{"response":{"docs":[{"id":"dlg_ggpd_1384460361-2024-07-08","title":"Polk School District, Cedartown, Georgia, annual financial report for the fiscal year ended 2023 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":null,"dc_date":["2024-07-08"],"dcterms_description":["Began with: Fiscal year ended June 30, 2014.","Report year covers fiscal year.","Fiscal year ended June 30, 2014, released in 2016? (received via email 7/6/16 from Georgia Dept. of Audits and Accounts); title from PDF cover (Georgia Government Publications database, viewed June 21, 2023).","Fiscal year ended June 30, 2021 (Georgia Government Publications database, viewed June 21, 2023)."],"dc_format":["application/pdf"],"dcterms_identifier":null,"dcterms_language":["eng"],"dcterms_publisher":["Atlanta, Georgia : Department of Audits and Accounts, [2016?]-"],"dc_relation":null,"dc_right":["http://rightsstatements.org/vocab/InC/1.0/"],"dcterms_is_part_of":null,"dcterms_subject":["Polk School District (Ga.)--Appropriations and expenditures--Periodicals.","Education--Georgia--Polk County--Auditing--Periodicals.","Education--Georgia--Polk County--Finance--Statistics--Periodicals.","Georgia Government Documents--Serial"],"dcterms_title":["Polk School District, Cedartown, Georgia, annual financial report for the fiscal year ended 2023 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_1384460361-2024-07-08"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_1384460361-2024-07-08"],"dcterms_temporal":null,"dcterms_rights_holder":null,"dcterms_bibliographic_citation":null,"dlg_local_right":null,"dcterms_medium":["state government records"],"dcterms_extent":null,"dlg_subject_personal":null,"iiif_manifest_url_ss":null,"dcterms_subject_fast":null,"fulltext":"POLK SCHOOL DISTRICT CEDARTOWN, GEORGIA \nANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED \nJUNE 30, 2023 (Including Independent Auditor's Reports) \n \n Polk County School District \n \nTable of Contents \n \nSection I Financial \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 \n3 \n \nD \n \nReconciliation of the Governmental Funds Balance Sheet \n \nto the Statement of Net Position \n \n4 \n \nE \n \nStatement of Revenues, Expenditures and Changes in Fund Balances \n \nGovernmental Funds \n \n5 \n \nF \n \nReconciliation of the Governmental Funds Statement of \n \nRevenues, Expenditures and Changes in Fund Balances \n \nto the Statement of Activities \n \n6 \n \nG \n \nStatement of Fiduciary Net Position \n \nFiduciary Funds \n \n7 \n \nH \n \nStatement of Changes in Fiduciary Net Position \n \nFiduciary Funds \n \n8 \n \nI Notes to the Basic Financial Statements \n \n9 \n \nSchedules \n \nRequired Supplementary Information \n \n1 Schedule of Proportionate Share of the Net Pension Liability \n \nTeachers Retirement System of Georgia \n \n45 \n \n2 Schedule of Contributions  Teachers Retirement System of Georgia \n \n46 \n \n3 Schedule of Proportionate Share of the Net Pension Liability \n \nEmployees' Retirement System of Georgia \n \n47 \n \n4 Schedule of Contributions  Employees' Retirement System of Georgia \n \n48 \n \n5 Schedule of Proportionate Share of the Net Pension Liability \n \nPublic School Employees Retirement System of Georgia \n \n49 \n \n Required Supplementary Information (Continued) \n \n6 Schedule of Proportionate Share of the Net OPEB Liability \n \nSchool OPEB Fund \n \n50 \n \n7 Schedule of Contributions  School OPEB Fund \n \n51 \n \n8 Schedule of Changes in the Net Pension Liability and Related Ratios \n \nSocial Security Replacement Plan \n \n52 \n \n9 Schedule of Contributions  Social Security Replacement Plan \n \n54 \n \n10 Schedule of Investment Returns  Social Security Replacement Plan \n \n55 \n \n11 Notes to the Required Supplementary Information \n \n56 \n \n12 Schedule of Revenues, Expenditures and Changes in Fund \n \nBalances - Budget and Actual General Fund \n \n58 \n \nSupplementary Information \n \n13 Schedule of Expenditures of Federal Awards \n \n59 \n \n14 Schedule of State Revenue \n \n61 \n \n15 Schedule of Approved Local Option Sales Tax Projects \n \n62 \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 \nSummary Schedule of Prior Audit Findings \n \nSection IV Findings and Questioned Costs \nSchedule of Findings and Questioned Costs \n \n Section I Financial \n \n Greg S. Griffin State Auditor \nINDEPENDENT AUDITOR'S REPORT \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 Dr. Katherine Thomas, Superintendent and Members of the Polk County School District \nReport on the Audit of the Financial Statements \nOpinions \nWe have audited the accompanying financial statements of the governmental activities, each major fund, and fiduciary activities of the Polk County School District (School District) as of and for the year ended June 30, 2023, 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. \nIn our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and fiduciary activities of the School District as of June 30, 2023, 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. \nBasis for Opinions \nWe conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. \nWe are required to be independent of the School District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. \nResponsibilities of Management for the Financial Statements \nManagement is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for 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. \n270 Washington Street, SW, Suite 4-101 Atlanta, Georgia 30334 | Phone (404) 656-2180 \n \n In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the School District's ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. \nAuditor's Responsibilities for the Audit of the Financial Statements \nOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. \nIn performing an audit in accordance with GAAS and Government Auditing Standards, we: \n Exercise professional judgment and maintain professional skepticism throughout the audit. \n Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. \n Obtain an understanding of internal control relevant to the audit 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 School District's internal control. Accordingly, no such opinion is expressed. \n Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. \n Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the School District's ability to continue as a going concern for a reasonable period of time. \nWe are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit. \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 is the responsibility of management and, 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 \n \n historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, 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 appropriate evidence to express an opinion or provide any assurance. \nSupplementary 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 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 GAAS. 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 July 8, 2024 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, \nGreg S. Griffin State Auditor \nJuly 8, 2024 \n \n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2023 \nINTRODUCTION \nThe intent of this discussion and analysis is to look at the Polk County School District's (School District) financial performance as a whole. The reader should review the notes to the basic financial statements and the financial statements to enhance their understanding of the School District's financial performance. The School District's financial statements for the fiscal year ended June 30, 2023, 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 Position 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. The fund financial statements provide information about all of the School District's funds. \nFINANCIAL HIGHLIGHTS \nKey financial highlights for fiscal year 2023 are as follows: \nOn the government-wide financial statements: \n Government-wide net position at June 30, 2023 was approximately $12.0 million. Net position reflects the difference between all non-fiduciary assets of the School District including capital assets, net of depreciation, deferred outflows and non-fiduciary liabilities, both short-term and longterm and deferred inflows. The net position at June 30, 2023 of $12.0 million represented a decrease of approximately $2.6 million when compared to the prior year. This decrease is due, in large part, to ongoing significant capital outlay projects. \n The School District had $119.5 million in expenses relating to governmental activities; only $81.3 million of these expenses were offset by program specific charges for services, operating and capital grants and contributions. However, the general revenues (primarily property and sales taxes) of approximately $35.6 million provided additional funding of these expenses. \n As stated above, general revenues accounted for $35.6 million or about 30% of all revenues totaling $116.9 million. Program specific revenues in the form of charges for services, operating and capital grants, and contributions accounted for the balance of these revenues. \n \nGeneral RevenueEqualization 6% \nGeneral RevenueSales Taxes 7% \nGeneral RevenueProperty Taxes 15% \n \nSource of Revenues \nGeneral Revenue- All \nOther 2% \nProgram Revenues 70% \n \ni \n \n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2023 \nOn the fund financial statements: \n Among major funds, the general fund had $107.1 million in revenues and $113.1 million in expenditures. The general fund balance of approximately $23.8 million at June 30, 2023 decreased by approximately $6.0 million from the prior year. \nOVERVIEW OF THE FINANCIAL STATEMENTS \nThese financial statements consist of three parts; management's discussion and analysis (this section), the basic financial statements, including notes to the 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 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 School District, the general fund, capital projects fund, and debt service fund are all considered to be major funds. The School District has no non-major funds as defined by GASB Statement No. 34 for 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. \nGovernment-Wide Statements \nSince the School District has no operations that have been classified as \"Business Activities\", the government-wide financial statements are basically a consolidation of the entire School District's operating funds into one column called governmental activities. In reviewing the government-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 School District's non-fiduciary assets, deferred outflows, liabilities and deferred inflows which 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. \nii \n \n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2023 \nWhen analyzing government-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 that with constraints placed on the use by external sources such \nas creditors, grantors, contributors or laws and regulations. o Unrestricted net position is net position that does 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 non-major funds as defined by generally accepted accounting principles. \nThe School 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 governmental 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 as well as an employer sponsored pension plan. 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 government-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, deferred outflows of resources, total liabilities and deferred inflows of resources, is one indicator of the financial condition of the School 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 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. \niii \n \n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2023 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 non-financial factors should be considered in assessing the overall health of the School District. The School District had approximately $104.7 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 position, it must be recognized that this portion of the net position is not available for future spending. The deficit balance of unrestricted net position of approximately $101.7 million reflects the net pension liability adjustments as required by GASB Statement No. 68 and GASB Statement No. 71 and the OPEB liability adjustments as required by GASB Statement No. 75. \niv \n \n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2023 \n \nTable 1 provides a summary of the School District's net position for this fiscal year as compared to the prior year. \nTable 1 Net Position \n \nGovernmental Activities \n \nFiscal Year \n \nFiscal Year \n \n2023 \n \n2022 \n \nAssets Current and Other Assets Capital Assets, Net \n \n$ 64,024,561 $ 79,919,741 \n \n118,842,655 \n \n109,446,229 \n \nTotal Assets \n \n182,867,216 \n \n189,365,970 \n \nDeferred Outflows of Resources Related Defined Benefit Pension Plans Related OPEB Plan \n \n62,735,033 14,134,987 \n \n26,235,313 11,275,092 \n \nTotal Deferred Outflows of Resources \n \n76,870,020 \n \n37,510,405 \n \nLiabilities Current and Other Liabilities Long-Term Liabilities Net Pension Liability Net OPEB Liability \n \n14,679,779 40,443,720 122,525,532 42,311,444 \n \n16,920,587 46,834,309 33,717,547 43,940,016 \n \nTotal Liabilities \n \n219,960,475 \n \n141,412,459 \n \nDeferred Inflows of Resources Related to Defined Benefit Pension Plans Related OPEB Plan \n \n1,972,902 25,818,586 \n \n46,050,855 24,824,048 \n \nTotal Deferred Inflows of Resources \n \n27,791,488 \n \n70,874,903 \n \nNet Position Net Investment in Capital Assets Restricted Unrestricted (Deficit) \n \n104,681,378 8,987,229 \n(101,683,334) \n \n90,682,727 14,307,001 (90,400,715) \n \nTotal Net Position \n \n$ 11,985,273 $ 14,589,013 \n \nv \n \n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2023 \n \nTotal net position decreased by $2.6 million in fiscal year 2023 from the prior year. This change in net position is detailed in Table 2 below. Table 2 also shows the change in net position as compared to the prior fiscal year. \n \nTable 2 Change in Net Position \n \nRevenues Program Revenues: Charges for Services Operating Grants and Contributions Capital Grants and Contributions \n \nGovernmental Activities \n \nFiscal Year \n \nFiscal Year \n \n2023 \n \n2022 \n \n$ 2,906,596 $ 2,688,881 \n \n76,857,132 \n \n77,080,268 \n \n1,545,223 \n \n36,000 \n \nTotal Program Revenues \n \n81,308,951 \n \n79,805,149 \n \nGeneral Revenues: Taxes Property Taxes For Maintenance and Operations Other Taxes Sales Taxes Special Purpose Local Option Sales Tax For Debt Services Other Taxes Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous \n \n17,685,015 60,722 \n \n17,038,784 66,198 \n \n7,928,417 326,349 \n6,939,729 1,060,397 1,571,330 \n \n7,384,750 387,686 \n8,793,135 105,312 \n1,468,484 \n \nTotal General Revenues \n \n35,571,959 \n \n35,244,349 \n \nTotal Revenues \n \n116,880,910 \n \n115,049,498 \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 Long-Term Debt \n \n76,158,764 \n6,365,320 3,140,536 1,418,301 1,319,197 5,859,513 1,363,217 10,515,408 4,938,695 \n492,786 192,604 \n163,905 6,373,778 1,182,626 \n \n60,412,617 \n4,794,646 2,313,918 