shown above, the School District has incurred bond issuance cost and related paying agent fees for the above projects as follows: \n \nPrior Years \n \n$ 267,550.80 \n \nCurrent Year \n \n2,867.81 \n \nTotal \n \n$ 270,418.61 \n \n(6) The 2006 SPLOST was underfunded as of June 30, 2012, by $5,101,115.88. The lack of funds is due to the decrease in Sales Taxes experienced during the past 5 years. \n \nSee notes to the basic financial statements. \n \n- 30 - \n \n0.00 \n \n FRANKLIN COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) \nALLOTMENTS AND EXPENDITURES BY PROGRAM YEAR ENDED JUNE 30, 2012 \n \nSCHEDULE \"5\" \n \nDESCRIPTION \nDirect Instructional Programs Kindergarten Program Kindergarten Program-Early Intervention Program Primary Grades (1-3) Program Primary Grades-Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades-Early Intervention (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Category II Category III Category IV Category V Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) \nTOTAL DIRECT INSTRUCTIONAL PROGRAMS \nMedia Center Program Staff and Professional Development \nTOTAL QBE FORMULA FUNDS \n \nALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) (2) \n \nELIGIBLE QBE PROGRAM COSTS \n \nSALARIES \n \nOPERATIONS \n \nTOTAL \n \n$ \n \n1,294,004.00 $ 1,485,366.63 $ \n \n20,450.73 $ 1,505,817.36 \n \n83,397.00 \n \n68,374.76 \n \n100.00 \n \n68,474.76 \n \n2,898,336.00 3,514,609.53 \n \n62,447.20 \n \n3,577,056.73 \n \n294,684.00 \n \n80,685.13 \n \n1,377.83 \n \n82,062.96 \n \n1,340,936.00 2,098,069.54 \n \n19,416.31 \n \n2,117,485.85 \n \n288,031.00 2,488,233.00 1,982,867.00 \n785,545.00 2,704,125.00 \n664,276.00 238,036.00 198,064.00 \n95,526.00 \n \n90,307.54 2,844,912.68 2,749,896.82 \n710,496.16 \n41,022.36 328,824.02 1,649,995.10 145,580.63 \n18,007.41 446,652.86 \n70,980.84 293,107.03 181,925.75 \n \n948.46 45,633.97 52,468.66 64,123.03 \n1,219.15 890.14 \n189,118.81 7,669.09 7,380.59 6,511.64 818.43 6,604.05 \n \n91,256.00 2,890,546.65 2,802,365.48 \n774,619.19 \n42,241.51 329,714.16 1,839,113.91 153,249.72 \n25,388.00 453,164.50 \n71,799.27 299,711.08 181,925.75 \n \n$ \n \n15,356,060.00 $ 16,818,814.79 $ 487,178.09 $ 17,305,992.88 \n \n428,792.00 87,994.00 \n \n593,667.30 \n \n40,437.67 \n \n634,104.97 72,778.61 \n \n$ \n \n15,872,846.00 $ 17,412,482.09 $ 527,615.76 $ 18,012,876.46 \n \n(1) Comprised of State Funds plus Local Five Mill Share. (2) Allotments do not include the impact of the State amended formula adjustment. \n \nSee notes to the basic financial statements. \n \n- 31 - \n \n  SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS \n \n  Greg S. Griffin \nSTATE AUDITOR \n(404) 656-2174 \n \nDEPARTMENT OF AUDITS AND ACCOUNTS \n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \nJune 27, 2013 \n \nHonorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education \nand Superintendent and Members of the Franklin County Board of Education \nINDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS \nLadies and Gentlemen: \nWe have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Franklin County Board of Education as of and for the year ended June 30, 2012, which collectively comprise Franklin County Board of Education's basic financial statements and have issued our report thereon dated June 27, 2013. 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. \nInternal Control Over Financial Reporting \nManagement of Franklin County Board of Education is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered Franklin County Board of Education's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Franklin County Board of Education's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Franklin County Board of Education's internal control over financial reporting. \nA 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. \n \n2012YB-10 \n \n  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. \nCompliance and Other Matters \nAs part of obtaining reasonable assurance about whether Franklin County 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. \nWe noted certain matters that we have reported to management of Franklin County Board of Education in a separate letter dated June 27, 2013. \nThis report is intended solely for the information and use of management, members of the Franklin County 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. \nRespectfully submitted, \n \nGSG:as 2012YB-10 \n \nGreg S. Griffin State Auditor \n \n  Greg S. Griffin \nSTATE AUDITOR \n(404) 656-2174 \n \nDEPARTMENT OF AUDITS AND ACCOUNTS \n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \nJune 27, 2013 \n \nHonorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education \nand Superintendent and Members of the Franklin County Board of Education \nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 \nLadies and Gentlemen: \nCompliance \nWe have audited Franklin County 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, 2012. Franklin County 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 Franklin County Board of Education's management. Our responsibility is to express an opinion on Franklin County Board of Education's compliance based on our audit. \nWe 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 Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Franklin County 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 Franklin County Board of Education's compliance with those requirements. \nIn our opinion, the Franklin County Board of Education complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major Federal programs for the year ended June 30, 2012. \n \n2012SA-10 \n \n  Internal Control Over Compliance \nManagement of Franklin County 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 Franklin County 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 procedures for 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 Franklin County Board of Education's internal control over compliance. \nA 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 compliance 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. \nOur 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. \nThis report is intended solely for the information and use of management, members of the Franklin County 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. \nRespectfully submitted, \n \nGSG:as 2012SA-10 \n \nGreg S. Griffin State Auditor \n \n  SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS \n \n  FRANKLIN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2012 \nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. \n \n  SECTION IV FINDINGS AND QUESTIONED COSTS \n \n  FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2012 \n \nI SUMMARY OF AUDITOR'S RESULTS \n \nFinancial Statements \n \nType of auditor's report issue: Governmental Activities; General Fund; Capital Projects Fund; Debt Service Fund; Aggregate Remaining Fund Information \n \nUnqualified \n \nInternal control over financial reporting:  Material weakness identified?  Significant deficiency identified? \n \nNo None Reported \n \nNoncompliance material to financial statements noted: \n \nNo \n \nFederal Awards \n \nInternal Control over major programs:  Material weakness identified?  Significant deficiency identified? \n \nNo None Reported \n \nType of auditor's report issued on compliance for major programs: All major programs \n \nUnqualified \n \nAny audit findings disclosed that are required to be reported in \n \naccordance with OMB Circular A-133, Section 510(a)? \n \nNo \n \nIdentification of major programs: CFDA Numbers \n \nName of Federal Program or Cluster \n \n10.553, 10.555 \n \nChild Nutrition Cluster \n \nDollar threshold used to distinguish between Type A and Type B programs: \n \n$300,000.00 \n \nAuditee qualified as low-risk auditee? \n \nYes \n \nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. \n \nIII FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. \n \n "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-be26-bf8-b2010-h2011-belec-p-btext","title":"Franklin County Board of Education, Carnesville, Georgia, annual financial report for the fiscal year ended June 30, 2011 (including independent auditor's reports)","collection_id":"dlg_ggpd","collection_title":"Georgia Government Publications","dcterms_contributor":["Georgia. Department of Audits and Accounts, issuing body."],"dcterms_spatial":["United States, Georgia, 32.75042, -83.50018"],"dcterms_creator":["Georgia. Department of Audits and Accounts"],"dc_date":["2011-06-30"],"dcterms_description":["Began with fiscal year ended June 30, 2009.","Report year covers fiscal year.","Fiscal year ended June 30, 2014 (online surrogate) (Received via FTP 1/14/16 from Georgia Dept. of Audits and Accounts); title from PDF cover (Georgia Government Publications database, viewed February 24, 2023).","Fiscal year ended June 30, 2019 (online surrogate) (Georgia Government Publications database, viewed February 24, 2023)."],"dc_format":["application/pdf"],"dcterms_identifier":null,"dcterms_language":["eng"],"dcterms_publisher":["Atlanta, Ga. : Georgia. Department of Audits and Accounts"],"dc_relation":null,"dc_right":["http://rightsstatements.org/vocab/InC/1.0/"],"dcterms_is_part_of":null,"dcterms_subject":["Franklin County Board of Education (Ga.)--Appropriations and expenditures--Periodicals","Education--Georgia--Franklin County--Auditing--Periodicals","Education--Georgia--Franklin County--Finance--Statistics--Periodicals"],"dcterms_title":["Franklin County Board of Education, Carnesville, Georgia, annual financial report for the fiscal year ended June 30, 2011 (including independent auditor's reports)"],"dcterms_type":["Text"],"dcterms_provenance":["University of Georgia. Map and Government Information Library"],"edm_is_shown_by":["https://dlg.galileo.usg.edu/do:dlg_ggpd_y-ga-ba800-b-pr1-be26-bf8-b2010-h2011-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-be26-bf8-b2010-h2011-belec-p-btext"],"dcterms_temporal":null,"dcterms_rights_holder":["\u0026copy; Georgia Department of Audits"],"dcterms_bibliographic_citation":null,"dlg_local_right":null,"dcterms_medium":["annual reports","state government records","audits","financial records","financial statements"],"dcterms_extent":null,"dlg_subject_personal":null,"iiif_manifest_url_ss":null,"dcterms_subject_fast":null,"fulltext":"FRANKLIN COUNTY BOARD OF EDUCATION \nCARNESVILLE, GEORGIA \nANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2011 \n(Including Independent Auditor's Reports) \n \n FRANKLIN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \n \nSECTION I \n \nFINANCIAL \n \nINDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \n \nREQUIRED SUPPLEMENTARY INFORMATION \n \nMANAGEMENT'S DISCUSSION AND ANALYSIS \n \nEXHIBITS \n \nBASIC FINANCIAL STATEMENTS \n \nDISTRICT-WIDE FINANCIAL STATEMENTS \n \nA \n \nSTATEMENT OF NET ASSETS \n \nB \n \nSTATEMENT OF ACTIVITIES \n \nFUND FINANCIAL STATEMENTS \n \nC \n \nBALANCE SHEET \n \nGOVERNMENTAL FUNDS \n \nD \n \nRECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \n \nTO THE STATEMENT OF NET ASSETS \n \nE \n \nSTATEMENT OF REVENUES, EXPENDITURES AND CHANGES \n \nIN FUND BALANCES \n \nGOVERNMENTAL FUNDS \n \nF \n \nRECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT \n \nOF REVENUES, EXPENDITURES AND CHANGES IN FUND \n \nBALANCES TO THE STATEMENT OF ACTIVITIES \n \nG \n \nSTATEMENT OF FIDUCIARY NET ASSETS \n \nFIDUCIARY FUNDS \n \nH \n \nNOTES TO THE BASIC FINANCIAL STATEMENTS \n \nSCHEDULES \n \nREQUIRED SUPPLEMENTARY INFORMATION \n \n1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND \n \nPage \ni \n1 2 4 5 6 7 8 9 \n25 \n \n  FRANKLIN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \n \nSECTION I \nFINANCIAL \nSCHEDULES \nSUPPLEMENTARY INFORMATION \n2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 3 SCHEDULE OF STATE REVENUE 4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 5 ALLOTMENTS AND EXPENDITURES \nGENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) BY PROGRAM \n \nPage \n26 27 28 29 \n \nSECTION II \nCOMPLIANCE AND INTERNAL CONTROL REPORTS \nINDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS \nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 \n \nSECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS \n \nSECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS \n \n  SECTION I FINANCIAL \n \n  Russell W. Hinton \nSTATE AUDITOR \n(404) 656-2174 \n \nDEPARTMENT OF AUDITS AND ACCOUNTS \n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \nMarch 13, 2012 \n \nHonorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education \nand Superintendent and Members of the Franklin County Board of Education \nINDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \nLadies and Gentlemen: \nWe have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information (Exhibits A through H) of the Franklin County Board of Education, as of and for the year ended June 30, 2011, which collectively comprise the Board's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Franklin County Board of Education's management. Our responsibility is to express opinions on these financial statements based on our audit. \nWe 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. 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 consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Board's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. \nIn 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 Franklin County Board of Education, as of June 30, 2011, 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. \n \n2011ARL-11 \n \n  In accordance with Government Auditing Standards, we have also issued our report dated March 13, 2012, on our consideration of the Franklin County 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 Auditing Standards and should be considered in assessing the results of our audit. \nManagement's Discussion and Analysis and the Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on pages i through viii and page 25 respectively, are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. 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, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. \nOur audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Franklin County 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-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole. \nA 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. \nRespectfully submitted, \n \nRWH:as 2011ARL-11 \n \nRussell W. Hinton, CPA, CGFM State Auditor \n \n  FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2011 \nINTRODUCTION \nOur discussion and analysis of the Franklin County School District's financial performance provides an overview of the School District's financial activities for the fiscal year ended June 30, 2011. The intent of this discussion and analysis is to look at the School District's financial performance as a whole. We encourage our readers to also review the transmittal letter, notes to the basic financial statements and financial statements to enhance their understanding of the School District's financial performance. \nFINANCIAL HIGHLIGHTS \nKey financial highlights for fiscal year 2011 are as follows \n On the District-wide financial statements, the assets of the School District exceeded liabilities by $52.2 million. \n The School District had slightly more than $33.8 million in expenses relating to governmental activities; only $22.8 million of these expenses are offset by program specific charges for services, grants and contributions. General revenues (primarily property and sales taxes) of $14.7 million were adequate to provide the remaining funding for these programs. \n As stated above, general revenues accounted for $14.7 million or 39% of all revenues totaling $37.5 million. Program specific revenues in the form of charges for services, grants and contributions accounted for the rest. \nOVERVIEW OF THE FINANCIAL STATEMENTS \nThis annual report consists of three parts; management's discussion and analysis (this section), the basic financial statements and required supplementary information. The basic financial statements include two levels of statements that present different views of the School District. These include the District-wide and fund financial statements. \nThe District-wide financial statements include the 'Statement of Net Assets' and 'Statement of Activities'. These statements provide information about the activities of the School District presenting both short-term and long-term information about the School District's overall financial status. \nThe fund financial statements focus on individual parts of the School District, reporting the School District's operation in more detail. The 'Governmental Funds' statements disclose how basic services are financed in the short-term as well as what remains for future spending. The 'Fiduciary Funds' statements provide information about the financial relationships in which the School District acts solely as a trustee or agent for the benefit of others. In the case of the Franklin County School District, the General Fund, Capital Projects Funds, and Debt Service Funds are all considered to be major funds. The School District has no nonmajor funds as defined by GASB Statement 34 for the purposes of this report. \nThe financial statements also include notes that explain some of the information in the statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and supports the financial statements. Additionally, other supplementary information (not required) is also presented that further supplements understanding of the financial statements. \ni \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2011 \nDistrict-wide Statements \nSince Franklin County School District has no operations that have been classified as \"Business Activities\", the District-wide financial statements are basically a consolidation of all of the School District's operating funds into one column called governmental activities. In reviewing the Districtwide financial statements, a reader might ask the question, are we in a better financial position now than last year? The 'Statement of Net Assets' and the 'Statement of Activities' provides the basis for answering this question. These financial statements include all the School District's assets and liabilities and uses the accrual basis of accounting similar to the accounting used by most privatesector companies. This basis of accounting takes into account all of the current year's revenues and expenses regardless of when cash is received or paid. \nThese two statements report the School District's net assets and any changes in those assets. The change in net assets is important because it tells the reader that, for the School District as a whole, the financial position of the School District has improved or diminished. The causes of this change may be the results of many factors, including those not under the School District's control, such as the property tax base, facility conditions, required educational programs, student-teacher ratios, and other factors. \nThe 'Statement of Net Assets' and the 'Statement of Activities' reflects 100% of the School District's financial activities. \nFund Financial Statements \nThe School District uses many funds or sub-funds to account for a multitude of financial transactions during the fiscal year. The fund financial statements presented in this report provide detail information about only the School District's significant or major funds. As discussed previously, the District has no nonmajor Funds as defined