1,119,020 1,119,349 4,438,058 1,486,285 11,782,136 3,814,558 \n567,752 152,688 \n122,887 5,388,800 \n563,155 \n \nTotal Expenses \n \n119,484,650 \n \n98,075,869 \n \nChange in Net Position \n \n$ (2,603,740) $ 16,973,629 \n \nvi \n \n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2023 \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 Year \n \nFiscal Year \n \n2023 \n \n2022 \n \nNet Cost of Services \n \nFiscal Year \n \nFiscal Year \n \n2023 \n \n2022 \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 Food Services Interest on Long-Term Debt \n \n$ 76,158,764 $ 60,412,617 $ 22,760,185 $ 4,284,606 \n \n6,365,320 3,140,536 1,418,301 1,319,197 5,859,513 1,363,217 10,515,408 4,938,695 \n492,786 192,604 \n \n4,794,646 2,313,918 1,119,020 1,119,349 4,438,058 1,486,285 11,782,136 3,814,558 \n567,752 152,688 \n \n1,217,989 461,872 234,110 (264,143) \n2,944,774 1,362,749 5,192,421 3,110,855 \n381,133 126,591 \n \n705,328 649,314 (96,781) (362,848) 1,458,275 1,454,746 8,685,385 2,371,220 456,350 \n86,648 \n \n163,905 6,373,778 1,182,626 \n \n122,887 5,388,800 \n563,155 \n \n147,053 (682,516) 1,182,626 \n \n122,887 (2,107,565) \n563,155 \n \nTotal Expenses \n \n$ 119,484,650 $ 98,075,869 $ 38,175,699 $ 18,270,720 \n \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 and other financing sources of $120.6 million and total expenditures of $134.0 million in fiscal year 2023. Total governmental fund balances of approximately $49.1 million at June 30, 2023, decreased approximately $13.4 million from the prior year. \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 2023, the School District amended its general fund budget as needed. \nvii \n \n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2023 \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 $107.1 million were more than the final budgeted amount of $105.4 million by $1.7 million. This can be attributed to receiving far more state funds than originally expected. \nThe general fund's final actual expenditures of $113.1 million were less than the final budget amount of $117.8 million by approximately $4.7 million. The School District believes it effectively managed its budget during the fiscal year. \nCAPITAL ASSETS AND DEBT ADMINISTRATION \nCapital Assets \nAt fiscal year ended June 30, 2023, the School District had $118.8 million invested in capital assets, net of accumulated depreciation, all in governmental activities. These assets are made up of a broad range of items including buildings and improvement, land, land improvements, food service, transportation and maintenance equipment. Table 4 reflects a summary of these balances, net of accumulated depreciation, as compared to the prior fiscal year. \nTable 4 Capital Assets (Net of Depreciation) \n \nGovernmental Activities \n \nFiscal Year \n \nFiscal Year \n \n2023 \n \n2022 \n \nLand \n \n$ \n \n2,384,621 $ \n \n2,384,621 \n \nConstruction In Progress \n \n8,050,131 \n \n3,152,911 \n \nBuilding and Improvements \n \n97,888,085 \n \n97,522,453 \n \nEquipment \n \n3,791,345 \n \n3,088,278 \n \nLand Improvements \n \n6,728,473 \n \n3,297,966 \n \nTotal \n \n$ 118,842,655 $ 109,446,229 \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 POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2023 \nDebt Administration \nAt June 30, 2023, the School District had $36.1 million in bonds outstanding with $4.3 million due within one year. \nTable 5 Debt at June 30 \n \nBond Debt \n \n$ \n \nFinanced Purchases \n \nGovernmental Activities \n \nFiscal Year \n \nFiscal Year \n \n2023 \n \n2022 \n \n36,125,000 $ - \n \n41,625,000 171,392 \n \nTotal \n \n$ $36,125,000 $ $41,796,392 \n \nNet Pension and OPEB Liabilities \nAt June 30, 2023 the School District reported liabilities for its proportionate share of the net pension liability. Reporting this liability was required by GASB Statement No. 68, GASB Statement No. 71 and GASB Statement No. 75. \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 School District is financially stable. The School District's operating millage for 2022 was 14.110. It was rolled back in 2023 to 13.927. \n The general fund had a fund balance as of June 30, 2023 of $23.8 million which is down $6.0 million from the prior year. \n The School District is scheduled to receive a $3,601,928 increase of state revenue for the fiscal year 2024. The general fund is healthy enough to offset the payroll increases. \n During the COVID Pandemic, the School District received CARES and ESSER monies to help with extra expenditures, staff retention, and new positions needed. \n The School District will continue to renovate the existing facilities to accommodate any growth as needed. The School District plans to fund additional capital outlays with the one percent local sales tax revenue, general obligation bonds and state capital outlay grants. A Fine Arts Building has been started at Rockmart High School. Central office, turf, and HVAC improvements have been made. Technology upgrades will continue to be made. Additions and modifications will be done as needed. In addition, safety measures have and will continue to be addressed. Polk County School District formed its own Police Department with an officer at every school. \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 Mrs. Melissa Alred, Finance Director, Polk County School District, 612 South College Street, Cedartown, Georgia 30125. You may also email your questions to Mrs. Alred at malred@polk.k12.ga.us. \nix \n \n Polk County School District \n \n POLK COUNTY SCHOOL DISTRICT STATEMENT OF NET POSITION JUNE 30, 2023 \nASSETS Cash and Cash Equivalents Investments Accounts Receivable, Net \nTaxes State Government Federal Government Other Inventories Capital Assets, Non-Depreciable Capital Assets, Depreciable (Net of Accumulated Depreciation) \nTotal Assets \nDEFERRED OUTFLOWS OF RESOURCES Related to Defined Benefit Pension Plans Related to OPEB Plan \nTotal Deferred Outflows of Resources \nLIABILITIES Accounts Payable Salaries and Benefits Payable Interest Payable Contracts 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 Related to Defined Benefit Pension Plans Related to OPEB Plan \nTotal Deferred Inflows of Resources \nNET POSITION Net Investment in Capital Assets Restricted for \nContinuation of Federal Programs Debt Service Unrestricted (Deficit) \nTotal Net Position \n \nEXHIBIT \"A\" \n \nGOVERNMENTAL ACTIVITIES \n \n$ \n \n50,158,501.96 \n \n10,023.57 \n \n2,166,210.18 7,636,821.84 3,797,615.93 \n88,635.89 166,752.08 10,434,751.73 108,407,903.25 182,867,216.43 \n \n62,735,033.19 14,134,987.00 76,870,020.19 \n \n1,550,870.93 11,320,183.28 \n602,083.34 1,043,169.80 \n163,471.67 122,525,532.00 \n42,311,444.00 \n4,339,987.48 36,103,733.04 219,960,475.54 \n \n1,972,902.00 25,818,586.00 27,791,488.00 \n \n104,681,377.78 \n \n6,519,925.12 2,467,304.18 (101,683,334.00) \n \n$ \n \n11,985,273.08 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 1 - \n \n POLK COUNTY SCHOOL DISTRICT STATEMENT OF ACTIVITIES \nFOR THE YEAR ENDED JUNE 30, 2023 \n \nEXHIBIT \"B\" \n \nGOVERNMENTAL ACTIVITIES 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 Long-Term Debt \nTotal Governmental Activities \n \nEXPENSES \n \nCHARGES FOR SERVICES \n \nPROGRAM REVENUES OPERATING GRANTS AND \nCONTRIBUTIONS \n \nCAPITAL GRANTS AND CONTRIBUTIONS \n \nNET (EXPENSES) REVENUES \nAND CHANGES IN NET POSITION \n \n$ 76,158,764.16 $ \n \n196,150.08 $ 52,466,917.30 $ \n \n6,365,320.56 3,140,535.73 1,418,300.82 1,319,197.41 5,859,512.89 1,363,216.94 10,515,407.59 4,938,694.87 \n492,785.91 192,603.79 \n \n2,418,340.15 - \n62,358.57 - \n186,115.77 - \n9,207.75 - \n5,711.64 \n \n2,728,992.17 2,678,663.85 1,121,832.09 1,583,340.30 2,728,623.46 \n468.16 5,313,778.68 1,034,849.61 \n111,652.56 52,898.55 \n \n163,904.99 6,373,777.69 1,182,626.32 \n \n2,122.75 26,589.60 \n- \n \n14,729.02 7,020,386.51 \n- \n \n$ 119,484,649.67 $ \n \n2,906,596.31 $ 76,857,132.26 $ \n \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 Total General Revenues \n \nChange in Net Position \n \nNet Position - Beginning of Year \n \nNet Position - End of Year \n \n735,511.80 $ (22,760,184.98) \n \n792,990.00 7,402.63 \n \n(1,217,988.24) (461,871.88) (234,110.16) 264,142.89 \n(2,944,773.66) (1,362,748.78) (5,192,421.16) (3,110,855.26) \n(381,133.35) (126,590.97) \n \n9,318.03 \n- \n \n(147,053.22) 682,516.45 (1,182,626.32) \n \n1,545,222.46 \n \n(38,175,698.64) \n \n17,685,014.35 60,721.78 \n \n7,928,417.43 326,348.90 \n6,939,729.00 1,060,396.87 1,571,330.29 35,571,958.62 \n \n(2,603,740.02) \n \n14,589,013.10 \n \n$ \n \n11,985,273.08 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 2 - \n \n ASSETS Cash and Cash Equivalents Investments Accounts Receivable, Net \nTaxes State Government Federal Government Other Inventories \nTotal Assets \nLIABILITIES Accounts Payable Salaries and Benefits Payable Contracts Payable Retainages Payable \nTotal Liabilities \nDEFERRED INFLOWS OF RESOURCES Unavailable Revenue - Property Taxes \nFUND BALANCES Nonspendable Restricted Assigned Unassigned \nTotal Fund Balances \nTotal Liabilities, Deferred Inflows of Resources, and Fund Balances \n \nPOLK COUNTY SCHOOL DISTRICT BALANCE SHEET \nGOVERNMENTAL FUNDS JUNE 30, 2023 \n \nEXHIBIT \"C\" \n \nGENERAL FUND \n \nCAPITAL PROJECTS \nFUND \n \nDEBT SERVICE \nFUND \n \nTOTAL \n \n$ \n \n24,280,189.49 $ \n \n20,059,645.22 $ \n \n10,023.57 \n \n- \n \n1,481,711.53 \n \n- \n \n7,636,821.84 \n \n- \n \n3,797,615.93 \n \n- \n \n88,635.89 \n \n- \n \n166,752.08 \n \n- \n \n$ \n \n37,461,750.33 $ \n \n20,059,645.22 $ \n \n5,818,667.25 $ - \n684,498.65 - \n6,503,165.90 $ \n \n50,158,501.96 10,023.57 \n2,166,210.18 7,636,821.84 3,797,615.93 \n88,635.89 166,752.08 \n64,024,561.45 \n \n$ \n \n1,458,084.27 $ \n \n11,320,183.28 \n \n- \n \n- \n \n12,778,267.55 \n \n92,786.66 $ - \n1,043,169.80 163,471.67 \n1,299,428.13 \n \n- $ - \n \n1,550,870.93 11,320,183.28 \n1,043,169.80 163,471.67 \n14,077,695.68 \n \n840,579.27 \n \n- \n \n- \n \n840,579.27 \n \n166,752.08 6,353,173.04 1,513,406.63 15,809,571.76 23,842,903.51 \n \n18,760,217.09 \n18,760,217.09 \n \n6,503,165.90 \n6,503,165.90 \n \n166,752.08 31,616,556.03 \n1,513,406.63 15,809,571.76 49,106,286.50 \n \n$ \n \n37,461,750.33 $ \n \n20,059,645.22 $ \n \n6,503,165.90 $ \n \n64,024,561.45 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 3 - \n \n POLK COUNTY SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \nTO THE STATEMENT OF NET POSITION JUNE 30, 2023 \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. Land Construction in progress Buildings and improvements Equipment Land improvements Accumulated depreciation \nSome liabilities are not due and payable in the current period and, therefore, are not reported in the funds. Net 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. Related 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. Bonds payable Accrued interest payable Compensated absences payable Unamortized bond premiums \nNet position of governmental activities (Exhibit \"A\") \n \n$ \n \n49,106,286.50 \n \n$ \n \n2,384,621.10 \n \n8,050,130.63 \n \n137,230,520.60 \n \n8,681,160.32 \n \n8,624,486.73 \n \n(46,128,264.40) \n \n118,842,654.98 \n \n$ \n \n(122,525,532.00) \n \n(42,311,444.00) \n \n(164,836,976.00) \n \n$ \n \n60,762,131.19 \n \n(11,683,599.00) \n \n49,078,532.19 840,579.27 \n \n$ \n \n(36,125,000.00) \n \n(602,083.34) \n \n(348,846.15) \n \n(3,969,874.37) \n \n(41,045,803.86) \n \n$ \n \n11,985,273.08 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 4 - \n \n POLK COUNTY SCHOOL DISTRICT STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES \nGOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2023 \n \nEXHIBIT \"E\" \n \nREVENUES Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous Total Revenues \nEXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Enterprise Operations Food Services Operation Capital Outlay Debt Services Principal Dues and Fees Interest Total Expenditures \nRevenues over (under) Expenditures \nOTHER FINANCING SOURCES (USES) Transfers In Transfers Out Total Other Financing Sources (Uses) Net 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$ \n \n17,823,904.92 $ \n \n326,348.90 \n \n58,978,606.31 \n \n25,555,018.40 \n \n2,906,596.31 \n \n5,072.43 \n \n1,466,184.30 \n \n107,061,731.57 \n \n- $ 752,232.46 801,183.85 105,145.99 1,658,562.30 \n \n- $ 7,928,417.43 \n254,140.59 8,182,558.02 \n \n17,823,904.92 8,254,766.33 \n59,730,838.77 25,555,018.40 \n2,906,596.31 1,060,396.87 1,571,330.29 116,902,851.89 \n \n67,827,331.29 \n6,254,746.08 2,982,489.22 1,339,322.12 1,310,694.02 5,500,017.61 1,328,274.92 11,152,262.73 5,547,290.27 \n463,706.27 138,637.71 163,758.77 6,751,925.52 2,148,163.01 \n171,392.13 - \n6,407.87 113,086,419.54 \n(6,024,687.97) \n \n- \n326,540.50 9,642,888.87 \n2,155.00 \n9,971,584.37 (8,313,022.07) \n \n- \n7,000.00 - \n5,500,000.00 - \n1,703,194.44 7,210,194.44 \n972,363.58 \n \n67,827,331.29 \n6,254,746.08 2,982,489.22 1,339,322.12 1,317,694.02 5,500,017.61 1,328,274.92 11,478,803.23 5,547,290.27 \n463,706.27 138,637.71 163,758.77 6,751,925.52 11,791,051.88 \n5,671,392.13 2,155.00 \n1,709,602.31 130,268,198.35 (13,365,346.46) \n \n(6,024,687.97) \n \n3,722,014.55 - \n3,722,014.55 (4,591,007.52) \n \n(3,722,014.55) (3,722,014.55) (2,749,650.97) \n \n3,722,014.55 (3,722,014.55) \n(13,365,346.46) \n \n29,867,591.48 \n \n23,351,224.61 \n \n9,252,816.87 \n \n62,471,632.96 \n \n$ \n \n23,842,903.51 $ \n \n18,760,217.09 $ \n \n6,503,165.90 $ \n \n49,106,286.50 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 5 - \n \n POLK COUNTY SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF \nREVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2023 \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. Capital 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. Amortization of bond premium Bond principal retirements Financed purchase payments \nDistrict pension/OPEB 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. Pension 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. Accrued interest on issuance of bonds Compensated absences \nChange in net position of governmental activities (Exhibit \"B\") \n \n$ \n \n(13,365,346.46) \n \n$ \n \n13,022,270.32 \n \n(3,625,844.77) \n \n9,396,425.55 (78,168.79) \n \n$ \n \n739,987.48 \n \n5,500,000.00 \n \n171,392.13 \n \n6,411,379.61 \n \n$ \n \n(8,230,311.67) \n \n3,493,929.00 \n \n(4,736,382.67) \n \n$ \n \n(210,856.49) \n \n(20,790.77) \n \n(231,647.26) \n \n$ \n \n(2,603,740.02) \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 6 - \n \n ASSETS Cash and Cash Equivalents Investments \nTotal Assets \nNET POSITION Employee's Pension Benefits Held in Trust for Private Purposes \n \nPOLK COUNTY SCHOOL DISTRICT STATEMENT OF FIDUCIARY NET POSITION \nFIDUCIARY FUNDS JUNE 30, 2023 \n \nEXHIBIT \"G\" \n \nPRIVATE PURPOSE TRUSTS \n \nPENSION TRUST FUND December 31, 2022 \n \n$ \n \n9,095.72 $ \n \n- \n \n- \n \n4,616,566.20 \n \n$ \n \n9,095.72 $ \n \n4,616,566.20 \n \n$ \n \n4,616,566.20 \n \n$ \n \n9,095.72 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 7 - \n \n POLK COUNTY SCHOOL DISTRICT STATEMENT OF CHANGES IN FIDCUCIARY NET POSITION \nFIDUCIARY FUNDS YEAR ENDED JUNE 30, 2023 \n \nEXHIBIT \"H\" \n \nADDITIONS Contributions Employer Contributions Investment Earnings Net Decrease in Fair Value of Investments \nTotal Additions \nDEDUCTIONS Administrative Expenses Benefits Paid to Participants \nTotal Deductions \nChange in Net Position \nNet Position - Beginning \nNet Position - Ending \n \nPRIVATE PURPOSE TRUSTS \n \nPENSION TRUST FUND December 31, 2022 \n \n$ \n \n- $ \n \n375,595.00 \n \n- \n \n(822,171.00) \n \n- \n \n(446,576.00) \n \n- \n \n18,711.00 \n \n- \n \n402,300.80 \n \n- \n \n421,011.80 \n \n- \n \n(867,587.80) \n \n9,095.72 \n \n5,484,154.00 \n \n$ \n \n9,095.72 $ \n \n4,616,566.20 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 8 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \n \nNOTE 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY \nReporting Entity \nThe Polk County School District (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, deferred outflows of resources, deferred inflows of resources 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. \n \n- 9 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \n \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. \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), bond proceeds and grants from Georgia State Financing and Investment Commission 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 longterm principal and interest. \nThe School District reports the following fiduciary fund types: \n Private purpose trust funds are used to report all trust arrangements, other than those properly reported elsewhere, in which principal and income benefit individuals, private organizations or other governments. \n Pension trust fund accounts for the activities of Polk County School District Social Security Replacement Plan, a single employer defined benefit pension plan for the group of employees covered by the Public School Employees Retirement Systems (PSERS). \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 \n \n- 10 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \n \nlevied. 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 certain revenues reported in the governmental funds to be available if they are collected within 60 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 and compensated absences, 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 financed purchases 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 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 2023, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 96, Subscription-Based Information Technology Arrangements. This statement defines subscription-based information technology arrangements and provides uniform guidance for accounting and financial reporting for transactions that meet that definition. Under this statement, a government is required to recognize a subscription liability and an intangible right-to-use asset for contracts that meet the definition of a subscription-based information technology arrangement. The adoption of this statement did not have a material impact on the School District's financial statements. \nFiscal Year End \nAll funds are reported using fiscal years which end of June 30, except defined benefit pension plan (fiduciary fund), which has a fiscal year ending December 31. \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 POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \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. \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. \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 POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \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 \nAll $ 50,000.00 $ 50,000.00 $ 50,000.00 $ 50,000.00 \n \nN/A 20 to 60 years 25 to 60 years \n5 to 50 years 10 to 20 years \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. \nCompensated Absences \nCompensated absences payable consists of vacation leave employees earned based on services already rendered. \nVacation leave of 10 days is awarded annually to all full-time personnel employed on a twelve-month basis with less than 15 years of experience and 15 days annually to all full-time personnel employed on a twelve-month basis with between 15 and 40 years of experience. Twelve-month employees with 40 or more years of services to the School District are eligible for 5 additional vacation days annually. No other employees are eligible to earn vacation leave. \nFor twelve-month employees with 15 or more years of experience, all unused vacation days may be carried forward into the next employment year up to and including June 30. This is a maximum of 15 days earned from previous year. Upon expiration of this limit, a maximum of 5 unused vacation days may be carried forward. Therefore, this employee could have a maximum of 20 days of acquired vacation at the start of a new fiscal year. \nFor twelve-month employees with less than 15 years of experience, all unused vacation days may be carried forward into the next employment year up to and including June 30. This is a maximum of 10 days earned from previous year. Upon expiration of this limit, a maximum of 5 unused vacation days may be carried forward. Therefore, this employee could have a maximum of 15 days of acquired vacation at the start of a new fiscal year. \nUpon terminating employment, the School District pays all unused and unforfeited vacation benefits to employees. Accordingly, vacation benefits are accrued as a liability in the government-wide financial statements. A liability for these amounts is reported in the governmental fund financial statements only if they have matured, for example, as a result of employee resignations and retirements by fiscal-year end. \n- 13 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \n \nMembers of the Teachers Retirement System of Georgia (TRS) may apply unused sick leave toward early retirement. The liability for early retirement will be borne by TRS rather than by the individual School Districts. Otherwise, sick leave does not vest with the employee, and no liability is reported in the School District's financial statements. \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 straightline 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. \nPost-Employment 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 Post-Employment 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. \n \n- 14 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \n \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 Polk County Board of Commissioners adopted the property tax levy for the 2022 tax digest year (calendar year) on August 29, 2022 (levy date) based on property values as of January 1, 2022. Taxes were due on December 1, 2022 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2022 tax digest are reported as revenue in the governmental funds for fiscal year 2023. The Polk 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, 2023, for maintenance and operations amounted to $15,332,046.27. \nThe tax millage rate levied for the 2022 tax digest year (calendar year) for the School District was as follows (a mill equals $1 per thousand dollars of assessed value): \n \nSchool Operations \n \n13.927 mills \n \nAdditionally, Title Ad Valorem Tax revenues, at the fund reporting level, amounted to $2,431,136.87 during fiscal year ended June 30, 2023. \nSales Taxes \nEducation Special Purpose Local Option Sales Tax (ESPLOST), at the fund reporting level, during the year amounted to $7,928,417.43 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 \n- 15 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \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 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, CASH EQUIVALENTS AND INVESTMENTS \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- 16 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \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, 2023, the School District had deposits with a carrying amount of $23,317,743.88, and a bank balance of $27,196,941.24. The bank balances insured by Federal depository insurance were $887,421.37. \nAt June 30, 2023, $26,309,519.87 of the School District's bank balances was exposed to custodial credit risk. This balance was in the State's Secure Deposit Program (SDP). \nThe School District participates in the State's Secure Deposit Program (SDP), a multi-bank pledging pool. The SDP requires participating banks that accept public deposits in Georgia to operate under the policy and procedures of the program. The Georgia Office of State Treasurer (OST) sets the collateral requirements and pledging level for each covered depository. There are four tiers of collateralization levels specifying percentages of eligible securities to secure covered deposits: 25%, 50%, 75%, and 110%. The SDP also provides for collateral levels to be increased in the amount of up to 125% if economic or financial conditions warrants. The program lists the types of eligible criteria. The OST approves authorized custodians. \nIn accordance with the SDP, if a covered depository defaults, losses to public depositors are first satisfied with any applicable insurance, followed by demands of payment under any letters of credit or sale of the covered depository collateral. If necessary, any remaining losses are to be satisfied by assessments made against the other participating covered depositories. Therefore, for disclosure purposes, all deposits of the SDP are considered to be fully collateralized. \n \n- 17 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \n \nReconciliation of cash and cash equivalents balances to carrying value of deposits: \n \nCash and cash equivalents \n \nStatement of Net Position \n \n$ \n \nStatement of Fiduciary Net Position \n \n50,158,501.96 9,095.72 \n \nTotal cash and cash equivalents \n \n50,167,597.68 \n \nAdd: Deposits with original maturity of three months or more reported as investments \n \n10,023.57 \n \nLess: Investment pools reported as cash and cash equivalents \nGeorgia Fund 1 \n \n26,859,877.37 \n \nTotal carrying value of deposits - June 30, 2023 \n \n$ 23,317,743.88 \n \nCategorization of Cash Equivalents \nThe School District reported cash equivalents of $26,859,877.37 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, $1.00 per share, which approximates fair value. The pool is an AAAf rated investment pool by Fitch. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2023 was 28 days. \nGeorgia Fund 1, administered by the State of Georgia, Office of the State Treasurer, is not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office of the State Treasurer for the Georgia Fund 1, does not provide for investment in derivatives or similar investments. Additional information on the Georgia Fund 1 is disclosed in the State of Georgia Annual Comprehensive Financial Report, which is publicly available at https://sao.georgia.gov/statewide-reporting/acfr. \n \n- 18 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \n \nCategorization of Investments At June 30, 2023, the School District had the following investments: \n \nInvestment Type \n \nFair Value \n \nOther Investments \n \nMutual Bond Funds \n \n$ \n \n996,599.56 \n \nMutual Equity Funds \n \n3,404,560.65 \n \nMutual Money Market Funds \n \n215,405.99 \n \nTotal Investments \n \n$ 4,616,566.20 \n \nFair Value of Investments \n \nThe School District measures and records its investments using fair value measurement guidelines established by generally accepted accounting principles. These guidelines recognize a three-tiered fair value hierarchy, as follows: \n \nLevel 1: Quoted prices for identical investments in active markets; Level 2: Observable inputs other than quoted market prices; and, Level 3: Unobservable inputs. \n \nAt June 30, the School District had the following investments by fair value level: \n \nInvestments by fair value level: \n \nFair Value \n \nLevel 1 \n \nMutual Bond Funds Mutual Equity Funds - Domestic Mutual Equity Funds - International Mutual Money Market Funds \n \n$ \n \n996,599.56 $ 996,599.56 \n \n3,172,371.65 \n \n3,172,371.65 \n \n232,189.00 \n \n232,189.00 \n \n215,405.99 \n \n215,405.99 \n \nTotal investments by fair value level \n \n$ 4,616,566.20 $ 4,616,566.20 \n \nInterest Rate Risk \nInterest rate risk is the risk that changes in interest rates of debt investment will adversely affect the fair value of an investment. The School District does not have a formal policy for managing interest rate risk. \nCustodial Credit Risk \nCustodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, the School District will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The School District does not have a formal policy for managing custodial credit risk. \nAt June 30, 2023, $4,401,160.21 of the School District's applicable investments were held by the investment's counterparty, not in the School District's name. \n \n- 19 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \n \nCredit Quality Risk \n \nCredit quality risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. State law limits investments to those prescribed O.C.G.A. 36-83-4. The School District does not have a formal policy that would further limit its investment choices or one that addresses credit risk. \n \nThe investments subject to credit quality risk are reflected below: \n \nRated Debt Investments \n \nFair Value \n \nQuality Ratings Unrated \n \nMutual Bond Fund \n \n$ \n \nMutual Money Market Funds \n \n996,599.56 $ 215,405.99 \n \n996,599.56 215,405.99 \n \n$ 1,212,005.55 $ 1,212,005.55 \n \nConcentration of Credit Risk \nConcentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The School District does not have a formal policy for managing concentration of credit risk. More than 5% of the School District's investments are in Mutual Equity Fund and Mutual Bond Funds. These investments are 74% and 22%, respectively, of the School District's total investments. \n \n- 20 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \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 \nGovernmental Activities Capital Assets, \nNot Being Depreciated: Land Construction in Progress \n \nBalances July 1, 2022 \n \nIncreases \n \nDecreases \n \nTransfers \n \nBalances June 30, 2023 \n \n$ 2,384,621.10 $ \n \n- $ \n \n3,152,911.39 11,505,774.44 \n \n- $ \n \n- $ 2,384,621.10 \n \n- \n \n(6,608,555.20) \n \n8,050,130.63 \n \nTotal Capital Assets Not Being Depreciated \n \n5,537,532.49 11,505,774.44 \n \n- \n \n(6,608,555.20) 10,434,751.73 \n \nCapital Assets, Being Depreciated Buildings and Improvements Equipment Land Improvements \nLess Accumulated Depreciation: Buildings and Improvements Equipment Land Improvements \n \n134,006,443.37 8,091,792.32 4,934,903.88 \n \n159,059.99 1,211,391.00 \n146,044.89 \n \n622,023.00 \n- \n \n3,065,017.24 - \n3,543,537.96 \n \n137,230,520.60 8,681,160.32 8,624,486.73 \n \n36,483,990.61 5,003,514.50 1,636,937.52 \n \n2,858,444.59 508,323.96 259,076.22 \n \n622,023.00 \n- \n \n- \n \n39,342,435.20 \n \n- \n \n4,889,815.46 \n \n- \n \n1,896,013.74 \n \nTotal Capital Assets, Being Depreciated, Net \n \n103,908,696.94 (2,109,348.89) \n \n- \n \n6,608,555.20 108,407,903.25 \n \nGovernmental Activities Capital Assets - Net \n \n$ 109,446,229.43 $ 9,396,425.55 $ \n \n- $ \n \n- $ 118,842,654.98 \n \nCurrent year depreciation