by GASB Statement 34. \nGovernmental Funds  Most of the School District's activities are reported in the governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end available for spending in future periods. These funds are reported using the modified accrual method of accounting which measures cash and all other financial assets that can be readily converted to cash. The governmental fund statements provide a detailed short-term view of the School District's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance educational programs. The differences between government activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental funds are reconciled in the financial statements. \nFiduciary Funds  The School District is the trustee, or fiduciary, for assets that belong to school clubs and other organizations within the principals' accounts. The School District is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. The School District excludes these activities from the District-wide financial statements because it cannot use these assets to finance its operations. \nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT AS A WHOLE \nRecall that the Statement of Net Assets provides the perspective of the School District as a whole. The reader can think of the District's net assets as the difference between its assets (i.e., what the School District owns) and its liabilities (i.e., what the School District owes) at the end of a fiscal year. \nii \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2011 \n \nThis balance represents one way to measure the District's financial health or its financial position. In the case of the Franklin County School District, assets exceeded liabilities by $52.2 million at June 30, 2011. \n \nTo better understand the District's actual financial position and ability to deliver services in future periods, the reader will need to review the various components of the net asset category. For example, of the $52.2 million of net assets, approximately $4.3 million was restricted for continuation of Federal programs, debt service, and completion of certain ongoing capital projects. Accordingly, these funds were not available to meet the District's ongoing obligations to citizens and creditors. \n \nIn addition, the School District also had $46.1 million (net of related debt) invested in capital assets (e.g., land, buildings, and equipment). The School District uses these capital assets to provide educational services to students within geographic boundaries served by the District. Because of the very nature and on-going use of the assets being reported in this component of net assets, it must be recognized that this portion of the net assets is not available for future spending. \n \nTable 1 provides a summary of the School District's net assets for fiscal year 2011 compared to fiscal year 2010. \nTable 1 \nNet Assets \n \nGovernmental Activities \n \nFiscal \n \nFiscal \n \nYear 2011 \n \nYear 2010 \n \nAssets Current and Other Assets Capital Assets, Net \n \n$ 12,260,655.16 $ 11,293,970.30 \n \n53,247,245.25 \n \n53,891,014.69 \n \nTotal Assets \nLiabilities Current and Other Liabilities Long-Term Liabilities \n \n$ 65,507,900.41 $ 65,184,984.99 \n \n$ 4,032,953.23 $ 4,256,387.50 \n \n9,216,003.17 \n \n12,374,506.07 \n \nTotal Liabilities \nNet Assets Invested in Capital Assets, Net of Related Debt Restricted Unrestricted \nTotal Net Assets \n \n$ 13,248,956.40 $ 16,630,893.57 \n \n$ 46,122,046.43 $ 43,645,652.87 \n \n4,341,499.84 \n \n4,339,111.61 \n \n1,795,397.74 \n \n569,326.94 \n \n$ 52,258,944.01 $ 48,554,091.42 \n \nTable 2 shows the Changes in Net Assets for fiscal year 2011 as compared to fiscal year 2010. \n \niii \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2011 \n \nTable 2 Change in Net Assets \nRevenues Program Revenues: Charges for Services and Sales Operating Grants and Contributions Capital Grants and Contributions \nTotal Program Revenues \nGeneral Revenues: Taxes Property Taxes For Maintenance and Operations Railroad Cars Sales Taxes Special Purpose Local Option Sales Tax For Debt Services Intangible Recording Tax Real Estate Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous Transfers \nTotal General Revenues \nTotal Revenues \nProgram Expenses: 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 Operations of Non-Instructional Services Enterprise Operations Food Services Interest on Short-Term and Long-Term Debt \nTotal Expenses \nIncrease in Net Assets \niv \n \nGovernmental Activities \n \nFiscal Year \n \nFiscal Year \n \n2011 \n \n2010 \n \n$ \n \n658,117.07 $ \n \n737,412.29 \n \n21,960,063.92 \n \n21,469,273.00 \n \n228,876.00 \n \n$ 22,847,056.99 $ 22,206,685.29 \n \n$ 9,845,280.20 $ 9,393,326.50 \n \n7,244.98 \n \n6,463.70 \n \n3,106,701.84 107,880.67 24,707.64 \n \n2,930,328.22 110,167.04 17,822.37 \n \n888,437.02 52,190.85 \n719,956.71 3,523.12 \n \n549,456.69 72,034.49 \n894,844.29 9,095.97 \n \n$ 14,755,923.03 $ 13,983,539.27 \n \n$ 37,602,980.02 $ 36,190,224.56 \n \n$ 21,582,710.64 $ 21,917,293.35 \n \n932,373.17 1,432,757.41 \n745,516.55 436,148.85 2,059,049.84 244,172.72 2,192,128.24 1,714,537.98 \n44,955.40 218,356.95 \n \n960,180.83 1,532,885.23 \n764,273.09 462,344.12 2,124,307.01 232,049.75 2,267,714.59 1,869,258.24 \n42,703.17 268,273.90 \n \n405,060.34 1,475,259.09 \n415,100.25 \n \n431,727.09 1,591,281.87 \n608,511.97 \n \n$ 33,898,127.43 $ 35,072,804.21 \n \n$ 3,704,852.59 $ 1,117,420.35 \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2011 \n \nGovernmental Activities \nThe Statement of Activities shows the cost of program services and the charges for services and grants offsetting these services. Table 3 shows, for governmental activities, the total cost of services and the net cost of services and compares fiscal year 2011 with fiscal year 2010. Net cost of services can be defined as the total cost less fees generated by the activities and intergovernmental revenue provided for specific programs. The net cost reflects the financial burden on the School District's taxpayers by each activity. \nTable 3 Governmental Activities \n \nTotal Cost of Services \n \nFiscal \n \nFiscal \n \nYear 2011 \n \nYear 2010 \n \nNet Cost of Services \n \nFiscal \n \nFiscal \n \nYear 2011 \n \nYear 2010 \n \nInstruction Support Services: \nPupil 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 Operations of Non-Instructional Services: Enterprise Operations Community Services Food Services Interest on Short-Term and Long-Term Debt \n \n$ 21,582,710.64 $ 21,917,293.35 $ 5,495,072.97 $ 6,758,957.72 \n \n932,373.17 1,432,757.41 \n745,516.55 436,148.85 2,059,049.84 244,172.72 2,192,128.24 1,714,537.98 \n44,955.40 218,356.95 \n \n960,180.83 1,532,885.23 \n764,273.09 462,344.12 2,124,307.01 232,049.75 2,267,714.59 1,869,258.24 \n42,703.17 268,273.90 \n \n744,211.98 1,085,538.70 \n253,126.58 -323,471.82 990,961.55 243,406.71 1,043,479.31 753,996.84 \n44,955.40 159,136.75 \n \n719,812.10 951,335.70 264,496.33 -308,158.26 1,055,587.67 231,362.05 1,091,650.06 1,092,287.93 \n42,703.17 203,292.31 \n \n405,060.34 \n1,475,259.09 415,100.25 \n \n431,727.09 \n1,591,281.87 608,511.97 \n \n234,543.45 -2,239.66 \n-86,748.57 415,100.25 \n \n263,371.55 -1,763.80 \n-107,327.58 608,511.97 \n \nTotal Expenses \n \n$ 33,898,127.43 $ 35,072,804.21 $ 11,051,070.44 $ 12,866,118.92 \n \nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT'S FUNDS \n \nThe School District's governmental funds are accounted for using the modified accrual basis of accounting. The governmental funds had total revenues of $37.2 million and total expenditures of $36.4 million during fiscal year 2011. Included in the $36.4 million of expenditures were $95 thousand of Capital Outlay expenditures and $3.41 million in Debt Service. These expenditures were funded primarily through General Obligation Bonds issued in 2006 and 2007 and SPLOST receipts. \n \nGeneral Fund Budgeting Highlights \n \nThe School District's budget is prepared according to Georgia Law. The most significant budgeted fund of the School District is the General Fund. However under the GASB 34 reporting model the General Fund includes more than the \"general fund' described in the Department of Education's \n \nv \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2011 \n \nAccounting Manual. No changes were made to the General Fund budget as described in the Georgia Department of Education Accounting Manual, but amendments were made to other funds included in the broader GASB 34 definition. These amendments were the result of carry over funds and/or changes in tentative allocations. \nFor the General Fund, the final actual revenues of $34.1 were above the final budgeted amounts of $33.8 million by $0.3 million. This difference (final actual vs. final budget) was due to property tax collections which were slightly higher than budgeted due to a higher percentage of delinquent taxes collected in the current fiscal year, increases in state revenue, slight increases in state grant revenue received, and increased miscellaneous local revenue reported. \nThe final actual expenditures of $32.9 were under the final budgeted amount of $33.4 million by $0.5 million. This variance was a result in some salary and benefit expense, and a reduction in improvement of instructional services expenditures. \nCAPITAL ASSETS AND DEBT ADMINISTRATION \nCapital Assets \nAt fiscal year ended June 30, 2011, the School District had $53.2 million invested in capital assets, all in governmental activities. Table 4 reflects a summary of these balances net of accumulated depreciation and compares fiscal year 2011 with fiscal year 2010. \nTable 4 Capital Assets (Net of Depreciation) \n \nGovernmental Activities \n \nFiscal \n \nFiscal \n \nYear 2011 \n \nYear 2010 \n \nLand Construction In Progress Land Improvements Buildings Equipment Intangible Assets \n \n$ 1,338,157.39 $ 65,000.00 \n7,011,610.84 42,581,364.33 \n2,184,372.17 66,740.52 \n \n1,338,157.39 \n7,120,788.89 43,231,621.97 \n2,200,446.44 \n \nTotal \n \n$ 53,247,245.25 $ 53,891,014.69 \n \nAdditional information on the School District's Capital Assets can be found in the Notes to the Financial Statements. \n \nThe School District funded a few capital equipment purchases in fiscal year 2011 and began the design and pre-construction work on the new main building project at the high school. \n \nvi \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2011 \n \nDebt \nAt fiscal year ended June 30, 2011, the School District had $9,205,000.00 in bonds outstanding, and $11,003.17 in other long-term debt. Table 5 summarizes the School District's debt for general obligation bonds and capital leases and compares fiscal year 2011 with fiscal year 2010. \n \nTable 5 Debt at June 30 \n \nGovernmental Activities \n \nFiscal \n \nFiscal \n \nYear 2011 \n \nYear 2010 \n \nCapital Leases Bonds Payable \n \n$ \n \n11,003.17 $ \n \n199,506.07 \n \n9,205,000.00 \n \n12,175,000.00 \n \nTotal \n \n$ 9,216,003.17 $ 12,374,506.07 \n \nAdditional information can be found on the School District's debt in the Notes to the Financial Statements. \nCURRENT ISSUES \n \nCurrently known facts, decisions or conditions that are expected to have a significant effect on financial positions or results of operations in future years are as follows: \n State QBE Revenue Reductions  During the current fiscal year the State of Georgia again implemented statewide austerity reductions to all School Districts. Franklin County's QBE funding was reduced by $2,763,341. The School District did receive $671,000 in Federal Education Job Fund dollars that help offset some of the austerity. The austerity cut for fiscal year 2012 is $2,867,561 and the austerity cuts are expected to continue at the same rate in fiscal year 2013. The austerity cuts could be repeated in future years until the state and local economy grows. This shifting of financial responsibility to the local property taxpayer puts a burden on local leadership as it tries to communicate these changes to its electorate. Despite these challenges, the Franklin County School District is strong financially, and we remain optimistic about the ability of the School District to maximize all of the financial resources to provide a quality education to our students. \n Capital Improvements  The School District plans capital improvements as future capital needs arise due to increased student population and facility repair and maintenance needs. Specific capital expenditure plans are formalized in conjunction with individual general obligation bond issues and anticipated annual receipts of capital outlay funds from the State of Georgia Department of Education. The School District regularly monitors anticipated capital outlay needs, and prioritizes those needs so as to best utilize available funding. On March 15, 2011, the Franklin County voters approved the continuation of the Special Purpose Local Option Sales Tax (SPLOST). The SPLOST is a one cent per dollar sales tax and is to be used for capital projects in the Franklin County School District. The majority of these tax proceeds will be used to replace the main building at the Franklin County High School. This project will be funded with State capital outlay funds and the proceeds of the SPLOST proceeds collected from 2013-2018. \n \nvii \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2011 CONTACTING THE SCHOOL DISTRICT'S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, investors and creditors with a general overview of the School District's finances and to show the School District's accountability for the money it receives. If you have questions about this report or need additional financial information, contact Mr. Matt McRee, Finance Director for Franklin County School District, 280 Busha Road, Carnesville, Georgia 30521. You may also email your questions to Mr. McRee at mmcree@franklin.k12.ga.us. \nviii \n \n FRANKLIN COUNTY BOARD OF EDUCATION \n \n  FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF NET ASSETS JUNE 30, 2011 \nASSETS \nCash and Cash Equivalents Investments Accounts Receivable, Net \nTaxes State Government Federal Government Local Other Inventories Capital Assets, Non-Depreciable Capital Assets, Depreciable (Net of Accumulated Depreciation) \nTotal Assets \nLIABILITIES \nAccounts Payable Salaries and Benefits Payable Payroll Withholdings Payable Interest Payable Long-Term Liabilities \nDue Within One Year Due in More Than One Year \nTotal Liabilities \nNET ASSETS \nInvested in Capital Assets, Net of Related Debt Restricted for \nContinuation of Federal Programs Debt Service Capital Projects Unrestricted \nTotal Net Assets \nTotal Liabilities and Net Assets \n \nEXHIBIT \"A\" \n \nGOVERNMENTAL ACTIVITIES \n \n$ \n \n4,476,021.98 \n \n3,741,647.17 \n \n1,073,414.03 2,318,287.61 \n627,206.92 4,626.15 673.27 \n18,778.03 1,403,157.39 51,844,087.86 \n \n$ \n \n65,507,900.41 \n \n$ \n \n115,102.92 \n \n3,831,479.03 \n \n2,703.53 \n \n83,667.75 \n \n4,266,003.17 4,950,000.00 \n \n$ \n \n13,248,956.40 \n \n$ \n \n46,122,046.43 \n \n330,690.36 3,517,039.61 \n493,769.87 1,795,397.74 \n \n$ \n \n52,258,944.01 \n \n$ \n \n65,507,900.41 \n \nThe notes to the basic financial statements are an integral part of this statement. - 1 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES \nFOR THE YEAR ENDED JUNE 30, 2011 \n \nGOVERNMENTAL ACTIVITIES \nInstruction Support Services \nPupil 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 Operations of Non-Instructional Services Enterprise Operations Community Services Food Services Interest on Short-Term and Long-Term Debt \nTotal Governmental Activities \nGeneral Revenues Taxes Property Taxes For Maintenance and Operations Railroad Cars Sales Taxes Special Purpose Local Option Sales Tax For Debt Services Other Sales Tax Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous \nSpecial Items Transfers \nTotal General Revenues and Special Items \nChange in Net Assets \nNet Assets - Beginning of Year \nNet Assets - End of Year \n \nEXPENSES \n \nCHARGES FOR SERVICES \n \n$ \n \n21,582,710.64 $ \n \n932,373.17 1,432,757.41 \n745,516.55 436,148.85 2,059,049.84 244,172.72 2,192,128.24 1,714,537.98 \n44,955.40 218,356.95 \n \n405,060.34 \n \n1,475,259.09 415,100.25 \n \n$ \n \n33,898,127.43 $ \n \n14,800.00 \n53,025.00 11,496.33 \n170,516.89 2,239.66 \n406,039.19 658,117.07 \n \nThe notes to the basic financial statements are an integral part of this statement. - 2 - \n \n EXHIBIT \"B\" \n \nPROGRAM REVENUES OPERATING GRANTS AND \nCONTRIBUTIONS \n \nCAPITAL GRANTS AND CONTRIBUTIONS \n \nNET (EXPENSES) REVENUES \nAND CHANGES IN NET ASSETS \n \n$ \n \n16,072,837.67 \n \n188,161.19 347,218.71 492,389.97 759,620.67 1,068,088.29 \n766.01 1,095,623.93 \n720,168.81 $ \n \n59,220.20 \n \n1,155,968.47 \n \n$ \n \n21,960,063.92 $ \n \n$ 228,876.00 228,876.00 $ \n \n-5,495,072.97 \n-744,211.98 -1,085,538.70 \n-253,126.58 323,471.82 -990,961.55 -243,406.71 -1,043,479.31 -753,996.84 -44,955.40 -159,136.75 \n-234,543.45 2,239.66 \n86,748.57 -415,100.25 \n-11,051,070.44 \n \n$ \n \n9,845,280.20 \n \n7,244.98 \n \n3,106,701.84 132,588.31 888,437.02 52,190.85 719,956.71 \n \n3,523.12 \n \n$ \n \n14,755,923.03 \n \n$ \n \n3,704,852.59 \n \n48,554,091.42 \n \n$ \n \n52,258,944.01 \n \n- 3 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION BALANCE SHEET \nGOVERNMENTAL FUNDS JUNE 30, 2011 \n \nEXHIBIT \"C\" \n \nASSETS \nCash and Cash Equivalents Investments Accounts Receivable, Net \nTaxes State Government Federal Government Local Inventories \nTotal Assets \nLIABILITIES AND FUND BALANCES \nLIABILITIES \nAccounts Payable Salaries and Benefits Payable Payroll Withholdings Payable Deposits and Deferred Revenue \nTotal Liabilities \nFUND BALANCES \nNonspendable Restricted Committed Assigned Unassigned \nTotal Fund Balances \nTotal Liabilities and Fund Balances \n \nGENERAL FUND \n \nDISTRICTWIDE \nCAPITAL PROJECTS \nFUND \n \nDEBT SERVICE \nFUND \n \nTOTAL \n \n$ 4,466,383.23 $ 9,638.75 \n \n$ 4,476,021.98 \n \n496,131.12 $ 3,245,516.05 \n \n3,741,647.17 \n \n718,551.34 2,318,287.61 \n627,206.92 4,626.15 673.27 \n18,778.03 \n \n354,862.69 \n \n1,073,414.03 2,318,287.61 \n627,206.92 4,626.15 673.27 \n18,778.03 \n \n$ 8,154,506.55 $ 505,769.87 $ 3,600,378.74 $ 12,260,655.16 \n \n$ 103,102.92 $ 3,831,479.03 2,703.53 467,107.27 \n \n12,000.00 \n \n$ 4,404,392.75 $ 12,000.00 \n \n$ \n \n115,102.92 \n \n3,831,479.03 \n \n2,703.53 \n \n467,107.27 \n \n$ 4,416,392.75 \n \n$ \n \n18,778.03 \n \n311,912.33 $ 493,769.87 $ \n \n421,134.77 \n \n1,551,603.00 \n \n1,446,685.67 \n \n$ 3,600,378.74 \n \n18,778.03 4,406,060.94 \n421,134.77 1,551,603.00 1,446,685.67 \n \n$ 3,750,113.80 $ 493,769.87 $ 3,600,378.74 $ 7,844,262.41 \n \n$ 8,154,506.55 $ 505,769.87 $ 3,600,378.74 $ 12,260,655.16 \n \nThe notes to the basic financial statements are an integral part of this statement. - 4 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUDNS BALANCE SHEET \nTO THE STATEMENT OF NET ASSETS JUNE 30, 2011 \n \nEXHIBIT \"D\" \n \nTotal Fund Balances - Governmental Funds (Exhibit \"C\") \nAmounts reported for Governmental Activities in the Statement of Net Assets are different because: \nCapital Assets used in Governmental Activities are not financial resources and therefore are not reported in the funds. These assets consist of: \nLand Construction in Progress Land Improvements Buildings Equipment Intangible Assets Accumulated Depreciation \nTotal Capital Assets \nTaxes that are not available to pay for current period expenditures are deferred in the funds. \nProperty Taxes \nLong-Term Liabilities, including Bonds Payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. Long-Term Liabilities at year-end consist of: \nBonds Payable Accrued Interest Capital Leases Payable \nTotal Long-Term Liabilities \nNet Assets of Governmental Activities (Exhibit \"A\") \n \n$ 7,844,262.41 \n \n$ 1,338,157.39 65,000.00 \n7,675,786.19 50,113,066.70 \n5,396,644.98 105,379.62 \n-11,446,789.63 \n \n53,247,245.25 \n \n467,107.27 \n \n$ -9,205,000.00 -83,667.75 -11,003.17 \n \n-9,299,670.92 \n \n$ 52,258,944.01 \n \nThe notes to the basic financial statements are an integral part of this statement. - 5 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES \nGOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2011 \n \nEXHIBIT \"E\" \n \nREVENUES \nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous \nTotal Revenues \nEXPENDITURES \nCurrent 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 Food Services Operation \nCapital Outlay Debt Services \nPrincipal Interest \nTotal Expenditures \nExcess of Revenues over (under) Expenditures \nOTHER FINANCING SOURCES (USES) \nTransfers In Transfers Out \nTotal Other Financing Sources (Uses) \nNet Change in Fund Balances \nFund Balances - Beginning \nFund Balances - Ending \n \nGENERAL FUND \n \nDISTRICTWIDE \nCAPITAL PROJECTS \nFUND \n \nDEBT SERVICE \nFUND \n \nTOTAL \n \n$ 9,546,883.33 132,588.31 \n18,277,285.55 4,800,091.39 658,117.07 43,814.57 $ 719,956.71 \n$ 34,178,736.93 $ \n \n$ 1,240.59 \n \n$ 3,106,701.84 \n7,135.69 \n \n9,546,883.33 3,239,290.15 18,277,285.55 4,800,091.39 \n658,117.07 52,190.85 \n719,956.71 \n \n1,240.59 $ 3,113,837.53 $ 37,293,815.05 \n \n$ 20,906,171.47 \n \n$ 20,906,171.47 \n \n932,373.17 1,432,757.41 \n730,094.69 436,148.85 2,012,253.51 219,824.92 $ 2,184,840.88 1,768,504.07 \n44,955.40 218,356.95 405,060.35 1,437,493.67 \n \n2,493.75 14,124.00 \n95,191.45 \n \n932,373.17 1,432,757.41 \n730,094.69 436,148.85 2,012,253.51 222,318.67 2,184,840.88 1,782,628.07 \n44,955.40 218,356.95 405,060.35 1,437,493.67 \n95,191.45 \n \n181,012.90 6,103.20 \n \n$ 2,970,000.00 441,910.00 \n \n3,151,012.90 448,013.20 \n \n$ 32,915,951.44 $ 111,809.20 $ 3,411,910.00 $ 36,439,670.64 \n \n$ 1,262,785.49 $ -110,568.61 $ -298,072.47 $ \n \n854,144.41 \n \n$ \n \n3,523.12 $ 18,468.00 \n \n-18,468.00 \n \n$ \n \n21,991.12 \n \n-18,468.00 \n \n$ \n \n-14,944.88 $ 18,468.00 \n \n$ \n \n3,523.12 \n \n$ 1,247,840.61 $ -92,100.61 $ -298,072.47 $ \n \n857,667.53 \n \n2,502,273.19 \n \n585,870.48 \n \n3,898,451.21 \n \n6,986,594.88 \n \n$ 3,750,113.80 $ 493,769.87 $ 3,600,378.74 $ 7,844,262.41 \n \nThe notes to the basic financial statements are an integral part of this statement. - 6 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF \nREVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES \nFOR THE YEAR ENDED JUNE 30, 2011 \n \nEXHIBIT \"F\" \n \nTotal Net Change in Fund Balances - Governmental Funds (Exhibit \"E\") \nAmounts reported for Governmental Activities in the Statement of Activities are different because: \nCapital Outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activities, the cost of Capital Assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are: \nCapital Outlay Depreciation Expense \nExcess of Capital Outlay over Depreciation Expense \nTaxes reported in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. \nRepayment of Long-Term Debt is reported as an expenditure in Governmental Funds, but the repayment reduces Long-Term Liabilities in the Statement of Net Assets. In the current year, these amounts consist of: \nBond Principal Retirements Capital Lease Payments \nTotal Long-Term Debt Repayments \nInterest expense reported in the Statement of Activities is recorded as incurred, whereas interest expense in the governmental fund statements is reported when paid. \nChange in Net Assets of Governmental Activities (Exhibit \"B\") \n \n$ \n \n857,667.53 \n \n$ 427,497.62 -1,071,267.06 \n \n-643,769.44 305,641.85 \n \n$ 2,970,000.00 188,502.90 \n \n3,158,502.90 \n \n26,809.75 \n \n$ 3,704,852.59 \n \nThe notes to the basic financial statements are an integral part of this statement. - 7 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30, 2011 \nASSETS Cash and Cash Equivalents \nLIABILITIES Funds Held for Others \n \nEXHIBIT \"G\" \nAGENCY FUNDS $ 127,078.07 \n$ 127,078.07 \n \nThe notes to the basic financial statements are an integral part of this statement. - 8 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2011 \n \nEXHIBIT \"H\" \n \nNOTE 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY \nREPORTING ENTITY \nThe Franklin County 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. \nNOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES \nBASIS OF PRESENTATION \nThe 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 Franklin County Board of Education. \nDistrict-wide Statements: \nThe 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. \nThe Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities. \n Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of 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. \n 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. \nFund Financial Statements: \nThe 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. All remaining governmental funds are aggregated and reported as nonmajor funds. \nThe School District reports the following major governmental funds: \n General Fund is the School District's primary operating fund. It accounts for and reports all financial resources not accounted for and reported in another fund. \n District-wide Capital Projects Fund accounts for and reports financial resources including Special Purpose Local Option Sales Tax (SPLOST) that are restricted, committed or assigned to the expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets. \n \n- 9 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2011 \n \nEXHIBIT \"H\" \n \n Debt Service Fund accounts for and reports financial resources that are restricted, committed, or assigned including taxes (sales) legally restricted for the payment of general long-term principal and interest. \nThe School District reports the following fiduciary fund type: \n Agency funds account for assets held by the School District as an agent for various funds, governments or individuals. \nBASIS OF ACCOUNTING \nThe basis of accounting determines when transactions are reported on the financial statements. The District-wide governmental (governmental and fiduciary) 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 is recognized in the fiscal year in which all eligibility requirements have been satisfied. \nThe 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. \nGovernmental 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, except for principal and interest on general long-term debt, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities and acquisitions under capital leases are reported as other financing sources. \nThe 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. \nThe State of Georgia reimburses the School System 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 1 through August 31. In accordance with the respective rules and regulations of the QBE program, the State of Georgia reimburses the School System 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 System recognizes the same QBE as a receivable and revenue, consistent with symmetrical recognition. \n \n- 10 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2011 \n \nEXHIBIT \"H\" \n \nNEW ACCOUNTING PRONOUNCEMENTS \nIn fiscal year 2011, the School District adopted the Governmental Accounting Standards Board (GASB) Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. The provisions of this Statement establish accounting and financial reporting standards for all governments that report governmental funds. It establishes criteria for classifying fund balances into specifically defined classifications and clarifies definitions for governmental funds. \nCASH AND CASH EQUIVALENTS Composition of Deposits \nCash 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. \nINVESTMENTS Composition of Investments \nInvestments 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 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: \n1. Obligations issued by the State of Georgia or by other states, \n2. Obligations issued by the United States government, \n3. Obligations fully insured or guaranteed by the United States government or a United States government agency, \n4. Obligations of any corporation of the United States government, \n5. Prime banker's acceptances, \n6. The Georgia Fund 1 administered by the State of Georgia, Office of the State Treasurer, \n7. Repurchase agreements, and \n8. Obligations of other political subdivisions of the State of Georgia. \nThe School District does not have a formal policy regarding investment policies that address credit risks, concentration of credit risks, interest rate risks or foreign currency risks. \nRECEIVABLES \nReceivables 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. \n \n- 11 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2011 \n \nEXHIBIT \"H\" \n \nPROPERTY TAXES \nThe Franklin County Board of Commissioners fixed the property tax levy for the 2010 tax digest year (calendar year) on July 16, 2010 (levy date). Taxes were due on November 15, 2010 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2010 tax digest are reported as revenue in the governmental funds for fiscal year 2011. The Franklin County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2011, for maintenance and operations amounted to $9,539,638.35. \nThe tax millage rate levied for the 2010 tax year (calendar year) for the Franklin County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value): \n \nSchool Operations \n \n14.868 mills \n \nSALES TAXES \n \nSpecial Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $3,106,701.84 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years. \n \nINVENTORIES \n \nFood Inventories \n \nOn 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. \n \nCAPITAL ASSETS \n \nCapital 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. \n \n- 12 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2011 \n \nEXHIBIT \"H\" \n \nCapitalization thresholds and estimated useful lives of capital assets reported in the District-wide \n \nstatements are as follows: \n \nCapitalization \n \nEstimated \n \nPolicy \n \nUseful Life \n \nLand Land Improvements Buildings and Improvements Equipment Intangible Assets \n \nAny Amount $ 10,000.00 $ 20,000.00 $ 5,000.00 $ 20,000.00 \n \nN/A 20 to 80 years 25 to 80 years \n5 to 50 years Estimated Life \n \nDepreciation 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. \nAmortization 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, generally 10 to 20 years. \nGENERAL OBLIGATION BONDS \nThe School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. \nIn the District-wide and fund financial statements, the School District recognizes bond premiums and discounts, as well as bond issuance costs during the fiscal year bonds are issued. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. To conform to generally accepted accounting principles, bond premiums and discounts, as well as bond issuance costs should be amortized over the life of the bonds on the District-wide statements. The effect of this deviation is deemed to be immaterial to the fair presentation of the basic financial statements. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the Statement of Net Assets. \nNET ASSETS \nThe School District's net assets in the District-wide Statements are classified as follows: \nInvested in capital assets, net of related debt - This represents the School District's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt. \nRestricted net assets - These represent resources for which the School District is legally or contractually obligated to spend resources for continuation of Federal Programs, debt service and capital projects in accordance with restrictions imposed by external third parties. \nUnrestricted 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. \n \n- 13 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2011 \n \nEXHIBIT \"H\" \n \nFUND BALANCES \n \nThe School District's fund balances are classified as follows: \nNonspendable  Amounts that cannot be spent either because they are in a nonspendable form or because they are legally or contractually required to be maintained intact. \n \nRestricted  Constraints are placed on the use of resources are either (1) externally imposed conditions by creditors, grantors, contributors, or laws and regulations of other governments or (2) imposed by law through constitutional provisions or enabling legislation. \n \nCommitted  Amounts that can be used only for specific purposes pursuant to constraints imposed by formal action of the Board of Education. The Board of Education is the School District's highest level of decision-making authority, and the formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution approved by the Board. Committed fund balance also should incorporate contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements. \nAssigned  Amounts that are constrained by the School District's intent to be used for specific purposes, but are neither restricted nor committed. The intent should be expressed by (1) the Board of Education or (2) the budget or finance committee, or the Superintendent, or designee, to assign amounts to be used for specific purposes. \nUnassigned  The residual classification for the General Fund. This classification represents fund balances that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the General Fund. \n \nFund Balances of the Governmental Funds at June 30, 2011, are as follows: \n \nNonspendable Inventories \nRestricted Continuation of Federal Programs Capital Projects Debt Service \nCommitted School Activity Accounts \nAssigned Subsequent Period Expenditures \nUnassigned \n \n$ \n \n$ \n \n311,912.33 \n \n493,769.87 \n \n3,600,378.74 \n \n18,778.03 \n4,406,060.94 421,134.77 \n1,551,603.00 1,446,685.67 \n \nFund Balance, June 30, 2011 \n \n$ \n \n7,844,262.41 \n \nIt is the goal of the School District to achieve and maintain a committed, assigned, and unassigned fund balance in the general fund at fiscal year end of not less than 5% of revenues, not to exceed 15% of the total budget of the subsequent fiscal year, in compliance with Official Code of Georgia Annotated Section 20-2-167(a)5. If the unassigned fund balance at fiscal year end falls below the goal, the School District shall develop a restoration plan to achieve and maintain the minimum fund balance. \nWhen multiple categories of fund balance are available for expenditure, the School District will start with the most restricted category and spend those funds first before moving down to the next category with available funds. \n \n- 14 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2011 \n \nEXHIBIT \"H\" \n \nUSE OF ESTIMATES \nThe 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. \nNOTE 3: DEPOSITS AND INVESTMENTS \nCOLLATERALIZATION OF DEPOSITS \nOfficial 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 110 percent of the daily pool balance. \nAcceptable security for deposits consists of any one of or any combination of the following: \n1. Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, \n2. Insurance on accounts provided by the Federal Deposit Insurance Corporation, \n3. Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia, \n4. Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, \n5. 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, \n6. Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and \n7. 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. \nCATEGORIZATION OF DEPOSITS \nCustodial 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, 2011, the bank balances were $5,089,998.64. The bank balances were entirely covered by Federal depository insurance or collateralized with securities held by the pledging financial institution's trust department or agent in the School District's name. \n \n- 15 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2011 \n \nEXHIBIT \"H\" \n \nCATEGORIZATION OF INVESTMENTS \nAt June 30, 2011, the carrying value of the School District's total investments was $3,741,647.17, which is materially the same as fair value. This investment consisted entirely of funds invested in the Georgia Fund 1, formerly referred to as LGIP, administered by the State of Georgia, Office of the State Treasurer which are not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office of the State Treasurer for the Georgia Fund 1 (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. Additional information on the Georgia Fund 1 is disclosed in the State of Georgia Comprehensive Annual Financial Report. This audit can be obtained from the Georgia Department of Audits and Accounts at http://www.audits.ga.gov/SGD/cafr.html. \nThe Primary Liquidity Portfolio consists of Georgia Fund 1 which is not registered with the SEC as an investment company but does operate in a manner consistent with the SEC's Rule 2a-7 of the Investment Company Act of 1940. The investment is valued at the pool's share price, $1.00 per share. The pool is an AAAm rated investment pool by Standard and Poor's. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2011, was 59 days. \nNOTE 4: NON-MONETARY TRANSACTIONS \nThe School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 2 - Inventories \nNOTE 5: CAPITAL ASSETS \n \nThe following is a summary of changes in the Capital Assets during the fiscal year: \n \nGovernmental Activities Capital Assets, Not Being Depreciated: \nLand Construction Work In Progress \n \nBalances July 1, 2010 \n \nIncreases \n \nDecreases \n \nBalances June 30, 2011 \n \n$ 1,338,157.39 0.00 $ \n \n$ 65,000.00 \n \n0.00 $ 1,338,157.39 65,000.00 \n \nTotal Capital Assets, Not Being Depreciated $ 1,338,157.39 $ 65,000.00 $ \n \n0.00 $ 1,403,157.39 \n \nCapital Assets, Being Depreciated: Buildings and Improvements Equipment Land Improvements Intangible Assets \n \n$ 50,113,066.70 5,203,896.35 $ 7,675,786.19 \n \n257,118.00 $ 105,379.62 \n \n$ 50,113,066.70 \n \n64,369.37 \n \n5,396,644.98 \n \n7,675,786.19 \n \n105,379.62 \n \nLess: Accumulated Depreciation: Buildings and Improvements Equipment Land Improvements Intangible Assets \n \n6,881,444.73 3,003,449.91 \n554,997.30 \n \n650,257.64 273,192.27 109,178.05 \n38,639.10 \n \n64,369.37 \n \n7,531,702.37 3,212,272.81 \n664,175.35 38,639.10 \n \nTotal Capital Assets, Being Depreciated, Net $ 52,552,857.30 $ -708,769.44 $ \n \n0.00 $ 51,844,087.86 \n \nGovernmental Activity Capital Assets - Net $ 53,891,014.69 $ -643,769.44 $ \n \n0.00 $ 53,247,245.25 \n \n- 16 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2011 \n \nEXHIBIT \"H\" \n \nCapital assets being acquired under capital leases as of June 30, 2011, are as follows: \nGovernmental Funds \n \nEquipment Less: Accumulated Depreciation \n \n$ \n \n375,330.00 \n \n64,577.45 \n \n$ \n \n310,752.55 \n \nCurrent year depreciation expense by function is as follows: \n \nInstruction \n \nSupport Services \n \nEducational Media Services \n \n$ \n \nSchool Administration \n \nBusiness Administration \n \nMaintenance and Operation of Plant \n \nStudent Transportation Services \n \nFood Services \n \n$ \n17,500.48 53,103.75 38,639.10 \n8,269.58 198,485.05 \n \n707,374.66 \n315,997.96 47,894.44 \n \n$ \n \n1,071,267.06 \n \nNOTE 6: INTERFUND TRANSFERS \n \nInterfund transfers for the year ended June 30, 2011, consisted of the following: \n \nTransfer to \n \nTransfers From \n \nGeneral \n \nAgency \n \nFund \n \nFund \n \nGeneral Fund District-wide Capital Projects \n \n$ \n \n$ \n \n18,468.00 \n \n$ \n \n18,468.00 $ \n \n3,523.12 3,523.12 \n \nTransfers are used (1) to move property tax revenues collected by the General Fund to the Districtwide Capital Projects Fund for reimbursement of temporary classrooms and (2) to transfer funds from Agency account balances to the General Fund to reimburse Governmental School Activity Accounts for shared transactions with Agency School Activity Accounts. \nNOTE 7: RISK MANAGEMENT \nThe 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. \nThe School District participates in the Georgia School Boards Association Risk and Insurance Management System, a public entity risk pool organized on July 1, 1994, to develop and administer a plan to reduce risk of loss on account of general liability, motor vehicle liability, or property \n \n- 17 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2011 \n \nEXHIBIT \"H\" \n \ndamage, including safety engineering and other loss prevention and control techniques, and to administer one or more groups of self-insurance funds, including the processing and defense of claims brought against members of the system. The School District pays an annual premium to the system for its general insurance coverage. Additional coverage is provided through agreements by the system with other companies according to their specialty for property, boiler and machinery (including coverage for flood and earthquake), general liability (including coverage for sexual harassment, molestation and abuse), errors and omissions, crime and automobile risks. Payment of excess insurance for the system varies by line of coverage. \n \nThe School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the General Fund with expenses/expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. \n \nChanges in the unemployment compensation claims liability during the last two fiscal years are as follows: \n \nBeginning of Year Liability \n \nClaims and Changes in Estimates \n \nClaims Paid \n \nEnd of Year Liability \n \n2010 $ 2011 $ \n \n0.00 $ 0.00 $ \n \n15,083.33 $ 44,561.00 $ \n \n15,083.33 $ 44,561.00 $ \n \n0.00 0.00 \n \nThe School District participates in the Georgia School Boards Association Workers' Compensation Fund, a public entity risk pool organized on July 1, 1992, 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 Fund for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Fund with the Safety National Casualty Corporation to provide coverage for potential losses sustained by the Fund in excess of $500,000.00 loss per occurrence, up to the statutory limit. Employers' Liability insurance coverage is also provided by Safety National Casualty Corporation to provide coverage for potential losses sustained by the Fund in excess of $500,000.00 loss per occurrence, up to $2,000,000.00. \n \nThe School District has purchased a surety bond to provide additional insurance coverage as follows: \n \nPosition Covered \n \nAmount \n \nSuperintendent \n \n$ \n \n100,000.00 \n \nNOTE 8: LONG-TERM DEBT \nCAPITAL LEASES \nThe Franklin County Board of Education entered into various lease agreements for equipment, buses, and software. These lease agreements qualify as capital leases for accounting purposes, and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception. \n \n- 18 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2011 \n \nEXHIBIT \"H\" \n \nGENERAL OBLIGATION DEBT OUTSTANDING \n \nGeneral Obligation Bonds currently outstanding are as follows: \n \nPurpose \n \nInterest Rates \n \nGeneral Government - Series 2006 General Government - Series 2007 \n \n3.73% 3.46% \n \nAmount \n$ 5,505,000.00 3,700,000.00 \n$ 9,205,000.00 \n \nVoters have authorized $15,000,000.00 in general obligation debt for the replacement of the academic building at Franklin County High School, adding to, renovating, repairing, improving, acquiring and equipping school buildings, acquiring new equipment and technology for the school system, acquiring textbooks and ebooks, repaying a portion of prior debt related to the 2006 and 2007 bonds, and other capital outlay projects which was not issued as of June 30, 2011. \n \nThe changes in Long-Term Debt during the fiscal year ended June 30, 2011, were as follows: \n \nBalance July 1, 2010 \n \nAdditions \n \nGovernmental Funds \n \nBalance \n \nDeductions \n \nJune 30, 2011 \n \nDue Within One Year \n \nG. O. Bonds Capital Leases \n \n$ 12,175,000.00 $ 199,506.07 \n \n0.00 $ 2,970,000.00 $ 9,205,000.00 $ 4,255,000.00 \n \n188,502.90 \n \n11,003.17 \n \n11,003.17 \n \n$ 12,374,506.07 $ \n \n0.00 $ 3,158,502.90 $ 9,216,003.17 $ 4,266,003.17 \n \nAt June 30, 2011, payments due by fiscal year which includes principal and interest for these items are as follows: \n \nFiscal Year Ended June 30: \n \nCapital Leases \n \nPrincipal \n \nInterest \n \n2012 Fiscal Year Ended June 30: \n \n$ \n \n11,003.17 $ \n \n492.93 \n \nGeneral Obligation Debt \n \nPrincipal \n \nInterest \n \n2012 2013 \nTotal Principal and Interest \n \n$ \n \n4,255,000.00 $ \n \n4,950,000.00 \n \n$ \n \n9,205,000.00 $ \n \n333,356.50 178,965.00 \n512,321.50 \n \n- 19 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2011 \n \nEXHIBIT \"H\" \n \nNOTE 9: ON-BEHALF PAYMENTS \nThe School District has recognized revenues and costs in the amount of $110,165.92 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies. \nGeorgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $67,929.20 \nPaid to the Teachers' Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $16,970.72 \nOffice of State Treasurer Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $25,266.00 \nNOTE 10: SIGNIFICANT CONTINGENT LIABILITIES \nAmounts 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. \nThe School District is a defendant in various legal proceedings pertaining to 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. \nNOTE 11: POST-EMPLOYMENT BENEFITS \nGEORGIA SCHOOL PERSONNEL POST-EMPLOYMENT HEALTH BENEFIT FUND \nPlan 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 Fund provides health insurance benefits to eligible former employees and their qualified beneficiaries through the State Employees Health Benefit Plan administered by the Department of Community Health. The Official Code of Georgia Annotated (O.C.G.A.) 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). The Department of Community Health, which includes the School OPEB Fund, issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts. \nFunding 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 the health insurance coverage. \nParticipating 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 \n \n- 20 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2011 \n \nEXHIBIT \"H\" \n \nprojected \"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. \nThe 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, 2011: \nFor certificated teachers, librarians and regional educational service agencies: \n \nJuly 2010 - April 2011 May 2011 - June 2011 \n \n21.955% of covered payroll for August - May Coverage 1.429% of covered payroll for June - July Coverage \n \nFor non-certificated school personnel: \n \nJuly 2010 - December 2010 January 2011 - May 2011 June 2011 \n \n$162.72 per member per month $218.20 per member per month $246.20 per member per month \n \nThe Department of Education was appropriated an additional $25,081,633 for non-certificated personnel health insurance payments. The amount attributable to the School District is reflected in the On-behalf note disclosure. \nNo additional contribution was required by the Board for fiscal year 2011 nor contributed to the School OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the School plan for other post-employment benefits and are subject to appropriation. \n \nThe School District's combined active and retiree contributions to the health insurance plans, which equaled the required contribution, for the current fiscal year and the preceding two fiscal years were as follows: \n \nFiscal Year \n \nPercentage Contributed \n \nRequired Contribution \n \n2011 2010 2009 \n \n100% \n \n$ \n \n100% \n \n$ \n \n100% \n \n$ \n \n3,217,896.09 2,952,658.96 2,286,108.61 \n \nNOTE 12: RETIREMENT PLANS \nTEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) \nPlan 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. \nOn 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. \n \n- 21 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2011 \n \nEXHIBIT \"H\" \n \nTRS 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 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service. \n \nNormal 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 40 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 30 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. \n \nFunding Policy. TRS is funded by member and employer contributions as adopted and amended by the Board of Trustees. Members become fully vested after 10 years of service. If a member terminates with less than 10 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, 2011, were 5.53% of annual salary. The member contribution rate will increase to 6.00% effective July 1, 2012. Employer contributions required for fiscal year 2011 were 10.28% of annual salary as required by the June 30, 2008, actuarial valuation. The employer contribution rate will increase to 11.41% effective July 1, 2012. \n \nEmployer contributions for the current fiscal year and the preceding two fiscal years are as follows: \n \nFiscal Year \n \nPercentage Contributed \n \nRequired Contribution \n \n2011 2010 2009 \n \n100% \n \n$ \n \n100% \n \n$ \n \n100% \n \n$ \n \n1,887,110.62 1,840,590.05 1,759,207.60 \n \nPUBLIC SCHOOL EMPLOYEES' RETIREMENT SYSTEM (PSERS) \nBus drivers, lunchroom personnel, and maintenance and custodial personnel are members of the Public School Employees' Retirement System of Georgia. The System is funded by contributions by the employees and by the State of Georgia. The School District makes no contribution to this plan. \nDEFINED CONTRIBUTION PLAN \nIn August 2000, Franklin County Board of Education began an employer paid 403(b) annuity plan for the group of employees covered under the Public School Employees' Retirement System (PSERS). Recognizing that PSERS was a limited defined contribution and defined benefit plan which did not provide for an adequate retirement for this group of employees, it was the Board's desire to supplement the retirement of this group. \nThe Board selected Lincoln as the provider of this plan. For each employee covered under PSERS, the Board began contributing to the plan an amount equal to the amount contributed by the employee (a match) each month, not to exceed $25.00 per employee per month. \nThe employee becomes vested in the plan with 5 years of experience. Employees who had already achieved 5 years of experience at the time the plan was implemented were vested upon enrollment. \n \n- 22 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2011 \n \nEXHIBIT \"H\" \n \nFunds accumulated in the employer paid accounts are only available to the employee upon termination of employment and 5 years of service to Franklin County Board of Education. If an employee terminates employment prior to achieving 5 years of service, funds paid on behalf of the non-vested employee are credited back to the Board. Funds are vested at 20% per year of service. \n \nThe vendor for the plan has not changed since its inception. \n \nEmployer contributions for the current fiscal year and the preceding two fiscal years are as follows: \n \nFiscal Year \n \nPercentage Contributed \n \nRequired Contribution \n \n2011 2010 2009 \n \n100% \n \n$ \n \n100% \n \n$ \n \n100% \n \n$ \n \n19,315.00 18,862.50 19,580.00 \n \n- 23 - \n \n (This page left intentionally blank) \n \n FRANKLIN COUNTY BOARD OF EDUCATION GENERAL FUND \nSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL \nYEAR ENDED JUNE 30, 2011 \n \nSCHEDULE \"1\" \n \nREVENUES \nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous \nTotal Revenues \nEXPENDITURES \nCurrent 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 Food Services Operation Enterprise Operations \nDebt Service \nTotal Expenditures \nExcess of Revenues over (under) Expenditures \nOTHER FINANCING SOURCES (USES) \nOperating Transfers From Other funds Operating Transfers To Other funds \nTotal Other Financing Sources (Uses) \nNet Change in Fund Balances \nFund Balances - Beginning \nAdjustments \n \nNONAPPROPRIATED BUDGETS \n \nORIGINAL (1) \n \nFINAL (1) \n \nACTUAL AMOUNTS \n \n$ 9,565,004.00 $ 9,469,599.00 $ 9,546,883.33 \n \n132,588.31 \n \n17,667,733.00 \n \n17,936,766.82 \n \n18,277,285.55 \n \n4,359,609.28 \n \n5,808,743.69 \n \n4,800,091.39 \n \n590,282.00 \n \n558,840.00 \n \n658,117.07 \n \n50,500.00 \n \n50,500.00 \n \n43,814.57 \n \n44,930.00 \n \n44,930.00 \n \n719,956.71 \n \n$ 32,278,058.28 $ 33,869,379.51 $ 34,178,736.93 \n \n$ 20,859,398.62 $ 21,259,113.04 $ 20,906,171.47 \n \n855,356.66 1,597,654.85 \n698,532.88 609,997.06 2,002,796.97 254,078.26 2,113,044.86 1,579,564.32 \n52,900.00 173,000.00 1,580,048.45 \n \n992,323.34 1,819,541.75 \n696,032.24 497,678.19 2,015,860.61 255,576.22 2,132,638.37 1,905,787.90 \n52,900.00 244,115.00 1,533,615.84 \n \n932,373.17 1,432,757.41 \n730,094.69 436,148.85 2,012,253.51 219,824.92 2,184,840.88 1,768,504.07 \n44,955.40 218,356.95 1,437,493.67 405,060.35 187,116.10 \n \n$ 32,376,372.93 $ 33,405,182.50 $ 32,915,951.44 \n \n$ \n \n-98,314.65 $ \n \n464,197.01 $ 1,262,785.49 \n \n$ \n \n45,000.00 $ \n \n45,000.00 $ \n \n3,523.12 \n \n-24,000.00 \n \n-24,000.00 \n \n-18,468.00 \n \n$ \n \n21,000.00 $ \n \n21,000.00 $ \n \n-14,944.88 \n \n$ \n \n-77,314.65 $ \n \n485,197.01 $ 1,247,840.61 \n \n2,503,635.92 \n \n2,502,273.19 \n \n2,502,273.19 \n \n-3,138.32 \n \nFund Balances - Ending \n \n$ 2,426,321.27 $ 2,984,331.88 $ 3,750,113.80 \n \nNotes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual \n \n(1) Original and Final Budget amounts do not include budgeted revenues or expenditures of the various principal accounts. \n \nThe accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements. \n \nSee notes to the basic financial statements. \n \n- 25 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \nYEAR ENDED JUNE 30, 2011 \n \nSCHEDULE \"2\" \n \nFUNDING AGENCY PROGRAM/GRANT \nAgriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program \nTotal U. S. Department of Agriculture \nEducation, U. S. Department of Educational Technology State Grants Cluster Pass-Through From Georgia Department of Education Education Technology State Grants \nSpecial Education Cluster Pass-Through From Georgia Department of Education Special Education ARRA - Grants to States Grants to States Preschool Grants \nTotal Special Education Cluster \nTitle I, Part A Cluster Pass-Through From Georgia Department of Education ARRA - Title I Grants to Local Educational Agencies Title I Grants to Local Educational Agencies \nTotal Title I, Part A Cluster \nOther Programs Pass-Through From Georgia Department of Education Career and Technical Education - Basic Grants to States Education Jobs Fund English Language Acquisition Grants Improving Teacher Quality State Grants Rural Education Safe and Drug-Free Schools and Communities - State Grants Twenty-First Century Community Learning Centers \nTotal Other Programs \nTotal U. S. Department of Education \n \nCFDA NUMBER \n \nPASSTHROUGH \nENTITY ID \nNUMBER \n \nEXPENDITURES IN PERIOD \n \n* 10.553 * 10.555 \n \n(2) N/A $ 1,541,892.84 (1) \n$ 1,541,892.84 \n \n84.318 \n \nN/A $ \n \n312.00 \n \n* 84.391 * 84.027 * 84.173 \n \nN/A $ N/A N/A \n \n178,025.40 808,042.14 \n41,434.50 \n \n$ 1,027,502.04 \n \n* 84.389 * 84.010 \n \nN/A $ \n \n102,798.19 \n \nN/A \n \n1,278,378.60 \n \n$ 1,381,176.79 \n \n84.048 * 84.410 \n84.365 84.367 84.358 84.186 84.287 \n \nN/A $ N/A N/A N/A N/A N/A N/A \n \n41,182.20 778,374.00 \n17,212.64 164,897.60 \n45,306.85 7,844.00 \n237,080.80 \n \n$ 1,291,898.09 \n \n$ 3,700,888.92 \n \nTotal Expenditures of Federal Awards \n \n$ 5,242,781.76 \n \nN/A = Not Available \n \nNotes to the Schedule of Expenditures of Federal Awards \n \n(1) Includes the Federally assigned value of donated commodities for the Food Donation Program in the amount of $38,879.09. \n(2) Expenditures for the funds earned on the School Breakfast Program ($249,308.48) were not maintained separately and are included in the 2011 National School Lunch Program. \n \nMajor Programs are identified by an asterisk (*) in front of the CFDA number. \n \nThe School District did not provide Federal Assistance to any Subrecipient. \n \nThe accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Franklin County Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements. \n \nSee notes to the basic financial statements. \n \n- 26 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2011 \nAGENCY/FUNDING \nGRANTS 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 Elementary Grades (4-5) Program Upper Elementary Grades - Early Intervention (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) 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 Nursing Services Vocational Supervisors Education Equalization Funding Grant Food Services Vocational Education Amended Formula Adjustment Other State Programs Dual Enrollment Health Insurance Math and Science Supplement Middle School Graduation Coach Mid-term Adjustment Hold-Harmless Move On When Ready Preschool Handicapped Program Pupil Transportation - State Bonds Teachers' Retirement Virtual Schools Grant \nOffice of State Treasurer Public School Employees Retirement \nCONTRACT Human Resources, Georgia Department of Family Connection \n \nSee notes to the basic financial statements. \n \n- 27 - \n \nSCHEDULE \"3\" \n \nGOVERNMENTAL FUND TYPE GENERAL FUND \n \n$ \n \n1,303,183.00 \n \n44,382.00 \n \n3,018,822.00 \n \n248,997.00 \n \n1,457,834.00 \n \n161,096.00 \n \n2,417,927.34 \n \n2,181,504.66 \n \n817,455.00 \n \n2,457,604.00 \n \n689,180.00 \n \n221,462.00 \n \n192,068.00 \n \n99,893.00 \n \n420,092.00 \n \n130,576.00 \n \n74,185.00 \n \n574,849.00 893,189.00 933,043.00 \n \n596,466.00 70,231.00 14,635.00 \n920,599.00 56,616.00 \n155,739.00 -2,740,308.00 \n7,777.00 67,929.20 43,552.48 \n6,796.00 334,498.00 \n100.00 92,106.00 228,876.00 16,970.72 \n1,150.00 \n \n25,266.00 \n \n40,944.15 \n \n$ \n \n18,277,285.55 \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \nYEAR ENDED JUNE 30, 2011 \n \nSCHEDULE \"4\" \n \nPROJECT \n \nORIGINAL ESTIMATED \nCOST (1) \n \nCURRENT ESTIMATED COSTS (2) \n \nAMOUNT EXPENDED IN CURRENT YEAR (3) (4) (5) \n \nAMOUNT EXPENDED IN PRIOR YEARS (3) (4) (5) \n \nPROJECT STATUS \n \n2006 SPLOST Locations and Project Identifiers \n \ni) Acquiring, constructing, and equipping new school \n \nbuildings and other buildings and facilities useful or \n \ndesirable in connection therewith \n \n$ \n \nii) renovating, repairing, improving, and equipping the Old Franklin County Middle School for auxiliary offices, auxiliary education programs, and miscellaneous office space, \niii) acquiring communication equipment and other equipment, including buses and transportation equipment, \n \niv) adding to, renovating, repairing, improving and equipping existing school buildings and grounds, agricultural facilities and athletic facilities, and other buildings and facilities useful or desirable in connection therewith, including but not limited to Royston Elementary School, Lavonia Elementary School, Carnesville Elementary School, Franklin County Middle School, Franklin County High School, and Central Franklin Elementary School, \n \nv) completing any capital outlay projects authorized in connection with the sales and use tax previously in effect. \n \n2,500,000.00 $ 2,300,000.00 \n700,000.00 \n10,000,000.00 4,000,000.00 \n \n2,500,000.00 1,075,000.00 $ 2,750,000.00 \n7,853,852.00 3,266,117.00 \n \n$ 2,446,828.01 Ongoing \n \n1,866.50 \n \n1,068,194.54 Ongoing \n \n16,443.95 \n \n2,651,803.30 Ongoing \n \n72,537.00 \n \n4,133,353.29 Ongoing \n \n3,266,117.00 Ongoing \n \n$ 19,500,000.00 $ 17,444,969.00 $ \n \n90,847.45 $ 13,566,296.14 \n \n[1] The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax. \n \n[2] The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion. \n \n[3] The voters of Franklin County approved the imposition of a 1% sales tax to fund the above projects and retire associated debt. Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the projects. \n \n[4] In addition to the expenditures shown above, the School District has incurred interest and related fees to provide advance funding for the above projects as follows: \n \nPrior Years \n \n$ 1,945,547.00 \n \nCurrent Year \n \n441,910.00 \n \nTotal \n \n$ 2,387,457.00 \n \n(5) In addition to the expenditures shown above, the School District has incurred bond issuance costs and related paying agent fees associated with bond debt service for the above projects as follows: \n \nPrior Years \n \n$ \n \n265,057.05 \n \nCurrent Year \n \n2,493.75 \n \nTotal \n \n$ \n \n267,550.80 \n \nSee notes to the basic financial statements. \n \n- 28 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE) \nALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2011 \n \nSCHEDULE \"5\" \n \nDESCRIPTION \nDirect Instructional Programs Kindergarten Program Kindergarten Program-Early Intervention Program Primary Grades (1-3) Program Primary Grades-Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades-Early Intervention (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Category II Category III Category IV Category V Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) \nTOTAL DIRECT INSTRUCTIONAL PROGRAMS \nMedia Center Program Staff and Professional Development \nTOTAL QBE FORMULA FUNDS \n \nALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) (2) \n \nELIGIBLE QBE PROGRAM COSTS \n \nSALARIES \n \nOPERATIONS \n \nTOTAL \n \n$ \n \n1,511,429.00 $ 1,516,452.17 $ \n \n66,712.00 \n \n74,256.17 \n \n3,503,440.00 \n \n3,814,380.55 \n \n292,953.00 \n \n88,023.12 \n \n1,695,618.00 \n \n2,012,193.40 \n \n203,922.00 2,632,142.00 2,366,020.00 \n942,868.00 2,848,116.00 \n797,125.00 251,496.00 223,524.00 120,579.00 \n \n64,061.34 2,450,422.00 2,489,922.99 \n662,908.41 \n40,073.08 339,790.28 1,560,981.84 141,674.43 \n80,307.48 473,481.88 \n73,208.99 245,743.44 180,044.87 \n \n$ 17,455,944.00 $ 16,307,926.44 $ \n \n489,435.00 86,695.00 \n \n607,917.09 \n \n16,007.09 $ \n57,936.88 1,479.58 \n23,683.54 \n \n1,532,459.26 74,256.17 \n3,872,317.43 89,502.70 \n2,035,876.94 \n \n862.97 22,481.95 79,730.28 84,406.43 \n \n64,924.31 2,472,903.95 2,569,653.27 \n747,314.84 \n \n1,509.53 2,068.23 160,530.23 8,058.73 11,431.73 7,635.73 1,430.00 3,377.09 \n101.97 \n \n41,582.61 341,858.51 1,721,512.07 149,733.16 \n91,739.21 481,117.61 \n74,638.99 249,120.53 180,146.84 \n \n482,731.96 $ 16,790,658.40 \n \n51,823.33 \n \n659,740.42 74,317.01 \n \n$ 18,032,074.00 $ 16,915,843.53 $ \n \n534,555.29 $ 17,524,715.83 \n \n(1) Comprised of State Funds plus Local Five Mill Share. (2) Allotments do not include the impact of the State amended formula adjustment. \n \nSee notes to the basic financial statements. \n \n- 29 - \n \n  SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS \n \n  Russell W. Hinton \nSTATE AUDITOR \n(404) 656-2174 \n \nDEPARTMENT OF AUDITS AND ACCOUNTS \n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \nMarch 13, 2012 \n \nHonorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education \nand Superintendent and Members of the Franklin County Board of Education \nINDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS \nLadies and Gentlemen: \nWe have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Franklin County Board of Education as of and for the year ended June 30, 2011, which collectively comprise Franklin County Board of Education's basic financial statements and have issued our report thereon dated March 13, 2012. 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. \nInternal Control Over Financial Reporting \nManagement of Franklin County Board of Education is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered Franklin County Board of Education's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Franklin County Board of Education's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Franklin County Board of Education's internal control over financial reporting. \nA 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. \n \n2011YB-10 \n \n  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. \nCompliance and Other Matters \nAs part of obtaining reasonable assurance about whether Franklin County 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. \nThis report is intended solely for the information and use of management, members of the Franklin County 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. \nRespectfully submitted, \n \nRWH:as 2011YB-10 \n \nRussell W. Hinton, CPA, CGFM State Auditor \n \n  Russell W. Hinton \nSTATE AUDITOR \n(404) 656-2174 \n \nDEPARTMENT OF AUDITS AND ACCOUNTS \n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \nMarch 13, 2012 \n \nHonorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education \nand Superintendent and Members of the Franklin County Board of Education \nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 \nLadies and Gentlemen: \nCompliance \nWe have audited Franklin County 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, 2011. Franklin County 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 Franklin County Board of Education's management. Our responsibility is to express an opinion on Franklin County Board of Education's compliance based on our audit. \nWe 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 Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Franklin County 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 Franklin County Board of Education's compliance with those requirements. \nIn our opinion, the Franklin County Board of Education complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major Federal programs for the year ended June 30, 2011. \n \n2011SA-10 \n \n  Internal Control Over Compliance \nManagement of Franklin County 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 Franklin County 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 procedures for 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 Franklin County Board of Education's internal control over compliance. \nA 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 compliance 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. \nOur 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. \nThis report is intended solely for the information and use of management, members of the Franklin County 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. \nRespectfully submitted, \n \nRWH:as 2011SA-10 \n \nRussell W. Hinton, CPA, CGFM State Auditor \n \n  SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS \n \n  FRANKLIN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2011 \n \nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \n \nFINDING CONTROL NUMBER AND STATUS \n \nFS-6951-09-01 FS-6951-10-01 \n \nFurther Action Not Warranted Previously Reported Corrective Action Implemented \n \nPRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \n \nNo matters were reported. \n \n  SECTION IV FINDINGS AND QUESTIONED COSTS \n \n  FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2011 \n \nI SUMMARY OF AUDITOR'S RESULTS \n \nFinancial Statements \n \nType of auditor's report issue: Governmental Activities; General Fund; Capital Projects Fund; Debt Service Fund; Aggregate Remaining Fund Information \n \nUnqualified \n \nInternal control over financial reporting:  Material weakness identified?  Significant deficiency identified? \n \nNo None Reported \n \nNoncompliance material to financial statements noted: \n \nNo \n \nFederal Awards \n \nInternal Control over major programs:  Material weakness identified?  Significant deficiency identified? \n \nNo None Reported \n \nType of auditor's report issued on compliance for major programs: All major programs \n \nUnqualified \n \nAny audit findings disclosed that are required to be reported in \n \naccordance with OMB Circular A-133, Section 510(a)? \n \nNo \n \nIdentification of major programs: CFDA Numbers \n \nName of Federal Program or Cluster \n \n10.553, 10.555 84.010, 84.389 84.027, 84.173, 84.391 84.410 \n \nChild Nutrition Cluster Title I, Part A Cluster Special Education Cluster Education Jobs Fund \n \nDollar threshold used to distinguish between Type A and Type B programs: \n \n$300,000.00 \n \nAuditee qualified as low-risk auditee? \n \nYes \n \nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \n \nNo matters were reported. \n \nIII FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \n \nNo matters were reported. \n \n "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-be26-bf8-b2009-h2010","title":"Franklin County Board of Education, Carnesville, Georgia, annual financial report for the fiscal year ended June 30, 2010 (including independent auditor's reports)","collection_id":"dlg_ggpd","collection_title":"Georgia Government Publications","dcterms_contributor":["Georgia. Department of Audits and Accounts, issuing body."],"dcterms_spatial":["United States, Georgia, 32.75042, -83.50018"],"dcterms_creator":["Georgia. Department of Audits and Accounts"],"dc_date":["2010-06-30"],"dcterms_description":["Began with fiscal year ended June 30, 2009.","Report year covers fiscal year.","Fiscal year ended June 30, 2014 (online surrogate) (Received via FTP 1/14/16 from Georgia Dept. of Audits and Accounts); title from PDF cover (Georgia Government Publications database, viewed February 24, 2023).","Fiscal year ended June 30, 2019 (online surrogate) (Georgia Government Publications database, viewed February 24, 2023)."],"dc_format":["application/pdf"],"dcterms_identifier":null,"dcterms_language":["eng"],"dcterms_publisher":["Atlanta, Ga. : Georgia. Department of Audits and Accounts"],"dc_relation":null,"dc_right":["http://rightsstatements.org/vocab/InC/1.0/"],"dcterms_is_part_of":null,"dcterms_subject":["Franklin County Board of Education (Ga.)--Appropriations and expenditures--Periodicals","Education--Georgia--Franklin County--Auditing--Periodicals","Education--Georgia--Franklin County--Finance--Statistics--Periodicals"],"dcterms_title":["Franklin County Board of Education, Carnesville, Georgia, annual financial report for the fiscal year ended June 30, 2010 (including independent auditor's reports)"],"dcterms_type":["Text"],"dcterms_provenance":["University of Georgia. Map and Government Information Library"],"edm_is_shown_by":["https://dlg.galileo.usg.edu/do:dlg_ggpd_y-ga-ba800-b-pr1-be26-bf8-b2009-h2010"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-be26-bf8-b2009-h2010"],"dcterms_temporal":null,"dcterms_rights_holder":["\u0026copy; Georgia Department of Audits"],"dcterms_bibliographic_citation":null,"dlg_local_right":null,"dcterms_medium":["annual reports","state government records","audits","financial records","financial statements"],"dcterms_extent":null,"dlg_subject_personal":null,"iiif_manifest_url_ss":null,"dcterms_subject_fast":null,"fulltext":"FRANKLIN COUNTY BOARD OF EDUCATION \nCARNESVILLE, GEORGIA \nANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED \nJUNE 30,2010 \n(Including Independent Auditor's Reports) \n \n FRANKLIN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \n \nSECTION I \n \nFINANCIAL \n \nINDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION- SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \n \nREQUIRED SUPPLEMENTARY INFORMATION \n \nMANAGEMENT'S DISCUSSION AND ANALYSIS \n \nEXHIBITS \n \nBASIC FINANCIAL STATEMENTS \n \nDISTRICT-WIDE FINANCIAL STATEMENTS \n \nA \n \nSTATEMENT OF NET ASSETS \n \nB \n \nSTATEMENT OF ACTIVITIES \n \nFUND FINANCIAL STATEMENTS \n \nC \n \nBALANCE SHEET \n \nGOVERNMENTAL FUNDS \n \nD \n \nRECONCILIATIONOF THE GOVERNMENTAL FUNDS BALANCE SHEET \n \nTO THE STATEMENT OF NET ASSETS \n \nE \n \nSTATEMENT OF REVENUES, EXPENDITURES AND CHANGES \n \nIN FUND BALANCES \n \nGOVERNMENTAL FUNDS \n \nF \n \nRECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT \n \nOF REVENUES, EXPENDITURES AND CHANGES IN FUND \n \nBALANCES TO THE STATEMENT OF ACTIVITIES \n \nG \n \nSTATEMENT OF FIDUCIARY NET ASSETS \n \nFIDUCIARY FUNDS \n \nH \n \nNOTES TO THE BASIC FINANCIAL STATEMENTS \n \nSCHEDULES \n \nREQUIRED SUPPLEMENTARY INFORMATION \n \n1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND \n \n FRANKLIN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \n \nSECTION I \nFINANCIAL \nSCHEDULES \nSUPPLEMENTARY INFORMATION \n2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 3 SCHEDULE OF STATE REVENUE 4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 5 ALLOTMENTS AND EXPENDITURES \nGENERAL FUND -QUALITY BASIC EDUCATION PROGRAMS (QBE) BY PROGRAM \n \nPage \n \nSECTION II \nCOMPLIANCE AND INTERNAL CONTROL REPORTS \nINDEPENDENT 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 WlTH GOVERNMENT AUDITING STANDARDS \nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WlTH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJORPROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WlTH OMB CIRCULAR A-133 \n \nSECTION Ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS \n \nSECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS \n \n FRANKLIN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \nSECTION V MANAGEMENT'S RESPONSES SCHEDULE OF MANAGEMENT'S RESPONSES \n \n SECTION I FINANCIAL \n \n Russell W. Hinton \nSTATE AUDITOR \n(404)656-2174 \n \nDEPARTMENOTF AUDITSAND ACCOUNTS \n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \nMarch 23,2011 \n \nHonorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education \nand Superintendent and Members of the Franklin County Board of Education \nINDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERALAWARDS \nLadies and Gentlemen: \nWe have audited the accompanyingfinancial statements of the governmental activities, each major fund, and the aggregate remaining fund information (Exhibits A through H) of the Franklin County 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 Franklin County Board of Education's management. Our responsibility is to express opinions on these financial statements based on our audit. \nWe 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. \nIn 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 Franklin County 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. \nIn accordance with Government Auditing Standards, we have also issued our report dated March 23, 2011, on our consideration of the Franklin County 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 \n \n 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 Auditing Standardsand should be considered in assessing the results of our audit. \nAccounting principles generally accepted in the United States of America require that the Management's Discussionand Analysis and the Schedule of Revenues, Expendituresand Changes in Fund Balances - Budget and Actual, as presented on pages i through viii and page 23 respectively, 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 reportingfor 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. \nOur audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Franklin County 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, L m / Governments, and Non-Profit 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. \nA 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. \nRespectfully submitted, \n~ u h lWl. Hinton, CPA, CGFM State Auditor \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENTS DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30,2010 \nINTRODUCTION \nOur discussion and analysis of the Franklin County School District's financial performance provides an overview of the School District's financial activities for the fiscal year ended June 30, 2010. The intent of this discussion and analysis is to look at the School District's financial performance as a whole. We encourage our readers to also review the notes to the basic financial statements and financial statements t o enhance their understanding of the School District's financial performance. \nFINANCIAL HIGHLIGHTS \nKey financial highlights for fiscal year 2010 are as follows \na On the District-wide financial statements, the assets of the School District exceeded liabilities by $48.5 million. \na The School District had slightly more than $35.0 million in expenses relating to governmental activities; only $22.2 million of these expenses are offset by program specific charges for services, grants and contributions. General revenues (primarily property and sales taxes) of $13.9 million were adequate to provide the remainingfundingfor these programs. \nAs stated above, general revenues accounted for $13.9 million or 38% of all revenues \ntotaling $36.19 million. Program specific revenues in the form of charges for services, grants and contributions accounted for the rest. \nOVERVIEW OF THE FINANCIAL STATEMENTS \nThis annual report consists of three parts; management's discussion and analysis (this section), the basic financial statements and required supplementary information. The basic financial statements include two levels of statements that present different views of the School District. These include the District-wideand fund financial statements. \nThe District-wide financial statements include the 'Statement of Net Assets' and 'Statement of Activities'. These statements provide information about the activities of the School District presenting both short-term and long-term information about the School District's overall financial status. \nThe fund financial statements focus on individual parts of the School District, reporting the School District's operation in more detail. The 'Governmental Funds' statements disclose how basic services are financed in the short-term as well as what remains for future spending. The 'Fiduciary Funds' statements provide information about the financial relationships in which the School District acts solely as a trustee or agent for the benefit of others. In the case of the Franklin County School District, the General Fund, Capital Projects Funds, and Debt Service Funds are all considered to be major funds. The School District has no nonmajor funds as defined by GASB Statement 3 4 for the purposes of this report. \nThe financial statements also include notes that explain some of the information in the statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and supports the financial statements. Additionally, other supplementary information (not required) is also presented that further supplements understanding of the financial statements. \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENTS DISCUSSION AND ANALYSIS FOR THE FISCALYEAR ENDED JUNE 30,2010 \nDistrict-wide Statements \nSince Franklin County School District has no operations that have been classified as \"Business-Type Activities\", the District-wide financial