expense by function is as follows: \n \nInstruction \n \nSupport Services \n \nMaintenance and Operation of Plant \n \n$ \n \nStudent Transportation Services \n \nFood Services \n \n$ \n35,681.53 371,014.25 \n \n$ \n \n3,174,235.05 \n406,695.78 44,913.94 \n3,625,844.77 \n \n- 21 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \n \nNOTE 6: INTERFUND TRANSFERS \n \nInterfund transfers for the year ended June 30, 2023, consisted of the following: \n \nTransfer to \n \nTransfer From Debt Service \nFund \n \nCapital Projects Fund $ 3,722,014.55 \n \nTransfers are used to move Special Purpose Local Option Sales Tax (SPLOST) revenues collected by the debt service fund to the capital projects fund for the payment of cost associated with construction projects approved by the Special Purpose Local Option Sales Tax (SPLOST) referendum. \n \nNOTE 7: LONG-TERM LIABILITIES \n \nThe changes in long-term liabilities during the fiscal year for governmental activities were as follows: \n \nBalance July 1, 2022 \n \nGovernmental Activities \n \nBalance \n \nAdditions \n \nDeductions \n \nJune 30, 2023 \n \nDue Within One Year \n \nGeneral Obligation (G.O.) Bonds $ Qualified Zone Academy Bonds \nTotal Bond Debt \n \n39,625,000.00 $ 2,000,000.00 \n41,625,000.00 \n \n- $ 3,500,000.00 $ 36,125,000.00 $ 3,600,000.00 \n \n- \n \n2,000,000.00 \n \n- \n \n- \n \n- \n \n5,500,000.00 \n \n36,125,000.00 \n \n3,600,000.00 \n \nCompensated Absences (1) Financed Purchases Unamortized Bond Premiums \n \n328,055.38 171,392.13 4,709,861.85 \n \n106,315.84 - \n \n85,525.07 171,392.13 739,987.48 \n \n348,846.15 - \n3,969,874.37 \n \n739,987.48 \n \n$ 46,834,309.36 $ 106,315.84 $ 6,496,904.68 $ 40,443,720.52 $ 4,339,987.48 \n \n(1) The portion of compensated absences due within one year has been determined to be immaterial to the basic financial statements. \nGeneral Obligation Bonds \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. \nThe School District's outstanding general obligation bonds related to governmental activities of $11,125,000.00 and $25,000,000.00 contain a provision that in the event of a nonpayment, the State Board is authorized to and must withhold from any state appropriations to which the School District may be entitled and apply so much thereof as shall be necessary to the payment of the principal and interest on such indebtedness then due. \n \n- 22 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \n \nGeneral 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 2018 General Government - Series 2022 \n \n4.00 - 5.00% 5.00% \n \n3/1/2018 5/11/2022 \n \n3/1/2026 $ 18,050,000.00 $ 11,125,000.00 \n \n3/1/2031 \n \n25,000,000.00 \n \n25,000,000.00 \n \n$ 43,050,000.00 $ 36,125,000.00 \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 \n2024 2025 2026 2027 2028 2029 - 2031 \n \n$ 3,600,000.00 $ 3,700,000.00 3,825,000.00 3,650,000.00 5,000,000.00 \n16,350,000.00 \n \n1,806,250.00 $ 1,626,250.00 1,441,250.00 1,250,000.00 1,067,500.00 1,660,000.00 \n \n739,987.48 739,987.48 637,222.23 431,691.76 431,691.76 989,293.66 \n \nTotal Principal and Interest $ 36,125,000.00 $ 8,851,250.00 $ 3,969,874.37 \n \nCompensated Absences \nCompensated absences represent obligations of the School District relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. Typically, the general fund is the fund used to liquidate this long-term debt. The School District uses the vesting method to compute compensated absences. \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. 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. \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- 23 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \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 \nEstimates \n \nClaims Paid \n \nEnd of Year Liability \n \n2022 $ \n \n- $ \n \n18,566.60 $ \n \n18,566.60 $ \n \n- \n \n2023 $ \n \n- $ \n \n1,681.89 $ \n \n1,681.89 $ \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 9: FUND BALANCE CLASSIFICATION DETAILS \n \nThe School District's financial statements include the following amounts presented in the aggregate at June 30, 2023: \n \nNonspendable Inventories \nRestricted Continuation of Federal Programs $ Capital Projects Debt Service \nAssigned School Activity Accounts \nUnassigned \n \n$ \n6,353,173.04 18,760,217.09 \n6,503,165.90 \n \n166,752.08 \n31,616,556.03 1,513,406.63 \n15,809,571.76 \n \nFund Balance, June 30, 2023 \n \n$ \n \n49,106,286.50 \n \nWhen multiple categories of fund balance are available for an 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- 24 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \n \nNOTE 10: SIGNIFICANT COMMITMENTS \nCommitments under Construction Contracts The following is an analysis of significant outstanding construction or renovation contracts executed by the School District as of June 30, 2023. \n \nProject \n \nUnearned Executed Contracts (1) \n \nPayments through June 30, 2023 (2) \n \nBus Barn \n \n$ \n \nCedartown Middle School Modular \n \nCherokee Elementary School Modular \n \nCedartown High School Modular \n \nCherokee Elementary School HVAC \n \nNorthside Elementary Cafeteria \n \nRockmart High School Fine Arts \n \nRockmart High School Modular \n \nRockmart High School Softball Locker \n \nWestside Elementary School Modular \n \n97,350.00 $ 2,000.00 \n198,796.96 543,634.06 390,629.35 700,046.36 12,668,917.64 555,000.00 \n69,243.88 6,899.41 \n \n81,350.00 1,100,057.60 1,014,224.04 \n749,061.94 723,955.00 1,827,424.00 980,981.14 185,000.00 \n80,027.12 1,054,457.02 \n \n$ \n \n15,232,517.66 $ \n \n7,796,537.86 \n \n(1) The amounts described are not reflected in the basic financial statements. (2) Payments include contracts and 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. \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. \n \n- 25 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \n \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 post-employment 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 $1,737,597.00 for the year ended June 30, 2023. 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, 2023, the School District reported a liability of $42,311,444.00 for its proportionate share of the net OPEB liability. The net OPEB liability was measured as of June 30, 2022. The total OPEB liability used to calculate the net OPEB liability was based on an actuarial valuation as of June 30, 2021. An expected total OPEB liability as of June 30, 2022 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, 2022. At June 30, 2022, the School District's proportion was 0.427251%, which was an increase of 0.021557% from its proportion measured as of June 30, 2021. \n \n- 26 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \n \nFor the year ended June 30, 2023, the School District recognized OPEB expense of ($1,756,332.00). At June 30, 2023, the School District reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: \n \nOPEB Deferred Outflows of Resources \n \nDeferred Inflows of Resources \n \nDifferences between expected and actual experience \n \n$ 1,688,887.00 $ 16,629,679.00 \n \nChanges of assumptions \n \n6,444,119.00 \n \n8,557,548.00 \n \nNet difference between projected and actual \n \nearnings on OPEB plan investments \n \n258,088.00 \n \n- \n \nChanges in proportion and differences between School District contributions and proportionate share of contributions \n \n4,006,296.00 \n \n631,359.00 \n \nSchool District contributions subsequent to \n \nthe measurement date \n \n1,737,597.00 \n \n- \n \nTotal \n \n$ 14,134,987.00 $ 25,818,586.00 \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, 2024. 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 \n2024 2025 2026 2027 2028 Thereafter \n \n$ (4,317,371.00) \n \n$ (3,117,990.00) \n \n$ (2,089,810.00) \n \n$ (2,670,100.00) \n \n$ (1,139,628.00) \n \n$ \n \n(86,297.00) \n \n- 27 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \n \nActuarial Assumptions: The total OPEB liability as of June 30, 2022 was determined by an actuarial valuation as of June 30, 2021 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, 2022: \n \nOPEB: \n \nInflation \n \n2.50% \n \nSalary increases \n \n3.00%  8.75%, including inflation \n \nLong-term expected rate of return \nHealthcare cost trend rate \n \n7.00%, compounded annually, net of investment expense, and including inflation \n \nPre-Medicare Eligible \n \n6.50% \n \nMedicare Eligible \n \n5.00% \n \nUltimate trend rate \n \nPre-Medicare Eligible \n \n4.50% \n \nMedicare Eligible \n \n4.50% \n \nYear of Ultimate trend rate \n \nPre-Medicare Eligible \n \n2029 \n \nMedicare Eligible \n \n2023 \n \nThe Plan currently uses mortality tables that vary by age, gender, and health status (i.e. disabled or not disabled) as follows: \n \n For TRS members: Post-retirement mortality rates for service retirements and beneficiaries were based on the Pub-2010 Teachers Headcount Weighted Below Median Healthy Retiree mortality table (ages set forward one year and adjusted 106%) with the MP-2019 Projection scale applied generationally. The rates of improvement were reduced by 20% for all years prior to the ultimate rate. Post-retirement mortality rates for disability retirements were based on the Pub-2010 Teachers Mortality Table for Disabled Retirees (ages set forward one year and adjusted 106%) with the MP-2019 Projection scale applied generationally. The rates of improvement were reduced by 20% for all years prior to the ultimate rate. The Pub-2010 Teachers Headcount Weighted Below Median Employee mortality table with ages set forward one year and adjusted 106% was used for death prior to retirement. Future improvement in mortality rates was assumed using the MP-2019 projection scale generationally. These rates of improvement were reduced by 20% for all years prior to the ultimate rate. \n For PSERS members: Pre-retirement mortality rates were based on the Pub-2010 General Employee Mortality Table, with no adjustment, with the MP-2019 Projections scale applied generationally. Post-retirement mortality rates for service retirements were based on the Pub-2010 General Healthy Annuitant Mortality Table (ages set forward one year and adjusted 101% for males and 103% for females) with the MP-2019 Projection scale applied generationally. Post-retirement mortality rates for disability retirements were based on the \n \n- 28 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \n \nPub-2010 General Disabled Mortality Table (ages set back three years for males and adjusted 103% for males and 106% for females) with the MP-2019 Projections scaled applied generationally. Post-retirement mortality rates for beneficiaries were based on the Pub-2010 General Contingent Survivor Mortality Table (ages set forward two years and adjust 104% for males and 99% for females) with the MP-2019 Project scale applied generationally. \n \nThe actuarial assumptions used in the June 30, 2021 valuation were based on the results of an actuarial experience study for the pension systems, which covered the five-year period ending June 30, 2018, with the exception of the assumed annual rate of inflation with changed from 2.75% to 2.50%, effective with the June 30, 2018 valuation. \n \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, 2021 valuation were based on a review of recent plan experience done concurrently with the June 30, 2021 valuation. \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 \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 \nFixed income Equities \n \n30.00% 70.00% \n \n2.00% 9.40% \n \nTotal \n \n100.00% \n \n* Net of inflation \nDiscount Rate: In order to measure the total OPEB liability for the School OPEB Fund, a single equivalent interest rate of 3.57% was used as the discount rate, as compared with last year's rate of 2.20%. The plan's fiduciary net position was projected to not be able to make all future benefit payments of current plan members. Therefore, the municipal bond rate as used for the long-term rate of return was applied to all periods of projected benefit payments to determine total OPEB liability. This is comprised mainly of the yield or index rate for 20-year tax-exempt general obligation bonds with an average rating of AA or higher (3.54% per the Municipal Bond Index Rate). The projection of cash flows used to determine the discount rate assumed that contributions from members and from the employers \n \n- 29 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \n \nwill 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 2128. \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 3.57%, 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 (2.57%) or 1-percentage-point higher (4.57%) than the current discount rate: \n \n1% Decrease (2.57%) \n \nCurrent Discount Rate (3.57%) \n \n1% Increase (4.57%) \n \nSchool District's proportionate share of \n \nthe Net OPEB liability \n \n$ \n \n47,859,323.00 $ \n \n42,311,444.00 $ \n \n37,609,372.00 \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 OPEB liability, as well as what the School District's proportionate share of the net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1percentage-point lower or 1-percentage-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 \n \nthe Net OPEB liability \n \n$ \n \n36,456,367.00 $ \n \n42,311,444.00 $ \n \n49,507,309.00 \n \nOPEB Plan Fiduciary Net Position: Detailed information about the OPEB plan's fiduciary net position is available in the Annual Comprehensive Financial Report, which is publicly available at https://sao.georgia.gov/statewide-reporting/acfr. \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 O.C.G.A. 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. \n \n- 30 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \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. \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 2023. The School District's contractually required contribution rate for the year ended June 30, 2023 was 19.98% of annual School District payroll, of which 19.93% of payroll was required from the School District and 0.05% of payroll was required from the State. For the current fiscal year, employer contributions to the pension plan were $10,222,814.47 and $38,191.86 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/financials. \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 \n \n- 31 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \n \npension 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 4.00% of annual compensation, up to $4,200.00, plus 6.00% 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 total required contribution rate for the year ended June 30, 2023 was 31.01% of annual covered payroll for old and new plan members and 27.47% for GSEPS members. The rates include the annual actuarially determined employer contribution rate of 24.67% of annual covered payroll for old and new plan members and 21.59% for GSEPS members, plus 6.34% adjustment to the old and new plan and a 5.88% adjustment to the GSEPS plan for the commencement of cost-of-living adjustments (COLA) prefunding for certain retired ERS members. 