statements are basically a consolidation of all of the School District's operating funds into one column called governmental activities. In reviewing the Districtwide financial statements, a reader might ask the question, are we in a better financial position now than last year? The 'Statement of Net Assets' and the 'Statement of Activities' provides the basis for answering this question. These financial statements include all the School District's assets and liabilities and uses the accrual basis of accounting similar to the accounting used by most privatesector companies. This basis of accounting takes into account all of the current year's revenues and expenses regardless of when cash is received or paid. \nThese two statements report the School District's net assets and any changes in those assets. The change in net assets is important because it tells the reader that, for the School District as a whole, the financial position of the School District has improved or diminished. The causes of this change may be the results of many factors, including those not under the School District's control, such as the property tax base, facility conditions, required educational programs, student-teacher ratios, and other factors. \nThe 'Statement of Net Assets' and the 'Statement of Activities' reflects 100%of the School District's financial activities. \nFund Financial Statements \nThe School District uses many funds or sub-funds to account for a multitude of financial transactions during the fiscal year. The fund financial statements presented in this report provide detail information about only the School District's significant or major funds. As discussed previously, the School District has no nonmajor funds as defined by GASB Statement 34. \nGovernmental Funds - Most of the School District's activities are reported in the governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end available for spending in future periods. These funds are reported using the modified accrual method of accounting which measures cash and all other financial assets that can be readily converted to cash. The governmental fund statements provide a detailed short-term view of the School District's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance educational programs. The differences between government activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental funds are reconciled in the financial statements. \nFiduciaw Funds - The School District is the trustee, or fiduciary, for assets that belong to school clubs and other organizations within the principals' accounts. The School District is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. The School District excludes these activities from the District-wide financial statements because it cannot use these assets to finance its operations. \nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT AS A WHOLE \nRecall that the Statement of Net Assets provides the perspective of the School District as a whole. The reader can think of the School District's net assets as the difference between its assets (i.e., what the School District owns) and its liabilities (i.e., what the School District owes) at the end of a \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENTS DISCUSSION AND ANALYSIS FOR THE FISCALYEAR ENDED JUNE 30,2010 \n \nfiscal year. This balance represents one way to measure the School District's financial health or its financial position. In the case of the Franklin County School District, assets exceeded liabilities by $48.5 million at June 30,2010. \n \nTo better understand the School District's actual financial position and ability to deliver services in future periods, the reader will need to review the various components of the net asset category. For example, of the $48.5 million of net assets, approximately $4.3 million was restricted for continuation of Federal programs, debt service, and completion of certain ongoing capital projects. Accordingly, these funds were not available to meet the School District's ongoing obligations to citizens and creditors. \n \nIn addition, the School District also had $43.6 million (net of related debt) invested in capital assets (e.g., land, buildings, and equipment). The School District uses these capital assets to provide educational services to students within geographic boundaries served by the School District. Because of the very nature and on-going use of the assets being reported in this component of net assets, it must be recognized that this portion of the net assets is notavailable for future spending. \n \nTable 1provides a summary of the School District's net assets for fiscal year 2010 compared to fiscal year 2009. \nTable 1 Net Assets \n \nGovernmental Activities \n \nFiscal \n \nFiscal \n \nYear 2010 \n \nYear 2009 \n \nAssets Current and Other Assets Capital Assets, Net \n \nTotal Assets \n \nLiabilities Current and Other Liabilities Long-Term Liabilities \n \nTotal Liabilities \n \nNet Assets Invested in Capital Assets, Net of Related Debt Restricted Unrestricted \n \nTotal Net Assets \n \nTable 2 shows the Changes in Net Assets for fiscal year 2010 as compared to fiscal year 2009. \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENTS DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30,2010 \n \nTable 2 Change in Net Assets \nRevenues Program Revenues: Charges for Services Operating Grants and Contributions Capital Grants and Contributions \nTotal Program Revenues \nGeneral Revenues: Taxes Property Taxes For Maintenance and Operations Railroad Cars Sales Taxes Special Purpose Local Option Sales Tax For Debt Services Intangible RecordingTax Real Estate Grants and Contributions not Restrictedto Specific Programs Investment Earnings Miscellaneous Transfers \nTotal General Revenues \nTotal Revenues \nProgram Expenses: Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Admin~stration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Operations of Non-InstructionalServices Enterprise Operations Food Services Interest on Short-Term and Long-Term Debt \nTotal Expenses \nIncrease in Net Assets \n \nGovernmental Activities \n \nFiscal Year \n \nFiscal Year \n \n2010 \n \n2009 \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENTS DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30,2010 \n \nGovernmental Activities \nThe Statement of Activities shows the cost of program services and the charges for services and grants offsetting these services. Table 3 shows, for governmental activities, the total cost of services and the net cost of services and compares fiscal year 2010 with fiscal year 2009. Net cost of services can be defined as the total cost less fees generated by the activities and intergovernmental revenue provided for specific programs. The net cost reflects the financial burden on the School District's taxpayers by each activity. \nTable 3 Governmental Activities \n \nTotal Cost of Services \n \nFiscal \n \nFiscal \n \nYear 2010 \n \nYear 2009 \n \nNet Cost of Services \n \nFiscal \n \nFiscal \n \nYear 2010 \n \nYear 2009 \n \nInstruction Support Services: \nPupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance of Operation of Plant Student Transportation Services Central Support Services Other Support Services Operations of Non-Instructional Services: Enterprise Operations Community Services Food Services Interest on Short-Term and LonETerm Debt \n \nTotal Expenses \n \nFINANCIALANALYSIS OF THE SCHOOL DISTRICTS FUNDS \nThe School District's governmental funds are accounted for using the modified accrual basis of accounting. The governmental funds had total revenues of $36.21 million and total expenditures of $35.87 million during fiscal year 2010. Included in the $35.87 million of expenditures were $0.26 million of Capital Outlay expenditures and $2.45 million in Debt Service. These expenditures were funded primarily through General Obligation Bonds issued in 2006 and 2007 and SPLOST receipts. \nGeneral Fund Budgeting Highlights \nThe School District's budget is prepared according to Georgia Law. The most significant budgeted fund of the School District is the General Fund. However under the GASB 3 4 reporting model the General Fund includes more than the \"general fund' described in the Department of Education's \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30,2010 \n \nFinancial Management for Georgia Local Units of Administration (FMGLUA). No changes were made to the General Fund budget as described in the FMGLUA, but amendments were made to other funds included in the broader GASB 34 definition. These amendments were the result of carry over funds and/or changes in tentative allocations. \nFor the General Fund, the final actual revenues of $33.14 were below the final budgeted amounts of $35.33 million by $2.19 million. This difference (final actual vs. final budget) was due primarily due to significant increase in state funding reductions to the QBE funding source. These reductions included reduced amounts provided to the district resulting from increases in the amended formula adjustment and reductions to employer health insurance costs which are funded in through the QBE formula. \nThe final actual expenditures of $33.5 was slightly under the final budgeted amount of $34.0 million by $0.5 million. This variance was a result in an end of year reduction in employer's health insurance cost and reductions in spending related to maintenance and operations. \nCAPITAL ASSETS AND DEBT ADMINISTRATION \nCapital Assets \nAt fiscal year ended June 30, 2010, the School District had $53.89 million invested in capital assets, all in governmental activities. Table 4 reflects a summary of these balances net of accumulated depreciation and compares fiscal year 2010 with fiscal year 2009. \nTable 4 Capital Assets (Net of Depreciation) \n \nGovernmental Activities \n \nFiscal \n \nFiscal \n \nYear 2010 \n \nYear 2009 \n \nLand Land Improvements Buildings Equipment \n \nTotal \n \nAdditional information of the School District's Capital Assets can be found in the Notes to the Basic Financial Statements. \nThe School District funded a few minor construction projects in fiscal year 2010 and since all projects were completed within the fiscal year, no construction in progress was reported as of June 30.2010. \n \n FRANKLIN COUNTY BOARD OF EDUCATION MANAGEMENTS DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30,2010 \n \nDebt \nAt fiscal year ended June 30, 2010, the School District had $12,175,000.00 in bonds outstanding, and $199,506.07 in other long-term debt. Table 5 summarizes the School District's debt for general obligation bonds and capital leases and compares fiscal year 2010 with fiscal year 2009. \nTable 5 Debt at June 30 \n \nGovernmental Activities \n \nFiscal \n \nFiscal \n \nYear 2010 \n \nYear 2009 \n \nCapital Leases Bonds Payable \nTotal \nAdditional information of the School District's Capital Assets can be found in the Notes to the Basic Financial Statements. \nCURRENT ISSUES \nCurrently known facts, decisions or conditions that are expected to have a significant effect on financial positions or results of operations in future years are as follows: \nState QBE Revenue Reductions - During the current fiscal year the State of Georgia again implemented statewide austerity reductions to all School Districts. Franklin County's QBE funding was reduced by $3,420,434. $1,593,961 of this reduction was offset by Federal Stimulus Funds. Reductions of approximately $2.8 million have been indicated for fiscal year 2 0 1 1 and could be repeated in future years until the state and local economy grows. Some of these reductions were offset with Federal grants funds (ARRA), but these funds are expected to be expended by the end of fiscal year 2011. This shifting of financial responsibility to the local property taxpayer puts a burden on local leadership as it tries to communicate these changes to its electorate. Despite these challenges, the Franklin County School District is strong financially, and we remain optimistic about the ability of the School District to maximize all of the financial resources to provide a quality education to our students. \nCapital Improvements - The School District plans capital improvements as future capital needs arise due to increased student population and facility repair and maintenance needs. Specific capital expenditure plans are formalized in conjunction with individual general obligation bond issues and anticipated annual receipts of capital outlay funds from the State of Georgia Department of Education. The School District regularly monitors anticipated capital outlay needs, and prioritizes those needs so as to best utilize available funding. \n \n FRANKLIN COUNlY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCALYEAR ENDED JUNE 30,2010 \nCONTACTING THE SCHOOL DISTRICT'S FINANCIAL MANAGEMENT \nThis financial report is designed to provide our citizens, taxpayers, investors and creditors with a general overview of the School District's finances and to show the School District's accountability for the money it receives. If you have questions about this report or need additional financial information, contact Mr. Matt McRee, Finance Director for Franklin County School District, 280 Busha Road, Carnesville, Georgia 30521. You may also email your questions to Mr. McRee at mmcree@franklin.kl2.ga.u~. \n \n FRANKLIN COUNTY BOARD OF EDUCATION \n \n FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF NET ASSETS JUNE 30,2010 \nASSETS \nCash and Cash Equivalents Investments Accounts Receivable, Net \nTaxes State Government Federal Government Local Inventories Capital Assets, Non-Depreciable Capital Assets, Depreciable (Net of Accumulated Depreciation) \nTotal Assets \nLIABILITIES \nAccounts Payable Salaries and Benefits Payable PayrollWithholdings Payable Interest Payable Long-Term Liabilities \nDue Within One Year Due in More Than One Year \nTotal Liabilities \nNET ASSETS \nInvested in Capital Assets, Net of Related Debt Restricted for \nContinuation of Federal Programs Debt Service Capital Projects Unrestricted \nTotal Net Assets \nTotal Liabilities and Net Assets \n \nEXHIBIT \"A\" \nGOVERN MENTAL ACTlVlTl ES \n \nThe notes to the basic financial statements are an integral part of this statement. -1- \n \n FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES \nFOR THEYEAR ENDED JUNE 30.2010 \n \nGOVERNMENTAL ACTIVITIES \nInstruction Support Setvlces \nPup11Setvlces Improvementof Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Servlces Other Support Services Operations of Non-Instructional Setvlces Enterprise Operat~ons Community Sefvlces Food Setvices Interest on Short-Term and Long-Term Debt \nTotal Governmental Activities \nGeneral Revenues Taxes Property Taxes For Maintenance and Operations Railroad Cars Sales Taxes Special Purpose Local Optlon Sales Tax For Debt Setvlces Other Sales Tax Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous \nTransfers \nTotal General Revenues and Transfers \nChange in Net Assets \nNet Assets - Beglnn~ngof Yea1 \n \nEXPENSES \n \nPROGRAM REVENUES \n \nOPERATING \n \nCHARGES FOR \n \nGRANTS AND \n \nSERVICES \n \nCONTRIBUTIONS \n \nNET (EXPENSES) REVENUES \nAND CHANGES IN NET ASSETS \n \nNet Assets - End of Year \n \nThe notes to the baslc financlal statements are an Integral part of this statement. 2 \n \n FRANKLIN COUNTY BOARD OF EDUCATION BALANCE SHEET \nGOVERNMENTAL FUNDS JUNE 30,2010 \n \nGENERAL FUND \n \nDISTRICTWIDE \nCAPITAL PROJECTS \nFUND \n \nDEBT SERVICE \nFUND \n \nCash and Cash Equivalents Investments Accounts Receivable, Net \nTaxes State Government Federal Government Local Inventories \nTotal Assets \n \nLIABILITIES AND FUND BALANCES \nLIABILITIES \nCash Overdraft Accounts Payable Salarles and Benefits Payable Payroll Withholdings Payable Deposits and Deferred Revenue \nTotal Liabilities \nFUND BALANCES \nResewed for: Continuation of Federal Programs Debt Service Capital Projects \nUnreSe~ed Designated for Student Activities Undesignated Reported in: General Fund \nTotal Fund Balances \nTotal Liabilities and Fund Balances \n \nTOTAL \n \nThe notes to the basic financial statements are an integral part of this statement. \n- 3 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \nTO THE STATEMENT OF NET ASSETS JUNE 3 0 , 2 0 1 0 \nTotal Fund Balances - Governmental Funds (Exhlbit \"C\") Amounts reported for Governmental Activities in the Statement of Net Assets are \ndifferent because: Capital Assets used in Governmental Activities are not financial resources and therefore are not reported in the funds. These assets consist of: Land Land Improvements Buildings Equipment Accumulated Depreciation Total Capital Assets Taxes that are not available to pay for current period expenditures are deferred in the funds. Lon\u0026Term Liabilities, including Bonds Payable, are not due and payable i n the current period and therefore are not reported as liabilities in the funds. Long-Term Liabilities at year-end consist of: Bonds Payable Accrued Interest Capital Leases Payable Total Long-Term Liabilities \nNet Assets of Governmental Activities (Exhibit \"A\") \nThe notes to the basic financial statements are an integral part of this statement. \n- 4 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES \nGOVERNMENTAL FUNDS YEAR ENDEDJUNE 30,2010 \n \nREVENUES \nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous \nTotal Revenues \nEXPENDITURES \nCurrent 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 Enterpr~seOperations Food Services Operation \nCapital Outlay Debt Services \nPrincipal Interest \nTotal Expenditures \nExcess of Revenues over (under) Expenditures \nOTHER FINANCING SOURCES (USES) \nTransfers In Transfers Out \nTotal Other Financing Sources (Uses) \nNet Change in Fund Balances \nFund Balances - Beginning \nFund Balances- Ending \n \nGENERAL FUND \n \nDISTRICTWIDE \nCAPITAL PROJECTS \nFUND \n \nDEBT SERVICE \nFUND \n \nTOTAL \n \nThe notes to the basic financial statements are an integral part of this statement. -5- \n \n FRANKLIN COUNTY BOARD OF EDUCATION RECONCILIATIONOFTHE GOVERNMENTALFUNDSSTATEMENT OF \nREVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30,2010 \nTotal Net Change in Fund Balances- Governmental Funds (Exhibit\" E ) Amounts reported for GovernmentalActivities in the Statement of Activities are different because: \nCapital Outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activities, 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 \nTaxes reported In the Statement of Activities that do not provide current financial resourcesare not reported as revenues in the funds. \nIn the Statement of Activities, only the gain on the sale or dlsposal of the equipment is reported, whereas in the Governmental Funds, the entire proceedsfrom the sale increase financial resources.Thus, the change in net assets differs from the change in fund balance by the cost of the carrying value of the equipment sold or disposed. \nRepayment of Long-Term Debt is reported as an expenditure In Governmental Funds, but the repayment reduces Long-Term Liabilities in the Statement of Net Assets. In the current year, these amounts consist of: Bond Principal Retirements Capital Lease Payments Total Long-Term Debt Repayments \nInterest expense reported in the Statement of Activities is recorded as incurred, whereas Interest expense in the governmental fund statements is reported when paid. \nChange in Net Assets of GovernmentalActivities (Exhibit \"6\") \nThe notes to the basic financial statements are an integral part of this statement. -6- \n \n FRANKLIN COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 3 0 , 2 0 1 0 \nASSETS Cash and Cash Equivalents \nLIABILITIES Funds Held for Others \n \nEXHIBIT \"G\" \nAGENCY FUNDS \n \nThe notes t o the basic financial statements are an integral part of this statement. - 7 - \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30,2010 \n \nEXHIBIT \"H\" \n \nNOTE 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY \nREPORTING ENTITY \nThe Franklin County 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. \nNOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES \nBASIS OF PRESENTATION \nThe 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 Franklin County Board of Education. \nDistrict-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. \nThe Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities. \na Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of 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. \nProgram 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. \nFund Financial Statements: 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. \nThe School District reports the following major governmental funds: \na 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. \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30,2010 \n \nEXHIBIT \"H\" \n \nDistrict-wide Capital Projects Fund accounts for financial resources including Special Purpose Local Option Sales Tax (SPLOST) and Bond Proceeds to be used for the acquisition, construction or renovation of major capital facilities. \nDebt Service Fund accounts for taxes (sales) legally restricted for the payment of general long-term principal, interest and paying agent's fees. \nThe School District reports the following fiduciary fund type: \nAgency funds account for assets held by the School District as an agent for various funds, governments or individuals. \nBASIS OF ACCOUNTING \nThe 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, and grants. 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 is recognized in the fiscal year in which all eligibility requirements have been satisfied. \nThe 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. \nGovernmental 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. Propertytaxes, sales taxes and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities and acquisitions under capital leases are reported as other financing sources. \nThe 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. \nThe 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 \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30,2010 \n \nEXHIBIT \"H\" \n \nperiod 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. \nNEW ACCOUNTING PRONOUNCEMENTS \nIn fiscal year 2010, the School District adopted the Governmental Accounting and Standards Board \n(GASB) Statement No. 51, Accounting and Reporting for Intangible Assets. The provisions of this \nStatement generally require retroactive reporting for 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. \nIn addition, the School District adopted GASB Statement No. 53, Accounting and Financial Reporting for Derivative Instrumen\u0026. 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. \nCASH AND CASH EQUIVALENTS \nComposition 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. \nINVESTMENTS \nComposition 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 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: \n1. Obligations issued by the State of Georgia or by other states, \n2. Obligations issued by the United States government, \n3. Obligations fully insured or guaranteed by the United States government or a United States government agency, \n4. Obligations of any corporation of the United States government, \n5. Prime banker's acceptances, \n6. The Georgia Fund 1administered by the State of Georgia, Office of Treasury and Fiscal Services, \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30,2010 \n \nEXHIBIT \"H\" \n \n7. Repurchase agreements, and \n8. Obligations of other political subdivisions of the State of Georgia. \nThe 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. \nRECEIVABLES \nReceivables 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. \nPROPERTY TAXES \nThe Franklin County Board of Commissionersfixed the property tax levy for the 2009 tax digest year (calendar year) on July 24, 2009 (levy date). Taxes were due on November 15, 2009 (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 Franklin County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to 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 $9,294,350.47. \nThe tax millage rate levied for the 2009 tax year (calendar year) for the Franklin County Board of Education was as follows (a mill equals $ 1 per thousand dollars of assessed value): \n \nSchool Operations \n \n14.868 mills \n \nSALESTAXES \nSpecial Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $3,060,439.67 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years. \nINVENTORIES \nFood 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. \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30,2010 \n \nEXHIBIT \"H\" \n \nCAPITAL ASSETS \n \nCapital 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. \n \nCapitalization thresholds and estimated useful lives of capital assets reported in the District-wide statements are as follows: \n \nCapitalization Policy \n \nEstimated Useful Life \n \nLand Land Improvements Buildings and Improvements Equipment \n \nAny Amount \n \n$ \n \n10,000.00 \n \n$ \n \n20,000.00 \n \n$ \n \n5,000.00 \n \nN/A 20 to 80 years 25 to 80 years \n5 to 50 years \n \nDepreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives. \n \nGENERAL OBLIGATION BONDS \n \nThe School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. \n \nIn the District-wide and fund financial statements, the School District recognizes bond premiums and discounts, as well as bond issuance costs during the fiscal year bonds are issued. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. To conform to generally accepted accounting principles, bond premiums and discounts, as well as bond issuance costs should be amortized over the life of the bonds on the District-wide statements. The effect of this deviation is deemed to be immaterial to the fair presentation of the basic financial statements. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the Statement of Net Assets. \n \nNET ASSETS \n \nThe School District's net assets in the District-wide Statements are classified as follows: \n \nInvested in capital assets, net of related debt - This represents the School District's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt. \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30,2010 \n \nEXHIBIT \"H\" \n \nRestricted net assets - These represent resources for which the School District is legally or contractually obligated to spend resources for continuation of Federal programs, debt service and capital projects in accordance with restrictions imposed by external third parties. \nUnrestricted 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. \nFUND BALANCES \nReserved Reserves represent those portions of fund balance equity that are legally segregated for a specific future use. \n- Unreserved Designated \nDesignatedfund balances represent tentative plans for future use of financial resources. \nNOTE 3: DEPOSITS AND INVESTMENTS \nCOLLATERALIZATION OF DEPOSITS \nOfficial 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 110 percent of the daily pool balance. \nAcceptable security for deposits consists of any one of or any combination of the following: \n1. Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, \n2. lnsurance on accounts provided by the Federal Deposit lnsurance Corporation, \n3. Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia, \n4. Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, \n5 . 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, \n6. Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30,2010 \n \nEXHIBIT \"H\" \n \n7. 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 MortgageAssociation. \nCATEGORIZATION OF DEPOSITS \nCustodial 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 formal policy for managing custodial credit risk. At June 30, 2010, the bank balances were $4,120,688.40. The bank balances were entirely covered by Federal depository insurance or collateralized with securities held by the pledging financial institution in the School District's name or pledging financial institution's trust department or agent in the School District's name. \nCATEGORIZATION OF INVESTMENTS \nAt June 30, 2010, the carrying value of the School District's total investments was $4,212,538.76, which is materially the same as fair value. This investment consisted entirely of funds invested in the Georgia Fund 1,formerly referred to as LGIP, administered by the State of Georgia, Office of Treasury and Fiscal Services which are not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office of Treasury and Fiscal Services for the Georgia Fund 1(Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. Additional information on the Georgia Fund 1is disclosed in the State of GeorgiaComprehensive Annual Financial Report. This audit can be obtained from the Georgia Department of Audits and Accounts at htt~://www.audits.sa.qov/SGD/cafr. htrnl. \nThe Primary Liquidity Portfolio consists of Georgia Fund 1which is not registered with the SEC as an investment company but does operate in a manner consistent with the SEC's Rule 2a-7 of the Investment Company Act of 1940. The investment is valued at the pool's share price, $1.00 per share. The pool is an AAAm rated investment pool by Standard and Poor's. The weighted average maturity of Georgia Fund 1may not exceed 60 days. The weighted average maturity for Georgia Fund 1on June 30,2010, was 4 6 days. \nNOTE 4: NON-MONETARYTRANSACTIONS \nThe School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 2 - Inventories \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30,2010 \n \nEXHIBIT \"H\" \n \nNOTE 5: CAPITAL ASSETS \n \nThe following is a summary of changes in the Capital Assets during the fiscal year: \n \nGovernmental Activities Capital Assets, Not Being Depreciated: \nLand \n \nBalances July 1,2009 \n \nIncreases \n \nDecreases \n \nBalances June 30,2010 \n \nCapital Assets, Being Depreciated: Buildingsand Improvements Equipment Land Improvements \n \n$ 50,113,066.70 5,240,290.11 $ 7,675,786.19 \n \n27,527.50 $ \n \n$ 63,921.26 \n \n50,113,066.70 5,203,896.35 7,675,786.19 \n \nLess: Accumulated Depreciation: Buildings and lmprovements Equipment Land lmprovements \n \nTotal Capital Assets, Being Depreciated, Net $ 53,582,049.83 $ -1,015,126.94 $ \n \n14.065.59 $ 52.552.857.30 \n \nGovernmental Activity Capital Assets - Net \n \n$ 54,920,207.22 $ -1,015,126.94 $ \n \n14,065.59 $ 53,891,014.69 \n \nCapital assets being acquired under capital leases as of June 30, 2010, are as follows: \nGovernmental Funds \nEquipment Less: Accumulated Depreciation \n \nCurrent year depreciation expense by function is as follows: \nInstruction Support Services \nEducational Media Services School Administration Maintenance and Operation of Plant Student Transportation Services Food Services \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30,2010 \n \nEXHIBIT \"H\" \n \nNOTE 6: INTERFUNDTRANSFERS Interfund transfers for the year ended June 30, 2010, consisted of the following: \n \nTransfer to \n \nTransfers From \n \nGeneral \n \nAgency \n \nFund \n \nFund \n \nGeneral Fund District-wide Capital Projects \n \n$ $ 18,468.00 \n \n9,095.97 \n \nTotal \n \nTransfers are used (1)to move property tax revenues collected by the General Fund to the Districtwide Capital Projects Fund for reimbursement of temporary classrooms and (2) to transfer funds from Agency accounts to the General Fund to make corrections to the Agency account balances when the school activity accounts began using CSI. \n \nNOTE 7 : RISK MANAGEMENT \n \nThe 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. \n \nThe School District participates in the Georgia School Boards Association Risk and Insurance Management System, a public entity risk pool organized on July 1,1994, to develop and administer a plan to reduce risk of loss on account of general liability, motor vehicle liability, or property damage, including safety engineering and other loss prevention and control techniques, and to administer one or more groups of self-insurance funds, including the processing and defense of claims brought against members of the system. The School District pays an annual premium to the system for its general insurance coverage. Additional coverage is provided through agreements by the system with other companies according to their specialty for property, boiler and machinery (including coverage for flood and earthquake), general liability (including coverage for sexual harassment, molestation and abuse), errors and omissions, crime and automobile risks. Payment of excess insurance for the system varies by line of coverage. \n \nThe School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the General Fund with expenses/expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. \n \nChanges in the unemployment compensation claims liability during the last two fiscal years are as follows: \n \nClaims and \n \nBeginning of Year \n \nChanges in \n \nClaims \n \nEnd of Year \n \nLiability \n \nEstimates \n \nPaid \n \nLiability \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30,2010 \n \nEXHIBIT \"H\" \n \nThe School District participates in the Georgia School Boards Association Workers' Compensation Fund, a public entity risk pool organized on July 1,1992, 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 Fund for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Fund with the Safety National Casualty Corporation to provide coverage for potential losses sustained by the Fund in excess of $500,000.00 loss per occurrence, up to the statutory limit. Employers' Liability insurance coverage is also provided by Safety National Casualty Corporation to provide coverage for potential losses sustained by the Fund in excess of $500,000.00 loss per occurrence, up to $2,000,000.00. \n \nThe School District has purchased surety bonds to provide additional insurance coverage as follows: \n \nPosition Covered \n \nAmount \n \nSuperintendent All Employees \n \nNOTE 8: LONG-TERM DEBT \n \nCAPITAL LEASES \n \nThe Franklin County Board of Education entered into various lease agreements for equipment, buses, and software applications. These lease agreements qualify as capital leases for accounting purposes, and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception. \n \nGENERAL OBLIGATION DEBT OUTSTANDING \n \nGeneral Obligation Bonds currently outstanding are as follows: \n \nPurpose \n \nInterest Rates \n \nAmount \n \nGeneral Government - Series 2006 General Government - Series 2007 \n \nThe changes in Long-Term Debt during the fiscal year ended June 30,2010, were as follows: \n \nBalance July 1, 2009 \n \nAdditions \n \nGovernmental Funds \n \nBalance \n \nDeductions \n \nJune 30.2010 \n \nDue Within One Year \n \nG. 0. Bonds Capital Leases \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30,2010 \n \nEXHIBIT \"H\" \n \nAt June 30. 2010, payments due by fiscal year which includes principal and interest for these items are as follows: \n \nCapital Leases \n \nPrincipal \n \nInterest \n \nFiscal Year Ended June 30: \n \nTotal Principaland Interest Fiscal Year Ended June 30: \n \n$ \n \n199,506.07 $ \n \n6,596.13 \n \nGeneral Obligation Debt \n \nPrincipal \n \nInterest \n \nTotal Principaland Interest \n \n$ 12,175,000.00 $ \n \n954,232.00 \n \nNOTE 9: ON-BEHALF PAYMENTS \nThe School District has recognized revenues and costs in the amount of $95,729.33 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies. \n \nGeorgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $60,714.69 \nPaid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $16,410.87 \nOffice 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 $18.603.77 \nNOTE 10: SIGNIFICANT CONTINGENT LIABILITIES \nAmounts 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. \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30,2010 \n \nEXHIBIT \"H\" \n \nThe 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. \nNOTE 11: POST-EMPLOYMENT BENEFITS \nGEORGIA SCHOOL PERSONNEL EMPLOYEES POST-EMPLOYMENT HEALTH BENEFIT FUND \nPlan 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 Fund 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). \nFunding 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%of the cost of health insurance coverage. \nParticipating 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. \nThe 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: \n \nFor certificated teachers, librarians and regional educational service agencies: \n \nJuly 2009 \nAugust 2009 - October 2009 \nNovember 2009 -June 2010 \n \n18.534% of covered payroll for August Coverage \n14.492% of covered payroll for September - November Coverage \n18.534% of covered payroll for December - July Coverage \n \nFor non-certificated school personnel: \n \nJuly2009 -June 2010 \n \n$162.72 per member per month plus Department of Education contribution of $22,838,311.00 \n \nNo 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 post-employment benefits and are subject to appropriation. \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30,2010 \n \nEXHIBIT \"H\" \n \nThe School District's combined active and retiree contributions to the health insurance plans, which \n \nequaled the required contribution, for the current fiscal year and the preceding two fiscal years were \n \nas follows: \n \nPercentage \n \nRequired \n \nFiscal Year \n \nContributed \n \nContribution \n \nNOTE 12: RETIREMENT PLANS \nTEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) \nPlan 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. \nOn 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. \nTRS 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 25 years of creditable service. \nNormal 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 40 years. Early retirement benefits are reduced by the lesser of one-twelfth of 7% for each month the member is below age 6 0 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. \nFunding 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 \n \n FRANKLIN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 3 0 , 2 0 1 0 \n \nEXHIBIT \"H\" \n \ncontributions 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 2 0 1 0 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. \n \nEmployer contributions for the current fiscal year and the preceding two fiscal years are as follows: \n \nFiscal Year \n \nPercentage Contributed \n \nRequired Contribution \n \n (This page left intentionally blank) \n \n FRANKLIN COUNTY BOARD OF EDUCATION GENERAL FUND \nSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL \nYEAR ENDED JUNE 30.2010 \n \nSCHEDULE \"1\" \n \nREVENUES \nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous \nTotal Revenues \nEXPENDITURES \nCurrent Instruction Support Services Pupil Services Improvement of lnstructlonal Services Educational Media Services General Administration School Administration Business Admln~stration Maintenance and Operation of Plant Student Transportation S e ~ l c e s Central Support S e ~ l c e s Other Support Serv~ces Food Services Operation Enterprise Operations \nDebt Serv~ce \nTotal Expenditures \nExcess of Revenuesover (under) Expenditures \nOTHER FINANCING SOURCES (USES1 \nOperating Transfers from Other Funds Operating Transfers to Other Funds \nTotal Other Flnanclng Sources (Uses) \nNet Change in Fund Balances \nFund Balances - Beglnnlng \nAdjustments \n \nNONAPPROPRIATED BUDGETS \n \nORIGINAL (1) \n \nFINAL (1) \n \nFund Balances - End~ng \nNote$ t. the Schedule of Revenues ExDendlturesand Chanees in Fund Balances Budget and Actual (1) Orlginal and Flnal Budget amounts do not include budgeted revenues or expenditures of the varlous principal accounts. The accompanylngschedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modlfled accrual basis of accounting whlch is the bass of accounting used In the presentation of the fund financial statements. See notes to the bas~cflnanclal statements. \n \nACTUAL AMOUNTS \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURESOF FEDERALAWARDS \nYEAR ENDEDJUNE 30.2010 \n \nSCHEDULE \"2\" \n \nFUNDING AGENCY PROGRAM/GRANT \nAgriculture, U. S. Department of Child Nutrition Cluster Pass-ThroughFrom Georgia Department of Education Food Services School Breakfast Program National School Lunch Program \nTotal U. S. Department of Agriculture \nEducation, U. S. Department of Education Technology State Grants Cluster Pass-ThroughFrom Georgia Department of Education Education Technology State Grants \nSchool improvement Grants Cluster Pass-ThroughFrom Georgia Department of Educatlon School Improvement Grants \nSpecial Education Cluster Pass-Through From Georgia Department of Education Special Education \n- ARRA Grants to States \nARRA - Preschool Grants \nGrants to States Preschool Grants \nTotal Special Education Cluster \nState Fiscal Stabilization Fund Cluster Pass-Through From Georgia Department of Education \nARRA - Educat~onState Grants \nTitle I, Part A Cluster Pass-Through From Georgia Department of Education ARRA-Title IGrants to Local Educational Agencies Titie I Grants to Local Educational Agencies \nTotal Title I, Part A Cluster \nOther Programs Pass-Through From Georgia Department of Education Career and Technical Education - Basic Grants to States English LanguageAcquis~tionGrants ImprovingTeacher Quality State Grants Migrant Education -State Grant Program Rural Education Safe and Drug-FreeSchools and Communities - State Grants Twenty-FirstCentury Community Learning Centers \nTotal Other Programs \nTotal U. S. Department of Education \n \nCFDA NUMBER \n \nPASSTHROUGH \nENTllY ID \nNUMBER \n \nEXPENDITURES IN PERIOD \n \nTotal Federal Financial Assistance N/A = Not Available \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \nYEAR ENDEDJUNE 30,2010 \n \nSCHEDULE \"2\" \n \nNotesto the Schedule of Exoendituresof Federal Awards \n(1) Includesthe Federallyassigned value of donated commodities for the Food Donation Program in the amount of $66,466.99. \n(2) Expendituresfor the funds earned on the School Breakfast Program ($243,111.26) were not maintained separately and are included in the 2010 National School Lunch Program. \nMajor Programs are identified by an asterisk (*) in front of the CFDA number \nThe School District did not provide Federal Assistanceto any Subrecipient \nThe accompanyingschedule of expenditures of Federal awards Includesthe Federal grant activity of the Franklin County Board of Education and is presented on the modified accrual basis of accountingwh~chis the basis of accounting used in the presentation of the fund financial statements. \n \nSee notes to the basic financial statements. \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDEDJUNE 30.2010 \nGRANTS Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program \nKindergarten Program - Early lntervention Program \nPrimary Grades (1-3) Program Primary Grades - Early lntervention (1-3) Program Upper ElementaryGrades (4-5) Program \n- Upper Elementaly Grades Early Intervention (4-5) Program \nMiddle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities \nCategory I Category II Category Ill Category IV Category V Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program 2 0 Days Additional Instruction Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Categorical Grants Pupil Transportation Regular Sparsity Nursing Setvices Vocational Supervisors Education Equalization FundingGrant Food Services Vocational Education Amended Formula Adjustment Other State Programs Dual Enrollment Health Insurance Middle School Graduation Coach National Teacher Certification Grants PreschoolHandicapped Program Teachers' Retirement Virtual Schools Grant \nOffice of Treasury and Fiscal Services Public School Employees Retirement \nCONTRACT Human Resources, Georgia Department of Family Connection \nSee notes to the basic f~nanciasl tatements. \n \nSCHEDULE \" 3 \nGOVERNMENTAL FUND TYPE GENERAL FUND \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \nYEAR ENDED JUNE 30.2010 \n \nSCHEDULE \"4\" \n \nORIGINAL ESTIMATED \nCOST (1) \n \nCURRENT ESTIMATED COSTS (2) \n \n2006SPLOST Locations and Proiect Identifiers I) Acqulrlng, constructing, and equipping new school bulldlngs and other bulldlngs and facilities useful or desirable ~nconnection therewith \n \n$ 2.500.000.00 $ \n \n11)renovating, repairing, improving, and equlpplng the Old Franklln County Middle School for auxiliary offices. auxiliary education programs, and miscellaneous off~ce space, \niii) acquiringcommun~cat~oenquipment and othe~ equipment, including buses and transportation equipment, \n \niv) addlng to, renovating, repairing, improving and equipping existingschool bu~ldlngsand grounds, agricultural facllltles and athletic facilities, and other bulldlngs and facilities useful or des~rablein connection therewith, including but not l~mitedto Royston ElementarySchool, Lavonla ElementarySchool, Carnesvllle Elementary School. Franklin County Mlddle School. Franklin County High School, and Central Franklin Elementary School, \nv) acquiring land useful or deslrable for the purpose of renovation or future expansion, \nvi) completing any capltal outlay projects authorized In connection with the sales and use tax previously In effect. \n \n10,000,000.00 500.000.00 \n \n2,500,000.00 \n7,853.852.00 555,031.00 \n \nAMOUNT EXPENDED IN CURRENT YEAR (3) (4) (5) \n \nAMOUNT EXPENDED IN PRIOR YEARS (3) (4) (5) \n \nPROJECT STATUS \n \n318,085.91 \n \n3,815,267.38 Ongoing 555.030.87 Completed \n \n[ I ] The School Dlstrlct's orlginal cost estimate as specified In the resolution callingfor the imposition of the Local Option Sales Tax. \n \n[Z] The School District's current estlmate of total cost for the projects. Includes all cost from project inception to completion. \n \n[3] The voters of Franklhn County approved the lmposltlon of a 1%sales tax to fund the above projects and retlre assoclated debt. Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the projects. \n \n[4] In addltlon to the expenditures shown above, the School District has Incurred interest and related fees to prov~deadvance funding for the above projects as follows: \n \nPrior Years \n \n$ 1,445.664.00 \n \nCurrent Year \n \nTotal \n \n(5) In addition to the expendltures shown above, the School Dlstrict has incurred bond Issuance costs and related paying agent fees assoclated wlth bond debt selvlce for the above projects as follows: \n \nPrior Years \n \n$ \n \n262.548.30 \n \nCurrent Year \n \n2.508.75 \n \nTotal \n \nSee notes to the basic financial statements. \n \n (This page left intentionally blank) \n \n FRANKLIN COUNTY BOARD OF EDUCATION \nGENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE) \nALLOTMENTS AND EXPENDITURES- BY PROGRAM YEAR ENDED JUNE 30.2010 \n \nSCHEDULE \" 5 \n \nDirect Instructional Programs K~ndergartenProgram K~ndergartenProgram-Early lnterventlon Program Primary Grades (1-3) Program Primary Grades-Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades-Early Intervention (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocat~onaLl aboratory (9-12) Program Students w ~ t hDlsabllltles Category I Category II Category Ill Category IV Category V Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) \nTOTAL DIRECT INSTRUCTIONAL PROGRAMS \nMedia Center Program Staff and Professional Development \n \nALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION(1) (2) \n \nELIGIBLE QBE PROGRAM COSTS \n \nSALARIES \n \nOPERATIONS \n \nTOTAL \n \n489,823.00 89,182.00 \n \n606,079.36 \n \n52,201.26 \n \n658,280.62 101.840.68 \n \nTOTAL QBE FORMULA FUNDS \n \n(1) Compr~sedof State Funds plus Local F~veM ~ lSl hare. (2) Allotments do not IncludeMe Impact of the State amended formula adjustment. \n \nSee notes to the basic f~nanc~satal tements. \n \n SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS \n \n Russell W. Hinton \nSTATE AUDITOR \n(404) 656.2174 \n \nDEPARTMENOTF AUDITSAND ACCOUNTS \n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \nMarch 23,2011 \n \nHonorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education \nand Superintendent and Members of the Franklin County Board of Education \nINDEPENDENT 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 \nLadies and Gentlemen: \nWe have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Franklin County Board of Education as of and for the year ended June 30, 2010, which collectively comprise Franklin County Board of Education's basic financial statements and have issued our report thereon dated March 23, 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. \nInternal Control Over Financial Re~orting \nIn planning and performing our audit, we considered Franklin County 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 Franklin County Board of Education's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Franklin County Board of Education's internal control over financial reporting. \nA 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. \nOur 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 \n \n material weaknesses, as defined above. However, we consider item FS-6591-10-01, described in the accompanying Schedule of Findings and Questioned Costs to be a significant deficiency in internal controls over financial reporting. A signficant deficiency 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. \nCom~lianceand Other Matters \nAs part of obtaining reasonable assurance about whether Franklin County 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, \nWe noted certain matters that we have reported to management of Franklin County Board of Education in a separate letter dated March 23, 2011. \nFranklin County Board of Education's response to the findings identified in our audit is described in the accompanying Schedule of Management's Responses. We did not audit Franklin County Board of Education's response and, accordingly, we express no opinion on it. \nThis report is intended solely for the information and use of management, members of the Franklin County 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. \nRespectfully submitted, \n~ u s + l l W. Hinton, CPA. CGFM State Auditor \n \n Russell W. Hinton \nSTATE AUDITOR \n(404)656-2174 \n \nDEPARTMENOTF AUDITSAND ACCOUNTS \n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \nMarch 23,2011 \n \nHonorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education \nand Superintendent and Members of the Franklin County Board of Education \nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WlTH REOUIREMENTS 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 \nLadies and Gentlemen: \n \nWe have audited Franklin County 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. Franklin County 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 Franklin County Board of Education's management. Our responsibility is to express an opinion on Franklin County Board of Education's compliance based on our audit. \nWe 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 Governmen\u0026, and Non-Profif Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Franklin County 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 Franklin County Board of Education's compliance with those requirements. \nIn our opinion, the Franklin County Board of Education complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major Federal programs for the year ended June 30,2010. \n \n Internal Control Over Com~liance \nManagement of Franklin County 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 Franklin County 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 procedures for 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 Franklin County Board of Education's internal control over compliance. \nA 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 compliance 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. \nOur 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. \nThis report is intended solely for the information and use of management, members of the Franklin County 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. \nRespectfully submitted, \nell W. Hinton, CPA, CGFM \n \n SECTION Ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS \n \n FRANKLIN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30,2010 \n \nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTION ED COSTS \n \nFINDING CONTROL NUMBER AND STATUS \n \nFS-6591-08-01 FS-6591-09-01 \n \nFurther Action Not Warranted Partially Resolved - See Corrective Action/Responses \n \nCORRECTIVE ACTION/RESPONSES \n \nEXPENDlTURES/LIABILITIES /DISBURSEMENTS Inadequate Controls over School Activity Accounts FindingControl Number: FS-6591-09-01 \n \nWe concur with this finding. The accounting system utilized at the school level through the end of fiscal year 2009 limited our ability to implement and monitor all of the appropriate internal controls needed at the school level. In addition, the system did not provide adequate reporting capabilities to management to oversee the school managed accounts. The school system's district level funds are currently managed using the CSI funds accounting software system. This same system has been implemented at the school level for school activity funds effective July 1,2009. The CSI system has a number of design elements that force the use of our internal controls and will provide us more effective monitoring capabilities. The CSI system will be utilized for processing purchase requisitions, receiving goods and services, processing accounts payables, processing payroll, and maintaining personnel records throughout our district and at all schools. In addition, our district has developed a new written financial procedures manual that provides more detailed instructions to our schools in all areas of accounting to include internal control implementation and the use of the CSI system. \n \nPRIOR YEAR FEDERAL AWARD FINDINGS AND OUESTIONED COSTS \n \nNo matters were reported. \n \n SECTION IV FINDINGS AND QUESTIONED COSTS \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30.2010 \n \nI SUMMARY OF AUDITOR'S RESULTS \n \nFinancial Statements \n \nType of auditor's report issue: Governmental Activities; General Fund; Capital Projects Fund; Debt Service Fund; Aggregate Remaining Fund Information \n \nInternal control over financial reporting: Material weakness identified? Significant deficiency identified? \n \nNoncompliance material to financial statements noted: \n \nFederal Awards \n \nInternal Control over major programs: \n= Material weakness identified? \nSignificant deficiency identified? \n \nType of auditor's report issued on compliance for major programs: All major programs \n \nAny audit findings disclosed that are required to be reported in accordance with OMB Circular A-133, Section 510(a)? \n \nIdentification of major programs: \n \nCFDA Number(s1 \n \nName of Federal Program or Cluster \n \nTitle I, Part A Cluster Special Education Cluster State Fiscal Stabilization Fund Cluster \n \nDollar threshold used to distinguish between Type A and Type B programs: \n \nAuditee qualified as low-risk auditee? \n \nUnqualified N 0 Yes \nNo None Reported \nUnqualified \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30,2010 \nII FINANCIAL STATEMENT FINDINGSAND QUESTIONEDCOSTS \nREVENUES/RECEIVABLES/RECEIPTS Inadequate Controls over School Activity Accounts Significant Deficiency Finding Control Number: FS-6591-10-01 \nCondition: This is a repeat finding (FS-6591-09-01, FS-6591-08-01, and FS-6591-07-01) from the years ended June 30, 2009, June 30, 2008, and June 30, 2007, respectively. The accounting procedures of the School District were insufficient to provide adequate internal controls over the school activity accounts. \nCriteria: The School District's management is responsible for designing and maintaining internal controls that provide reasonable assurance that transactions are properly processed and reported in accordance with State law, procedures established by the Georgia Department of Education and School District policies and procedures. \nQuestioned Cost: N/A \nInformation: Revenues/Receivables/Receipts Instances were noted where receipts were not collected in a manner consistent with established policies. a A review of transactions revealed several receipts were not deposited in a timely manner. Numerous receipt transactions lacked the appropriate documentation. \nCause: These deficiencies were a result of management's failure to ensure that internal controls were established, implemented and functioning at the school level. \nEffect: Errors and/or irregularities may not be detected in a timely manner. \nRecommendation: Management should establish adequate internal controls and accounting procedures at all schools to ensure that assets are adequately safeguarded. These controls should take into consideration collection procedures, and separation of duties of critical accounting functions. Additionally, monitoring procedures should be implemented to provide reasonable assurance that transactions are processedaccording to established procedures. \nIll FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \nNo matters were reported. \n \n SECTION V MANAGEMENT'S RESPONSES \n \n FRANKLIN COUNTY BOARD OF EDUCATION SCHEDULE OF MANAGEMENT'S RESPONSES \nYEAR ENDED JUNE 30,2010 \n \nFindingControl Number: FS-6591-10-01 \n \nWe concur with this finding. The conversion of school activity account records to the district wide accounting software was implemented for fiscal year 2010, however, one of our schools did not complete the implementation of the system until late in the year and did not implement all of the processes as provided for in our procedures manual. All schools have now completed the conversion to the CSI software system and are now using the software in accordance with local policy and procedures. Personnel changes were also made at the end of fiscal year 2010, and a review of current activity indicates compliance with district policy and procedures. The district has also developed an internal auditing checklist for school activity accounts that will be used during fiscal year 2 0 1 1to help us better monitor compliance with internal control requirements. \n \nContact Person: Telephone: Fax: Email: \n \nMatt McRee, Finance Director (706) 384-4554 (706)-384-7472 mmcree@franklin.kl2.ga.u~ \n \n "}],"pages":{"current_page":1,"next_page":2,"prev_page":null,"total_pages":2,"limit_value":10,"offset_value":0,"total_count":17,"first_page?":true,"last_page?":false},"facets":[{"name":"type_facet","items":[{"value":"Text","hits":17}],"options":{"sort":"count","limit":16,"offset":0,"prefix":null}},{"name":"creator_facet","items":[{"value":"Georgia. Department of Audits and Accounts","hits":11},{"value":"Georgia. 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