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 $42,545.72 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/financials. \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 $15.75, 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. \n \n- 32 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \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 $102,797.00. \n \nPension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions \n \nAt June 30, 2023, the School District reported a liability of $117,400,257.00 for its proportionate share of the net pension liability for TRS ($117,077,554.00) and ERS ($322,703.00). \n \nThe TRS net pension liability reflected a reduction for support provided to the School District by the State of Georgia for certain public school support personnel. The amount recognized by the School District as its proportionate share of the net pension liability, the related State of Georgia support, and the total portion of the net pension liability that was associated with the School District were as follows: \n \nSchool District's proportionate share of the net pension liability \n \n$ 117,077,554.00 \n \nState of Georgia's proportionate share of the net pension liability associated with the School District \n \n480,909.00 \n \nTotal \n \n$ 117,558,463.00 \n \nThe net pension liability for TRS and ERS was measured as of June 30, 2022. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2021. An expected total pension liability as of June 30, 2022 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, 2022. \nAt June 30, 2022, the School District's TRS proportion was 0.360550%, which was an increase of 0.021352% from its proportion measured as of June 30, 2021. At June 30, 2022, the School District's ERS proportion was 0.004832%, which was a decrease of 0.002513% from its proportion measured as of June 30, 2021. \nAt June 30, 2023, 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 $865,123.00. \nThe PSERS net pension liability was measured as of June 30, 2022. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2021. An expected total pension liability as of June 30, 2022 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, 2022. \nFor the year ended June 30, 2023, the School District recognized pension expense of $18,240,710.93 for TRS, $34,809.93 for ERS and $217,405.00 for PSERS and revenue of ($19,696.00) for TRS and $217,405.00 for PSERS. The revenue is support provided by the State of Georgia. For TRS the State of Georgia support is provided only for certain support personnel. \n \n- 33 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \n \nAt June 30, 2023, the School District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: \n \nTRS Deferred Outflows of Resources \n \nDeferred Inflows of Resources \n \nERS Deferred Outflows of Resources \n \nDeferred Inflows of Resources \n \nDifferences between expected and actual experience \n \n$ 4,859,918.00 $ \n \n609,416.00 $ \n \n693.00 $ \n \n2,927.00 \n \nChanges of assumptions \n \n17,623,908.00 \n \n- \n \n57,364.00 \n \n- \n \nNet difference between projected and \n \nactual earnings on pension plan \n \ninvestments \n \n23,002,409.00 \n \n- \n \n37,495.00 \n \n- \n \nChanges in proportion and differences between School District contributions and proportionate share of contributions \n \n4,658,704.00 \n \n177,298.00 \n \n- \n \n56,049.00 \n \nSchool District contributions subsequent to \n \nthe measurement date \n \n10,222,814.47 \n \n- \n \n42,545.72 \n \n- \n \nTotal \n \n$ 60,367,753.47 $ 786,714.00 $ 138,097.72 $ 58,976.00 \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, 2024. 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 \n2024 2025 2026 2027 \n \n$ 13,490,921.00 $ $ 10,674,455.00 $ $ 7,940,033.00 $ $ 17,252,816.00 $ \n \n5,301.00 1,504.00 \n935.00 28,836.00 \n \n- 34 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \n \nActuarial Assumptions: The total pension liability as of June 30, 2022 was determined by an actuarial valuation as of June 30, 2021, using the following actuarial assumptions, applied to all periods included in the measurement: \n \nTeachers Retirement System: \n \nInflation \n \n2.50% \n \nSalary increases \n \n3.00%  8.75%, average, including inflation \n \nInvestment rate of return \n \n6.90%, net of pension plan investment expense, including inflation \n \nPost-retirement benefit increases \n \n1.50% semi-annually \n \nPost-retirement mortality rates for service retirements and beneficiaries were based on the Pub-2010 Teachers Headcount Weighted Below Median Healthy Retiree mortality table (ages set forward one year and adjusted 106%) with the MP-2019 Projection scale applied generationally. The rates of improvement were reduced by 20% for all years prior to the ultimate rate. Post-retirement mortality rates for disability retirements were based on the Pub-2010 Teachers Mortality Table for Disabled Retirees (ages set forward one year and adjusted 106%) with the MP-2019 Projection scale applied generationally. The rates of improvement were reduced by 20% for all years prior to the ultimate rate. The Pub-2010 Teachers Headcount Weighted Below Median Employee mortality table with ages set forward one year and adjusted 106% as used for death prior to retirement. Future improvement in mortality rates was assumed using the MP-2019 projection scale generationally. These rates of improvement were reduced by 20% for all years prior to the ultimate rate. \nThe actuarial assumptions used in the June 30, 2021 valuation were based on the results of an actuarial experience study for the period July 1, 2013  June 30, 2018, with the exception of the investment rate of return and payroll growth assumption. \n \nEmployees' Retirement System: \n \nInflation \n \n2.50% \n \nSalary increases Investment rate of return \n \n3.00%  6.75%, including inflation \n7.00%, net of pension plan investment expense, including inflation \n \n- 35 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \n \nMortality rates are as follows: \n \n The Pub-2010 General Employee Table, with no adjustments, projected generationally with the MP-2019 scale is used for both males and females while in active service. \n The Pub-2010 Family of Tables projected generationally with the MP-2019 Scale and with further adjustments are used for post-retirement mortality assumptions as follows: \n \nParticipant Type Membership Table \n \nSet Forward (+)/ Setback (-) Adjustment to Rates \n \nService Retirees General Healthy Annuitant \n \nMale: +1; Female: +1 \n \nMale: 105%; Female: 108% \n \nDisability Retirees General Disabled \n \nMale: -3; Female: 0 \n \nMale: 103%; Female: 106% \n \nBeneficiaries \n \nGeneral Contingent Survivors Male: +2; Female: +2 \n \nMale: 106%; Female: 105% \n \nThe actuarial assumptions used in the June 30, 2021 valuation were based on the results of an actuarial experience study for the period July 1, 2014  June 30, 2019. \n \nPublic School Employees Retirement System: \n \nInflation \n \n2.50% \n \nSalary increases Investment rate of return \n \nN/A \n7.00%, net of pension plan investment expense, including inflation \n \nPost-retirement benefit increases \n \n1.50% semi-annually \n \nMortality rates are as follows: \n \n The Pub-2010 General Employee Table, with no adjustments, projected generationally with the MP-2019 scale is used for both males and females while in active service. \n The Pub-2010 Family of Tables projected generationally with the MP-2019 Scale and with further adjustments are used for post-retirement mortality assumptions as follows: \n \nParticipant Type \n \nMembership Table \n \nSet Forward (+)/ Setback (-) Adjustment to Rates \n \nService Retirees \n \nGeneral Healthy Below- Male: +2; Female: +2 Median Annuitant \n \nMale: 101%; Female: 103% \n \nDisability Retirees \n \nGeneral Disabled \n \nMale: -3; Female: 0 \n \nMale: 103%; Female: 106% \n \nBeneficiaries \n \nGeneral Below-Median Contingent Survivors \n \nMale: +2; Female: +2 \n \nMale: 104%; Female: 99% \n \nThe actuarial assumptions used in the June 30, 2021 valuation were based on the results of an actuarial experience study for the period July 1, 2014  June 30, 2019. \n \n- 36 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \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 allocation and estimates of arithmetic real rates of return for each major asset class are summarized in the following table: \n \nAsset Class \n \nTRS/ERS/PSERS Target \nAllocation \n \nLong-Term Expected Real Rate of Return* \n \nFixed income Domestic large stocks Domestic small stocks International developed market stocks International emerging market stocks Alternative \n \n30.00% 46.30% \n1.20% 12.30% \n5.20% 5.00% \n \n0.20% 9.40% 13.40% 9.40% 11.40% 10.50% \n \nTotal \n \n100.00% \n \n* Rates shown are net of inflation. \nDiscount Rate: The discount rate used to measure the total TRS pension liability was 6.90%. The discount rate used to measure the total ERS and PSERS pension liability was 7.00%. 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 plans' fiduciary net position were 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- 37 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \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 6.90% and 7.00%, 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 (5.90% and 6.00%) or 1-percentage-point higher (7.90% and 8.00%) than the current rate: \n \nTeachers Retirement System: \n \n1% Decrease (5.90%) \n \nCurrent Discount Rate (6.90%) \n \n1% Increase (7.90%) \n \nSchool District's proportionate share of the net pension liability \n \n$ 176,631,256.00 $ \n \n117,077,554.00 $ 68,444,079.00 \n \nEmployees' Retirement System: \n \n1% Decrease (6.00%) \n \nCurrent Discount Rate (7.00%) \n \n1% Increase (8.00%) \n \nSchool District's proportionate share of \n \nthe net pension liability \n \n$ \n \n429,578.00 $ \n \n322,703.00 $ \n \n232,830.00 \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 publicly available at www.trsga.com/publications and http://www.ers.ga.gov/financials. \n \nPolk County School District Social Security Replacement Plan \nPlan Description: As of January 2004, the Polk County School District established a single employer defined benefit pension plan for the group of employees covered under the Public Service Employees Retirement System (PSERS). Recognizing that PSERS was a limited defined benefit plan that does not meet the requirements of a qualified social security replacement plan, the new plan was established for these employees to meet the requirements of a social security replacement plan. \nThe School District Social Security Replacement Plan (Plan) provides a pension benefit for each participant at retirement, equal to 1.5% of the participant's Average Monthly Compensation multiplied by his Years of Credited Service up to 40 Years of Credited Service. Years of service subsequent to July 1, 1991, are counted for purposes of determining a participant's benefit. The funding method and determination of benefits payable are provided in or authorized by various sections of Title 47 of the Official Code of Georgia Annotated (\"OCGA\"). The Plan does not issue a separate financial report. \nThe employee is always 100% vested in his accrued benefit in the Plan. \nThe Plan is funded by employer contributions held in trust by John Hancock. The Actuary for the Plan is Future Plan by Ascensus. The Actuary determines the Plan liabilities and required contributions on an annual basis. \n \n- 38 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \n \nAs of January 1, 2023, there were 533 Plan participants, consisting of the following: January 1, 2023 \n \nActive plan members \n \n184 \n \nVested terminated participants \n \n247 \n \nRetirees, beneficiaries, and disables participants \n \n102 \n \n533 \nFunding Policy: Employees are neither required nor permitted to make contributions to the Plan. The Polk County School District (Employer) makes contributions required to fund the cost of the benefits provided to its eligible employees by this Plan. The Employer makes such contributions as necessary to fund the Plan in accordance with all applicable minimum funding standards under Georgia Law. \nThe Employer's Annual Required Minimum contribution is the actuarially determined amount necessary to fund the plan benefits. The required contribution for the plan year ending within the current fiscal year is $375,595.00. The current contribution rate is 15.4% of annual covered payroll. \nInvestments: The Plan maintains an investment policy which fosters prudent and sound judgment in the management of plan assets to ensure safety of capital consistent with its fiduciary responsibility to the citizens of Georgia and which conforms to the Plan's investment policy. All investments are consistent with Polk County School District's policy and applicable Federal and state laws. \nInvestments are reported at fair value. Securities are traded on a national or international exchange and are valued at the last reported sales price. The Plan's investment policy requires diversification of assets in an effort to avoid the risk of large losses and maximize the investment return to the Plan consistent with market and economic risk. \nAs of December 31, 2022, the Plan's assets are: \n \nAsset Class \nShort-Term Investments Domestic Equities International Equities Fixed Income \n \n$ \n \n215,405.99 \n \n2,201,308.03 \n \n232,188.66 \n \n1,967,663.52 \n \n$ \n \n4,616,566.20 \n \nFor the plan year ended December 31, 2022, the annual money-weighted rate of return on pension plan investments, net of plan investment expense, was (15.45%). \n \n- 39 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \n \nThe following table summarizes the adopted asset allocation policy at December 31, 2022: \n \nAsset Class \n \nAdopted Asset Allocation \n \nDomestic Equities International Equities Fixed Income Cash and Equivalent \n \n40% to 50% 1% to 5% \n35% to 45% 1% to 10% \n \nTotal \n \n100% \n \nPension Liability, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to the Plan: \nThe components of the net pension liability at January 1, 2022 were as follows: \n \nTotal pension liability Plan fiduciary net position \n \n$ 9,741,841.00 (4,616,566.00) \n \nNet pension liability \n \n$ 5,125,275.00 \n \nThe Plan's fiduciary net position as a percentage of its total pension liability is 47.39%. \nThe net pension liability for the Plan was measured as of December 31, 2022. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of January 1, 2022. An expected total pension liability as of December 31, 2022 was determined using standard roll-forward techniques. \nFor the year ended June 30, 2023, the School District recognized pension expense of $576,050.00 for the Plan. \nAt June 30, 2023, the School District reported deferred outflows and resources and deferred inflows of resources related to the Plan from the following sources: \n \nDeferred Outflows of Resources \n \nDeferred Inflows of Resources \n \nDifference between projected and actual earnings on pension plan investments \nDifferences between expected and actual experiences \nChanges in actuarial assumptions \nTotal \n \n$ \n \n602,183.00 $ \n \n206,001.00 \n \n676,448.00 \n \n580,293.00 \n \n950,551.00 \n \n340,918.00 \n \n$ 2,229,182.00 $ 1,127,212.00 \n \n- 40 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \n \nAmounts reported as deferred outflows of resources and deferred inflows of resources related to the Plan will be recognized in pension expense as follows: \nYear Ended June 30: \n \n2021 2022 2023 2024 2025 2026 \n \n$ 102,046.00 $ 187,851.00 $ 227,509.00 $ 284,252.00 $ 50,250.00 $ 250,062.00 \n \nActuarial Methods and Assumptions: The total pension liability was determined as of January 1, 2023 using the following actuarial assumptions and methods (see the January 1, 2023 actuarial valuation report for other assumptions): \n \nInflation \n \n2.50% \n \nSalary Increases \n \n3.00% \n \nInvestment rate of return \n \n7.00%, net of pension plan investment expense \n \nSingle equivalent discount rate \n \n5.42%, net of pension plan investment expense \n \nMorality rates based on the PubG-2010 with MP-2021. \n \nThe long-term expected rate of return on the Plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return, net of investment expenses and inflation, are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by the expected inflation. Best estimates of arithmetic rates of return for each major asset class, included in the Plan's target asset allocation as of December 31, 2022: \n \nAsset Class \n \nTarget Allocation \n \nLong-Term Expected Real Rate of Return* \n \nDomestic Equities \n \n49% \n \nInternational Equities \n \n5% \n \nFixed Income \n \n41% \n \nCash \n \n5% \n \n7.90% 10.40% 5.50% 2.40% \n \n*Rates shown are net of the 2.50% assumed rate of inflation. \n \n- 41 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \n \nDiscount Rate: The discount rate used to measure the total pension liability was the single equivalent discount rate shown above. The projection of cash flows used to determine the discount rate assumed that employer contributions will be made at rates equal to actuarially determined contribution rate. Based on this assumption, the Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current Plan members through 2055 and the long-term expected rate of return of 7.00% was applied to this period. The December 31, 2022 20-year tax-free municipal bond yield of 3.72% was applied after 2055. \n \nSensitivity of the Polk County School District's Net Pension Liability to Changes in the Discount Rate: The following represents the net pension liability calculated using the stated discount rate, as well as what the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point higher than the current rate: \n \nSchool District's proportionate share \n \nof the net pension liability \n \n$ \n \n1% Decrease (4.42%) \n6,359,787.00 $ \n \nCurrent Rate (5.42%) \n5,125,275.00 $ \n \n1% Increase (6.42%) \n4,091,669.00 \n \nNOTE 14: TAX ABATEMENTS \nThe Development Authority of Polk County, the Cedartown Development Authority and the Rockmart Development Authority can enter into agreements with private individuals or entities for economic or industrial projects to encourage the creation of jobs and capital investment through an \"Economic Incentive Program.\" This program is used to incentivize these businesses to build, relocate, expand, or renovate within incorporated and unincorporated Polk County. Each agreement provides a property tax benefit to the company through a schedule of discounted valuation that reduces, for ad valorem tax purposes, the fair market value of real and/or personal property that is held by the Authorities and leased to the company. Georgia case law and the Authorities' enabling legislation provides the Authorities with the power to enter into such agreements with private companies. \nThe Authorities may accept title to real and personal property assets from a company in return for job creation and capital investment and provide a tax benefit to the company through a lease agreement with the Authority. In considering eligibility for providing this benefit to a company, the Authorities review the following criteria: \n1. Eligible businesses can include new and existing industrial businesses. \n2. But for an incentive agreement, the company would not create the jobs and investment in the community. \n3. Eligible projects must involve significant investment in real and personal property. \n4. The average wage of the business' employees should be above the average wage of goods producing employees in Polk County. \n5. The business should offer medical benefits to all employees. \n6. The impact to job retention will be considered for each expansion project. \n7. As a condition of assistance, a business will be required to work with the Authority to convey title to the Authority. \n \n- 42 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2023 \n \nEXHIBIT \"I\" \n \nIn return for a property tax benefit, a company is required to commit to creating jobs and capital investment within a defined period as part of a performance and accountability agreement with the Authority that includes provisions for the company to pay back a prorated portion of the benefit if they fail to meet the performance criteria by a specified date. The Authorities monitor compliance with performance and accountability agreements to ensure the companies meet their commitments. \nFor the Polk County School District's year ending June 30, 2023, the cumulative property tax not collected due to incentive agreements was $38,178.79; however, $293,479.38 was paid to the Polk County School District through the Economic Incentive Program for the same period. These agreements will result in an estimated $37.0 million in new capital investment for Polk County and more than 84 new/retained jobs. According to the National Association of Manufacturers, the new capital investment will generate an additional $92.4 million in our economy, and the 84 jobs will generate another 286 jobs in other sectors. \nIncluded in the $38,178.79 abated, the following are tax abatement agreement amounts with individual companies that exceed 10.00 percent of the total amount abated: \n A property tax abatement was granted to Kimoto Tech in the amount of $7,046.40.  A property tax abatement was granted to Inman Solar in the amount of $13,301.18.  Property tax abatements were granted to Westbound Solar totaling $14,254.30. \n \n- 43 - \n \n (This page left intentionally blank) \n \n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY TEACHERS RETIREMENT SYSTEM OF GEORGIA \n \nSCHEDULE \"1\" \n \nFor the Year Ended \nJune 30 \n \nSchool District's proportion \nof the Net Pension Liability (NPL) \n \nSchool District's proportionate share \nof the NPL \n \nState of Georgia's proportionate share \nof the NPL associated with the \nSchool District \n \nTotal \n \nSchool District's covered payroll \n \nSchool District's proportionate share of the NPL as a percentage of its covered payroll \n \nPlan fiduciary net position as a percentage \nof the total pension liability \n \n2023 2022 2021 2020 2019 2018 2017 2016 2015 \n \n0.360550% $ 117,077,554.00 $ 0.339198% $ 29,999,801.00 $ 0.327642% $ 79,367,716.00 $ 0.322863% $ 69,424,275.00 $ 0.327378% $ 60,768,369.00 $ 0.332680% $ 61,829,603.00 $ 0.342487% $ 70,658,887.00 $ 0.345774% $ 52,640,658.00 $ 0.346443% $ 43,768,503.00 $ \n \n480,909.00 119,045.00 287,053.00 327,916.00 289,755.00 748,059.00 944,080.00 600,892.00 560,177.00 \n \n$ 117,558,463.00 $ 30,118,846.00 $ 79,654,769.00 $ 69,752,191.00 $ 61,058,124.00 $ 62,577,662.00 $ 71,602,967.00 $ 53,241,550.00 $ 44,328,680.00 \n \n$ 49,001,199.08 $ 44,357,338.07 $ 42,459,243.32 $ 39,589,606.96 $ 39,127,366.15 $ 38,673,234.64 $ 38,069,372.98 $ 36,915,144.69 $ 35,545,926.47 \n \n238.93% 67.63% \n186.93% 175.36% 155.31% 159.88% 185.61% 142.60% 123.13% \n \n72.85% 92.03% 77.01% 78.56% 80.27% 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- 45 - \n \n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \nSCHEDULE OF CONTRIBUTIONS TEACHERS RETIREMENT SYSTEM OF GEORGIA \n \nSCHEDULE \"2\" \n \nFor the Year Ended June 30 \n \nContractually required contribution \n \nContributions in relation to the contractually required \ncontribution \n \nContribution deficiency (excess) \n \nSchool District's covered payroll \n \n2023 2022 2021 2020 2019 2018 2017 2016 2015 \n \n$ \n \n10,222,814.47 $ \n \n$ \n \n9,667,779.93 $ \n \n$ \n \n8,421,137.11 $ \n \n$ \n \n8,941,170.49 $ \n \n$ \n \n8,235,903.09 $ \n \n$ \n \n6,546,048.34 $ \n \n$ \n \n5,456,446.48 $ \n \n$ \n \n5,360,865.43 $ \n \n$ \n \n4,797,913.58 $ \n \n10,222,814.47 $ 9,667,779.93 $ 8,421,137.11 $ 8,941,170.49 $ 8,235,903.09 $ 6,546,048.34 $ 5,456,446.48 $ 5,360,865.43 $ 4,797,913.58 $ \n \n- \n \n$ \n \n51,286,982.59 \n \n- \n \n$ \n \n49,001,199.08 \n \n- \n \n$ \n \n44,357,338.07 \n \n- \n \n$ \n \n42,459,243.32 \n \n- \n \n$ \n \n39,589,606.96 \n \n- \n \n$ \n \n39,127,366.15 \n \n- \n \n$ \n \n38,673,234.64 \n \n- \n \n$ \n \n38,069,372.98 \n \n- \n \n$ \n \n36,915,144.69 \n \nContribution as a percentage of covered payroll \n19.93% 19.73% 18.98% 21.06% 20.80% 16.73% 14.11% 14.08% 13.00% \n \nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \n \n- 46 - \n \n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \n \nSCHEDULE \"3\" \n \nFor the Year Ended June 30 \n2023 2022 2021 2020 2019 2018 2017 2016 2015 \n \nSchool District's proportion of the Net Pension Liability (NPL) \n \nSchool District's proportionate share of \nthe NPL \n \nSchool District's covered payroll \n \nSchool District's proportionate share of the NPL as a percentage \nof covered payroll \n \nPlan fiduciary net position as a \npercentage of total pension liability \n \n0.004832% $ 0.007345% $ 0.007707% $ 0.007150% $ 0.005132% $ 0.005232% $ 0.004803% $ 0.003427% $ 0.003393% $ \n \n322,703.00 $ 171,792.00 $ 324,847.00 $ 295,047.00 $ 210,978.00 $ 212,489.00 $ 227,202.00 $ 138,841.00 $ 127,258.00 $ \n \n121,294.71 176,070.11 206,943.46 180,218.56 130,926.01 128,331.00 111,677.30 \n78,360.00 76,400.48 \n \n266.05% 97.57% \n156.97% 163.72% 161.14% 165.58% 203.45% 177.18% 166.57% \n \n67.44% 87.62% 76.21% 76.74% 76.68% 76.33% 72.34% 76.20% 77.99% \n \nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \n \n- 47 - \n \n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \nSCHEDULE OF CONTRIBUTIONS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \n \nSCHEDULE \"4\" \n \nFor the Year Ended June 30 \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 payroll \n \n2023 \n \n$ \n \n2022 \n \n$ \n \n2021 \n \n$ \n \n2020 \n \n$ \n \n2019 \n \n$ \n \n2018 \n \n$ \n \n2017 \n \n$ \n \n2016 \n \n$ \n \n2015 \n \n$ \n \n2014 \n \n$ \n \n42,545.72 $ 29,874.93 $ 43,418.88 $ 51,023.36 $ 44,658.15 $ 32,475.72 $ 31,838.88 $ 27,606.43 $ 17,207.88 $ 14,104.00 $ \n \n42,545.72 $ 29,874.93 $ 43,418.88 $ 51,023.36 $ 44,658.15 $ 32,475.72 $ 31,838.88 $ 27,606.43 $ 17,207.88 $ 14,104.00 $ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n137,200.08 121,294.71 176,070.11 206,943.46 180,218.56 130,926.01 128,331.00 111,677.30 \n78,360.00 76,400.48 \n \n31.01% 24.63% 24.66% 24.66% 24.78% 24.81% 24.81% 24.72% 21.96% 18.46% \n \n- 48 - \n \n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA \n \nSCHEDULE \"5\" \n \nFor the Year Ended June \n30 \n \nSchool District's proportion of \nthe Net Pension Liability (NPL) \n \nSchool District's proportionate share of the NPL \n \nState of Georgia's proportionate share \nof the NPL associated with the \nSchool District \n \nTotal \n \nSchool District's covered payroll \n \nSchool District's proportionate share of the NPL as a percentage of its covered payroll \n \nPlan fiduciary net position as a \npercentage of the total pension \nliability \n \n2023 2022 2021 2020 2019 2018 2017 2016 2015 \n \n0.00% $ 0.00% $ 0.00% $ 0.00% $ 0.00% $ 0.00% $ 0.00% $ 0.00% $ 0.00% $ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n865,123.00 $ 865,123.00 $ 1,610,002.90 81,342.00 $ 81,342.00 $ 1,629,035.10 \n563,934.00 $ 563,934.00 $ 1,569,655.68 553,552.00 $ 553,552.00 $ 1,712,200.77 565,141.00 $ 565,141.00 $ 1,883,260.87 551,379.00 $ 551,379.00 $ 1,810,170.59 762,372.00 $ 762,372.00 $ 1,791,780.27 485,473.00 $ 485,473.00 $ 1,790,955.74 443,309.00 $ 443,309.00 $ 1,692,625.17 \n \nN/A \n \n81.21% \n \nN/A \n \n98.00% \n \nN/A \n \n84.45% \n \nN/A \n \n85.02% \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 \nN/A \n \n88.29% \n \nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \n \n- 49 - \n \n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET OPEB LIABILITY \nSCHOOL OPEB FUND \n \nSCHEDULE \"6\" \n \nFor the Year Ended \nJune 30 \n \nSchool District's proportion of the Net OPEB Liability (NOL) \n \nSchool District's proportionate share \nof the NOL \n \nState of Georgia's proportionate \nshare of the NOL associated with the School District \n \nTotal \n \nSchool District's covered-employee \npayroll \n \nSchool District's proportionate share of the NOL as a percentage of its coveredemployee payroll \n \nPlan fiduciary net position \nas a percentage of the total OPEB liability \n \n2023 2022 2021 2020 2019 2018 \n \n0.427251% $ 42,311,444.00 $ 0.405694% $ 43,940,016.00 $ 0.395104% $ 58,031,576.00 $ 0.391779% $ 48,079,689.00 $ 0.396941% $ 50,449,983.00 $ 0.402911% $ 56,608,834.00 $ \n \n- \n \n$ 42,311,444.00 $ 40,901,821.91 \n \n- \n \n$ 43,940,016.00 $ 37,827,087.46 \n \n- \n \n$ 58,031,576.00 $ 36,339,858.85 \n \n- \n \n$ 48,079,689.00 $ 32,761,391.83 \n \n- \n \n$ 50,449,983.00 $ 32,469,171.98 \n \n- \n \n$ 56,608,834.00 $ 31,880,339.52 \n \n103.45% 116.16% 159.69% 146.76% 155.38% 177.57% \n \n6.17% 6.14% 3.99% 4.63% 2.93% 1.61% \n \nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \n \n- 50 - \n \n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \nSCHEDULE OF CONTRIBUTIONS SCHOOL OPEB FUND \n \nSCHEDULE \"7\" \n \nFor the Year Ended June 30 \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 \ncovered-employee payroll \n \n2023 \n \n$ \n \n2022 \n \n$ \n \n2021 \n \n$ \n \n2020 \n \n$ \n \n2019 \n \n$ \n \n2018 \n \n$ \n \n2017 \n \n$ \n \n1,737,597.00 $ 1,544,832.00 $ 1,509,114.00 $ 1,336,150.00 $ 2,110,001.00 $ 2,057,312.00 $ 2,100,811.00 $ \n \n1,737,597.00 $ 1,544,832.00 $ 1,509,114.00 $ 1,336,150.00 $ 2,110,001.00 $ 2,057,312.00 $ 2,100,811.00 $ \n \n- \n \n$ \n \n44,966,753.26 \n \n- \n \n$ \n \n40,901,821.91 \n \n- \n \n$ \n \n37,827,087.46 \n \n- \n \n$ \n \n36,339,858.85 \n \n- \n \n$ \n \n32,761,391.83 \n \n- \n \n$ \n \n32,469,171.98 \n \n- \n \n$ \n \n31,880,339.52 \n \n3.86% 3.78% 3.99% 3.68% 6.44% 6.34% 6.59% \n \nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \n \n- 51 - \n \n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN THE NET POSITION LIABILITY AND RELATED RATIOS \nSOCIAL SECURITY REPLACEMENT PLAN YEAR ENDING DECEMBER 31 \n \nSCHEDULE \"8\" \n \nTotal Pension Liability Service Cost Interest Differences Between Expected and Actual Experience Change of Assumptions Benefit Payments \nNet Change in Total Pension Liability \nTotal Pension Liability - beginning \nTotal Pension Liability - ending (a) \nPlan Fiduciary Net Position Contributions - Employer Net Investment Income Benefit Payments Administrative Expenses Due to Broker \nNet change in Plan Fiduciary Net Position \nPlan Fiduciary Net Position - beginning \nPlan Fiduciary Net Position - ending (b) \nNet Pension Liability - ending (a - b) \nPlan Fiduciary Net Position as a percentage of the Total Pension Liability \nCovered-Employee Payroll \n \n2023 \n \n2022 \n \n2021 \n \n2020 \n \n2019 \n \n$ \n \n218,057.00 $ \n \n215,007.00 $ \n \n196,414.00 $ \n \n200,141.00 $ \n \n205,015.00 \n \n493,630.00 \n \n436,433.00 \n \n436,782.00 \n \n429,921.00 \n \n424,569.00 \n \n335,104.00 \n \n231,688.00 \n \n74,724.00 \n \n(21,491.00) \n \n(128,097.00) \n \n67,243.00 \n \n(510,867.00) \n \n474,227.00 \n \n177,923.00 \n \n(149,027.00) \n \n(402,301.00) \n \n(392,159.00) \n \n(375,690.00) \n \n(358,105.00) \n \n(333,310.00) \n \n711,733.00 \n \n(19,898.00) \n \n806,457.00 \n \n428,389.00 \n \n19,150.00 \n \n9,030,108.00 \n \n9,050,006.00 \n \n8,243,549.00 \n \n7,815,160.00 \n \n7,796,010.00 \n \n$ 9,741,841.00 $ 9,030,108.00 $ 9,050,006.00 $ 8,243,549.00 $ 7,815,160.00 \n \n$ \n \n375,595.00 $ \n \n337,570.00 $ \n \n336,514.00 $ \n \n335,053.00 $ \n \n332,646.00 \n \n(822,171.00) \n \n618,247.00 \n \n503,539.00 \n \n684,749.00 \n \n(271,717.00) \n \n(402,301.00) \n \n(392,159.00) \n \n(375,690.00) \n \n(358,105.00) \n \n(333,310.00) \n \n(18,711.00) \n \n(25,369.00) \n \n(9,949.00) \n \n(22,682.00) \n \n(21,147.00) \n \n- \n \n- \n \n- \n \n- \n \n- \n \n(867,588.00) \n \n538,289.00 \n \n454,414.00 \n \n639,015.00 \n \n(293,528.00) \n \n5,484,154.00 \n \n4,945,865.00 \n \n4,491,451.00 \n \n3,852,436.00 \n \n4,145,964.00 \n \n$ 4,616,566.00 $ 5,484,154.00 $ 4,945,865.00 $ 4,491,451.00 $ 3,852,436.00 \n \n$ 5,125,275.00 $ 3,545,954.00 $ 4,104,141.00 $ 3,752,098.00 $ 3,962,724.00 \n \n47.39% \n \n60.73% \n \n54.65% \n \n54.48% \n \n49.29% \n \n$ 2,439,700.00 $ 2,060,390.00 $ 2,110,591.00 $ 2,290,640.00 $ 2,347,678.00 \n \nNet Pension Liability as percentage of Covered-Employee \n \n210.08% \n \n172.10% \n \n194.45% \n \n163.80% \n \n168.79% \n \n- 52 - \n \n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN THE NET POSITION LIABILITY AND RELATED RATIOS \nSOCIAL SECURITY REPLACEMENT PLAN YEAR ENDING DECEMBER 31 \n \nSCHEDULE \"8\" \n \nTotal Pension Liability Service Cost Interest Differences Between Expected and Actual Experience Change of Assumptions Benefit Payments \nNet Change in Total Pension Liability \nTotal Pension Liability - beginning \nTotal Pension Liability - ending (a) \nPlan Fiduciary Net Position Contributions - Employer Net Investment Income Benefit Payments Administrative Expenses Due to Broker \nNet change in Plan Fiduciary Net Position \nPlan Fiduciary Net Position - beginning \nPlan Fiduciary Net Position - ending (b) \nNet Pension Liability - ending (a - b) \nPlan Fiduciary Net Position as a percentage of the Total Pension Liability \nCovered-Employee Payroll \n \n2018 \n \n2017 \n \n2016 \n \n2015 \n \n2014 \n \n$ \n \n202,546.00 $ \n \n211,474.00 $ \n \n252,078.00 $ \n \n203,802.00 $ \n \n164,756.00 \n \n416,164.00 \n \n393,557.00 \n \n357,947.00 \n \n378,679.00 \n \n363,955.00 \n \n(63,999.00) \n \n70,820.00 \n \n62,585.00 \n \n(446,217.00) \n \n251,101.00 \n \n128,319.00 \n \n(153,139.00) \n \n(61,902.00) \n \n471,960.00 \n \n832,322.00 \n \n(332,304.00) \n \n(321,825.00) \n \n(294,805.00) \n \n(244,169.00) \n \n(221,185.00) \n \n350,726.00 \n \n200,887.00 \n \n315,903.00 \n \n364,055.00 \n \n1,390,949.00 \n \n7,445,284.00 \n \n7,244,397.00 \n \n6,928,494.00 \n \n6,564,439.00 \n \n5,173,490.00 \n \n$ 7,796,010.00 $ 7,445,284.00 $ 7,244,397.00 $ 6,928,494.00 $ 6,564,439.00 \n \n$ \n \n335,798.00 $ \n \n349,969.00 $ \n \n315,891.00 $ \n \n310,889.00 $ \n \n304,253.00 \n \n392,875.00 \n \n238,741.00 \n \n(20,197.00) \n \n147,675.00 \n \n473,233.00 \n \n(332,304.00) \n \n(321,825.00) \n \n(294,805.00) \n \n(244,169.00) \n \n(221,185.00) \n \n(24,030.00) \n \n(21,220.00) \n \n(29,660.00) \n \n(25,205.00) \n \n(23,094.00) \n \n- \n \n(1,113.00) \n \n(1,229.00) \n \n(4,493.00) \n \n(242.00) \n \n372,339.00 \n \n244,552.00 \n \n(30,000.00) \n \n184,697.00 \n \n532,965.00 \n \n3,773,625.00 \n \n3,529,073.00 \n \n3,559,073.00 \n \n3,374,376.00 \n \n2,841,411.00 \n \n$ 4,145,964.00 $ 3,773,625.00 $ 3,529,073.00 $ 3,559,073.00 $ 3,374,376.00 \n \n$ 3,650,046.00 $ 3,671,659.00 $ 3,715,324.00 $ 3,369,421.00 $ 3,190,063.00 \n \n53.18% \n \n50.68% \n \n48.71% \n \n51.37% \n \n51.40% \n \n$ 2,416,621.00 $ 2,377,259.00 $ 2,600,407.00 $ 2,562,945.00 $ 2,726,676.00 \n \nNet Pension Liability as percentage of Covered-Employee \n \n151.04% \n \n154.45% \n \n142.87% \n \n131.47% \n \n117.00% \n \n- 53 - \n \n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \nSCHEDULE OF CONTRIBUTIONS SOCIAL SECURITY REPLACEMENT PLAN \nFOR THE YEAR END DECEMBER 31 \n \nSCHEDULE \"9\" \n \nFor the Year \n2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 \n \nActual determined contribution \n \nContributions in relation to the contractually required contribution \n \nContribution deficiency (excess) \n \nSchool District's covered payroll \n \n$ \n \n375,595.00 $ \n \n$ \n \n337,570.00 $ \n \n$ \n \n336,514.00 $ \n \n$ \n \n335,053.00 $ \n \n$ \n \n332,646.00 $ \n \n$ \n \n335,798.00 $ \n \n$ \n \n328,611.00 $ \n \n$ \n \n315,891.00 $ \n \n$ \n \n310,889.00 $ \n \n$ \n \n304,253.00 $ \n \n375,595.00 $ 337,570.00 $ 336,514.00 $ 335,053.00 $ 332,646.00 $ 335,798.00 $ 349,969.00 $ 315,891.00 $ 310,889.00 $ 304,253.00 $ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n(21,358.00) $ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n2,439,700.00 2,060,390.00 2,110,591.00 2,290,640.00 2,347,678.00 2,416,621.00 2,377,259.00 2,600,407.00 2,562,945.00 2,726,676.00 \n \nContribution as a percentage of covered payroll \n15.40% 16.38% 15.94% 14.63% 14.17% 13.90% 14.72% 12.15% 12.13% 11.16% \n \n- 54 - \n \n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \nSCHEDULE OF INVESTMENT RETURNS SOCIAL SECURITY REPLACEMENT PLAN \nFOR THE YEAR END DECEMBER 31 \n \nYear Ended \n2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 \n \nAnnual Money - Weighted Rate of Return, Net of Investment Expense \n(15.45)% 13.09% 11.52% 18.47% (6.73)% 10.88% 7.04% (0.59)% 4.55% 17.25% \n \nSCHEDULE \"10\" \n \n- 55 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION \nFOR THE YEAR ENDED JUNE 30, 2023 \n \nSCHEDULE \"11\" \n \nTeachers Retirement System Change of benefit terms: There have been no changes in benefit terms. \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 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). \nOn May 15, 2019, the Board adopted recommended changes from the smoothed valuation interest rate methodology that has been in effect since June 30, 2009, to a constant interest rate method. In conjunction with the methodology, the long-term assumed rate of return in assets (discount rate) has been changed from 7.50% to 7.25%, and the assumed annual rate of inflation has been reduced from 2.75% to 2.50%. \nIn 2019 and later, the expectation of retired life mortality was changed to the Pub-2010 Teacher Headcount Weighted Below Median Healthy Retiree mortality table from the RP-2000 Mortality Tables. In 2019, rates of withdrawal, retirement, disability and mortality were adjusted to more closely reflect actual experience. \nOn May 11, 2022, the Board adopted recommended changes to the long-term assumed rate of return and payroll growth assumption utilized by the System. The long-term assumed rate of return was changed from 7.25% to 6.90%, and the payroll growth assumption was changed from 3.00% to 2.50%. \nEmployees' Retirement System Changes of benefit terms: There have been no changes in benefit terms. \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. The expectation of retired life mortality was changed to the RP-2000 Combined Mortality Table projected to 2025 with projection scale BB (set forwarded 2 years for both males and females). \nA new funding policy was initially adopted the Board on March 15, 2018, and most recently amended on June 18, 2020. 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 and further reduced from 7.40% to 7.30% for the June 30, 2018 actuarial valuation. \nOn December 17, 2020, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System based on the experience study prepared for the five-year period ending June 30, 2019. Primary among the changes were the updates to rate of mortality, retirement, withdrawal, and salary increases. This also included a change to the long-term assumed investment rate of return of 7.00%. These assumption changes are reflected in the calculation of the June 30, 2021 Total Pension Liability. \nOn April 21, 2022, the Board adopted a new funding policy which, in part, provides that the Actuarial Accrued Liability and Normal Cost of the System will include a prefunded variable Cost-of-Living Adjustment (COLA) for eligible retirees and beneficiaries of the System. Under the new policy, future COLAs are provided through a profit-sharing mechanism using the System's asset performance. After studying the parameters of this new policy, the assumption for future COLAs was set at 1.05%. Previously, no future COLAs were assumed. In addition, the funding policy set the assumed rate of return at 7.20% for the June 30, 2021 valuation and established a new Transitional Unfunded Actuarial Accrued Liability as of June 30, 2021 which will be amortized over a closed 20-year period. \nPublic School Employees Retirement System Changes of benefit terms: There have been no changes in benefit terms. \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 and withdrawal. The expectation of retired life mortality was changed to 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). \nA new funding policy was initially adopted by the Board on March 15, 2018, and most recently amended on December 17, 2020. 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 and further reduced from 7.40% to 7.30% for the June 30, 2018 actuarial valuation. \nOn December 17, 2020, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System based on the experience study prepared for the five-year period ending June 30, 2019. Primary among the changes were the updates to rates or mortality, retirement, disability, and withdrawal. This also included a change to the long-term assumed investment rate of return to 7.00%. These assumption changes are reflected in the calculation of the June 30, 2021 Total Pension Liability. \n \n- 56 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION \nFOR THE YEAR ENDED JUNE 30, 2023 \n \nSCHEDULE \"11\" \n \nSchool OPEB Fund Changes of benefit terms: There have been no changes in benefit terms. \nChanges in assumptions: June 30, 2020 valuation: Decremental assumptions were changed to reflect the Employees' Retirement System's experience study. Approximately 0.10% of employees are members of the Employees' Retirement System. \nJune 30, 2019 valuation: Decremental assumptions were changed to reflect the Teachers Retirement System's experience study. \nJune 30, 2018 valuation: The inflation assumption was lowered from 2.75% to 2.50%. \nJune 30, 2017 valuation: The participation assumption, tobacco use assumption and morbidity factors were revised. \nJune 30, 2015 valuation: Decremental and underlying inflation assumptions were changed to reflect the Retirement Systems' experience studies. \nJune 30, 2012 valuation: A data audit was performed and data collection procedures and assumptions were changed. \nThe discount rate was updated from 3.07% as of June 30, 2016 to 3.58% as of June 30, 2017, to 3.87% as of June 30, 2018, back to 3.58% as of June 30, 2019, and to 2.22% as of June 30, 2020. \n \nSocial Security Replacement Plan Changes of benefit terms: There have been no changes in benefit terms that affected the measurement of the total pension liability since the prior measurement date. However, in 2022 the amounts reported as changes in assumptions resulted from a decrease in the discount rate from 5.48% to 5.42% since the prior measurement date. \nMethod and assumptions used in calculations of actuarially determined contributions: The actuarially determined contribution rates in the schedule of contributions are calculated as of January 1, 2023. The following actuarial methods and assumptions were used to determine the contractually required contributions for year ended June 30, 2023 reported in that schedule: \n \nValuation date Actuarial cost method Amortization method Remaining amortization Asset valuation Method \nInflation rate Salary increases Investment rate of return \n \nJanuary 1, 2022 Entry Age Level percentage of payroll 16 years Method recognized a portion of the difference between the market value of assets and expected actuarial value of assets, based on the assumed interest rate of return. The amount recognized each year is 20% of the difference between market value and expected actuarial value. 2.50% 3.00% per annum 7.00%, net of pension plan investment \n \n- 57 - \n \n POLK COUNTY SCHOOL DISTRICT GENERAL FUND \nSCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL \nYEAR ENDED JUNE 30, 2023 \n \nSCHEDULE \"12\" \n \nREVENUES Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous Total Revenues \nEXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Enterprise Operation Food Services Operation Capital Outlay Debt Service Principal Interest Total Expenditures \nExcess of Revenues over (under) Expenditures \nOTHER FINANCING SOURCES (USES) Other Sources Other Uses Total Other Financing Sources (Uses) \nNet Change in Fund Balances \nFund Balances - Beginning \nFund Balances - Ending \n \nNONAPPROPRIATED BUDGETS \n \nORIGINAL (1) \n \nFINAL (1) \n \nACTUAL AMOUNTS \n \nVARIANCE OVER/UNDER \n \n$ \n \n16,135,000.00 $ \n \n16,135,000.00 $ \n \n17,823,904.92 $ \n \n200,000.00 \n \n200,000.00 \n \n326,348.90 \n \n55,357,380.00 \n \n56,266,711.30 \n \n58,978,606.31 \n \n23,608,438.62 \n \n29,210,042.60 \n \n25,555,018.40 \n \n17,424.80 \n \n2,853,910.80 \n \n2,906,596.31 \n \n3,032.19 \n \n4,867.19 \n \n5,072.43 \n \n701,727.81 \n \n701,827.81 \n \n1,466,184.30 \n \n96,023,003.42 \n \n105,372,359.70 \n \n107,061,731.57 \n \n1,688,904.92 126,348.90 \n2,711,895.01 (3,655,024.20) \n52,685.51 205.24 \n764,356.49 1,689,371.87 \n \n65,485,610.08 \n3,885,963.82 3,534,929.14 1,175,473.82 \n759,255.84 5,132,345.81 1,399,386.14 11,419,068.58 4,484,373.35 \n402,068.99 43,197.00 \n5,551,632.03 - \n1,482,170.61 \n104,755,475.21 (8,732,471.79) \n \n71,692,766.21 \n7,171,679.48 3,348,448.02 1,335,026.38 1,003,070.72 5,503,960.85 1,328,202.72 12,148,387.97 5,857,086.33 \n475,834.62 86,155.17 \n5,516,105.26 2,025.00 \n2,347,270.61 \n117,816,019.34 (12,443,659.64) \n \n67,827,331.29 \n6,254,746.08 2,982,489.22 1,339,322.12 1,310,694.02 5,500,017.61 1,328,274.92 11,152,262.73 5,547,290.27 \n463,706.27 138,637.71 163,758.77 6,751,925.52 2,148,163.01 \n171,392.13 6,407.87 \n113,086,419.54 (6,024,687.97) \n \n3,865,434.92 \n916,933.40 365,958.80 \n(4,295.74) (307,623.30) \n3,943.24 (72.20) \n996,125.24 309,796.06 \n12,128.35 (52,482.54) 5,352,346.49 (6,749,900.52) 199,107.60 \n(171,392.13) (6,407.87) \n4,729,599.80 6,418,971.67 \n \n- \n \n545,408.00 \n \n- \n \n(350,000.00) \n \n(921,003.00) \n \n- \n \n(350,000.00) \n \n(375,595.00) \n \n- \n \n(9,082,471.79) \n \n(12,819,254.64) \n \n(6,024,687.97) \n \n29,943,462.69 \n \n29,943,462.69 \n \n29,867,591.48 \n \n$ \n \n20,860,990.90 $ \n \n17,124,208.05 $ \n \n23,842,903.51 $ \n \n(545,408.00) 921,003.00 375,595.00 \n6,794,566.67 \n(75,871.21) \n6,718,695.46 \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 $2,878,441.71 and $2,744,433.20, 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- 58 - \n \n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \nYEAR ENDED JUNE 30, 2023 \n \nSCHEDULE \"13\" \n \nFUNDING AGENCY PROGRAM/GRANT Agriculture, U. S. Department of \nChild Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program COVID-19 - National School Lunch Program Total Child Nutrition Cluster \nOther Programs Pass-Through From Georgia Department of Education Food Services State Administrative Expenses for Child Nutrition Total U. S. Department of Agriculture \nEducation, U. S. Department of Education Stabilization Fund Pass-Through From Georgia Department of Education COVID-19 - Elementary and Secondary School Emergency Relief Fund COVID-19 - American Rescue Plan Elementary and Secondary School Emergency Relief Fund COVID-19 - American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Homeless Children and Youth Total Education Stabilization Fund \nSpecial Education Cluster Pass-Through From Georgia Department of Education Special Education Grants to States Grants to States COVID-19 - American Rescue Plan - Grants to States Preschool Grants Preschool Grants COVID-19 - American Rescue Plan - Preschool Total 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 Rural and Low-Income School Program Rural and Low-Income School Program 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 Total Other Programs Total U. S. Department of Education \n \nASSISTANCE LISTING NUMBER \n \nPASSTHROUGH \nENTITY ID \nNUMBER \n \nEXPENDITURES IN PERIOD \n \n10.553 10.555 10.555 \n \n235GA324N1199 $ 235GA324N1199 225GA324N1099 \n \n1,637,954.76 4,093,782.95 \n225,798.22 5,957,535.93 \n \n10.560 \n \n235GA904N2533 \n \n1,027.76 5,958,563.69 \n \n84.425D 84.425U 84.425W \n \nS425D210012 S425U210012 S425W210011 \n \n4,126,476.98 \n9,177,139.83 \n229,240.39 13,532,857.20 \n \n84.027A 84.027A 84.027X 84.173A 84.173A 84.173X \n \nH027A210073 H027A220073 H027X210073 H173A210081 H173A220081 H173X210081 \n \n84.048A 84.365A 84.358B 84.358B 84.424A 84.424A 84.367A 84.367A 84.010A 84.010A \n \nV048A210010 S365A210010 S358B210010 S358F220010 S424A210011 S424A220011 S367A210001 S367A220001 S010A210010-21A S010A220010 \n \n559,457.00 951,691.53 197,229.41 \n41,501.00 53,473.06 13,412.00 1,816,764.00 \n108,662.85 27,283.50 9,202.00 \n178,125.63 62,180.00 \n175,545.67 341,218.00 201,974.47 293,955.00 2,666,999.03 4,065,146.15 19,414,767.35 \n \n- 59 - \n \n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \nYEAR ENDED JUNE 30, 2023 \n \nSCHEDULE \"13\" \n \nFUNDING AGENCY PROGRAM/GRANT \nHealth and Human Services, U. S. Department of Pass-Through From Bright From the Start Georgia Department of Early Care and Learning COVID-19 - Child Care and Development Block Grant \nTotal Expenditures of Federal Awards \n \nASSISTANCE LISTING NUMBER \n \nPASSTHROUGH \nENTITY ID \nNUMBER \n \nEXPENDITURES IN PERIOD \n \n93.575 \n \n2210GACCC5 $ \n \n75,000.00 25,448,331.04 \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 Polk County School District (the \"Board\") under programs of the federal government for the year ended June 30, 2023. 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. \nNote 3. Indirect Cost Rate \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- 60 - \n \n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2023 \n \nSCHEDULE \"14\" \n \nGOVERNMENTAL FUND TYPES \n \nAGENCY/FUNDING GRANTS \n \nGENERAL FUND \n \nCAPITAL PROJECTS FUND \n \nBright From the Start: \n \nGeorgia Department of Early Care and Learning \n \nPre-Kindergarten Program \n \n$ \n \n1,499,625.65 $ \n \n- $ \n \nEducation, Georgia Department of \n \nQuality Basic Education \n \nDirect Instructional Cost \n \nKindergarten Program \n \n2,880,608.00 \n \n- \n \nKindergarten Program - Early Intervention Program \n \n322,625.00 \n \n- \n \nPrimary Grades (1-3) Program \n \n6,629,985.00 \n \n- \n \nPrimary Grades - Early Intervention (1-3) Program \n \n876,241.00 \n \n- \n \nUpper Elementary Grades (4-5) Program \n \n3,119,827.00 \n \n- \n \nUpper Elementary Grades - Early Intervention (4-5) Program \n \n453,802.00 \n \n- \n \nMiddle School (6-8) Program \n \n5,569,111.00 \n \n- \n \nHigh School General Education (9-12) Program \n \n5,067,605.00 \n \n- \n \nVocational Laboratory (9-12) Program \n \n2,095,836.00 \n \n- \n \nStudents with Disabilities \n \n7,933,718.00 \n \n- \n \nGifted Student - Category VI \n \n1,344,125.00 \n \n- \n \nRemedial Education Program \n \n671,730.00 \n \n- \n \nAlternative Education Program \n \n422,827.00 \n \n- \n \nEnglish Speakers of Other Languages (ESOL) \n \n1,404,271.00 \n \n- \n \nMedia Center Program \n \n1,000,993.00 \n \n- \n \n20 Days Additional Instruction \n \n310,687.00 \n \n- \n \nStaff and Professional Development \n \n180,271.00 \n \n- \n \nPrincipal Staff and Professional Development \n \n3,423.00 \n \n- \n \nIndirect Cost \n \nCentral Administration \n \n1,155,182.00 \n \n- \n \nSchool Administration \n \n2,046,918.00 \n \n- \n \nFacility Maintenance and Operations \n \n2,060,891.00 \n \n- \n \nOne Time QBE Adjustment \n \n1,904,323.00 \n \n- \n \nCategorical Grants \n \nPupil Transportation \n \nRegular \n \n820,108.00 \n \n- \n \nNursing Services \n \n174,389.00 \n \n- \n \nEducation Equalization Funding Grant \n \n6,939,729.00 \n \n- \n \nOther State Programs \n \nBus Purchases - State Allotment \n \n792,990.00 \n \n- \n \nFood Services \n \n240,654.00 \n \n- \n \nMath and Science Supplements \n \n19,110.65 \n \n- \n \nPreschool Disability Services \n \n197,024.00 \n \n- \n \nResidential Treatment Centers Grant \n \n427,054.00 \n \n- \n \nTeachers Retirement \n \n38,191.86 \n \n- \n \nVocational Education \n \n190,784.00 \n \n- \n \nVocational Supervisors \n \n28,667.00 \n \n- \n \nGeorgia State Financing and Investment Commission \n \nReimbursement on Construction Projects \n \n- \n \n752,232.46 \n \nOffice of the State Treasurer \n \nPublic School Employees Retirement \n \n102,797.00 \n \n- \n \nCONTRACT \n \nHuman Resources, Georgia Department of \n \nFamily Connections \n \n52,483.15 \n \n- \n \n$ \n \n58,978,606.31 $ \n \n752,232.46 $ \n \nTOTAL \n1,499,625.65 \n2,880,608.00 322,625.00 \n6,629,985.00 876,241.00 \n3,119,827.00 453,802.00 \n5,569,111.00 5,067,605.00 2,095,836.00 7,933,718.00 1,344,125.00 \n671,730.00 422,827.00 1,404,271.00 1,000,993.00 310,687.00 180,271.00 \n3,423.00 \n1,155,182.00 2,046,918.00 2,060,891.00 1,904,323.00 \n820,108.00 174,389.00 6,939,729.00 \n792,990.00 240,654.00 \n19,110.65 197,024.00 427,054.00 \n38,191.86 190,784.00 \n28,667.00 \n752,232.46 \n102,797.00 \n52,483.15 \n59,730,838.77 \n \nSee notes to the basic financial statements. \n \n- 61 - \n \n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \nYEAR ENDED JUNE 30, 2023 \n \nSCHEDULE \"15\" \n \nPROJECT SPLOST V Construction, remodeling, improving, and equipping of existing facilities including Cedartown High School, Rockmart High School, Westside Elementary School and Eastside Elementary School. \nSPLOST VI For the purposes acquiring, constructing, and equipping the following capital projects: \nElementary school classroom additions and related facilities, roofing and air conditioning HVAC improvements, track resurfacing at Rockmart and Cedartown High Schools, gym renovations at Rockmart High School, parking lots and access roads, equipment and furnishings, technology devices, and physical education and athletic equipment; \nSystem-wide instructional and administrative technology/infrastructure; \nCedartown High School Fine Arts building with the expansion of and improvements to band and drama facilities, college and career facilities, and expansions to administrative offices; \nRockmart High agriculture barn/learning center and college and career facilities; \nSystem-wide safety and security systems and equipment; \nPress box at Rockmart High School; \nConcession Stand-Rockmart High School/Rockmart Middle; \nPurchasing school buses; \nRockmart Middle School field house; \nPurchasing vocational, fine arts and cafeteria equipment; \nPurchasing textbooks; \nAcquiring real and personal property necessary or to be used for the foregoing purposes; \nAll other general purposes related to these capital outlay projects; and \n2017 bond issuance costs. \nTotal SPLOST VI \nSPLOST VII Constructing, remodeling, improving, and equipping of existing facilities, including a fine arts building and new turf for athletic fields at Rockmart High School, an auxiliary gym and new turf for athletic fields at Cedartown High School, and system-wide roofing, HVAC, bathrooms, and classroom upgrades and improvements; instructional and administrative technology; system-wide safety and security systems and equipment; purchasing school buses, transportation, and maintenance vehicles and equipment; purchasing vocational, fine arts, cafeteria, physical education, and athletic equipment; purchasing textbooks and e-books; and acquiring real and personal property necessary or to be used for the foregoing purposes and all other general purposes related to these capital outlay projects and for expansion of facilities. \nTotal \n \nORIGINAL ESTIMATED \nCOST (1) \n \nCURRENT ESTIMATED COSTS (2) \n \nESTIMATED COMPLETION \nDATE \n \n$ \n \n300,000.00 $ \n \n6,550,850.61 \n \n6/30/2024 \n \n11,644,647.02 1,750,000.00 \n6,850,682.01 \n1,276,159.00 284,750.00 480,000.00 274,002.00 889,000.00 - \n301,142.00 925,008.00 324,609.97 25,000,000.00 \n \n6,862,279.43 985,698.38 \n8,987,577.43 \n1,297,842.65 356,548.03 444,547.00 33,741.36 760,661.00 198,749.99 - \n368,746.78 6,133,334.90 \n329,984.97 26,759,711.92 \n \n6/30/2026 6/30/2026 \nComplete Complete 6/30/2024 Complete Complete 6/30/2024 Complete \nComplete 6/30/2024 6/30/2026 \n \n25,000,000.00 \n \n25,743,193.14 \n \n$ \n \n50,300,000.00 $ \n \n59,053,755.67 \n \n6/30/2031 \n \n- 62 - \n \n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \nYEAR ENDED JUNE 30, 2023 \n \nSCHEDULE \"15\" \n \nPROJECT SPLOST V Construction, remodeling, improving, and equipping of existing facilities including Cedartown High School, Rockmart High School, Westside Elementary School and Eastside Elementary School. \nSPLOST VI For the purposes acquiring, constructing, and equipping the following capital projects: \nElementary school classroom additions and related facilities, roofing and air conditioning HVAC improvements, track resurfacing at Rockmart and Cedartown High Schools, gym renovations at Rockmart High School, parking lots and access roads, equipment and furnishings, technology devices, and physical education and athletic equipment; \nSystem-wide instructional and administrative technology/infrastructure; \nCedartown High School Fine Arts building with the expansion of and improvements to band and drama facilities, college and career facilities, and expansions to administrative offices; \nRockmart High agriculture barn/learning center and college and career facilities; \nSystem-wide safety and security systems and equipment; \nPress box at Rockmart High School; \nConcession Stand-Rockmart High School/Rockmart Middle; \nPurchasing school buses; \nRockmart Middle School field house; \nPurchasing vocational, fine arts and cafeteria equipment; \nPurchasing textbooks; \nAcquiring real and personal property necessary or to be used for the foregoing purposes; \nAll other general purposes related to these capital outlay projects; and \n \nAMOUNT EXPENDED IN CURRENT YEAR (3) (4) \n \nAMOUNT EXPENDED IN PRIOR YEARS (3) (4) \n \nTOTAL COMPLETION \nCOST \n \nEXCESS PROCEEDS NOT \nEXPENDED \n \n$ \n \n738,244.22 $ \n \n5,812,606.39 $ \n \n- $ \n \n- \n \n976,187.34 \n \n5,431,103.82 \n \n- \n \n- \n \n- \n \n985,698.38 \n \n- \n \n- \n \n- \n \n8,987,577.43 \n \n8,987,577.43 \n \n- \n \n- \n \n1,297,842.65 \n \n1,297,842.65 \n \n- \n \n35,758.55 \n \n320,789.48 \n \n- \n \n- \n \n- \n \n444,547.00 \n \n444,547.00 \n \n- \n \n- \n \n33,741.36 \n \n33,741.36 \n \n- \n \n- \n \n711,200.00 \n \n- \n \n- \n \n- \n \n198,749.99 \n \n198,749.99 \n \n- \n \n- \n \n- \n \n- \n \n- \n \n- \n \n- \n \n- \n \n- \n \n- \n \n368,746.78 \n \n368,746.78 \n \n- \n \n3,061,477.74 \n \n1,396,239.42 \n \n- \n \n- \n \n2017 bond issuance costs. \n \n1,075.00 \n \n328,909.97 \n \n- \n \n- \n \nTotal SPLOST VI \n \n4,074,498.63 \n \n20,505,146.28 \n \n11,331,205.21 \n \n- \n \nSPLOST VII \n \nConstructing, remodeling, improving, and equipping of existing facilities, \n \nincluding a fine arts building and new turf for athletic fields at Rockmart \n \nHigh School, an auxiliary gym and new turf for athletic fields at Cedartown \n \nHigh School, and system-wide roofing, HVAC, bathrooms, and classroom \n \nupgrades and improvements; instructional and administrative technology; \n \nsystem-wide safety and security systems and equipment; purchasing \n \nschool buses, transportation, and maintenance vehicles and equipment; \n \npurchasing vocational, fine arts, cafeteria, physical education, and athletic \n \nequipment; purchasing textbooks and e-books; and acquiring real and \n \npersonal property necessary or to be used for the foregoing purposes and \n \nall other general purposes related to these capital outlay projects and for \n \nexpansion of facilities. \n \n3,466,100.98 \n \n1,283,544.79 \n \n- \n \n- \n \nTotal \n \n$ \n \n8,278,843.83 $ 27,601,297.46 $ 11,331,205.21 $ \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. (2) The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion. (3) The voters of Polk County approved the imposition of a 1% sales tax to fund the above projects and retire associated debt. \nAmounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the projects. (4) In addition to the expenditures shown above, the School District has incurred interest to provide advance funding as follows: \n \nPrior Years Current Year \n \n$ \n \n5,866,695.00 \n \n1,703,194.44 \n \nTotal \n \n$ \n \n7,569,889.44 \n \nSee notes to the basic financial statements. \n \n- 63 - \n \n Section II Compliance and Internal Control Reports \n \n Greg S. Griffin State Auditor \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 \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 Dr. Katherine Thomas, Superintendent and Members of the Polk County School District \nWe have audited the financial statements of the governmental activities, each major fund, and fiduciary activities of the Polk County School District (School District) as of and for the year ended June 30, 2023, 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 July 8, 2024. We conducted our audit in accordance with the auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. \nReport on Internal 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) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the basic 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 a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the School District'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 or significant deficiencies may exist that were not identified. \n270 Washington Street, SW, Suite 4-101 Atlanta, Georgia 30334 | Phone (404) 656-2180 \n \n Report on 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 financial statements. 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 \nJuly 8, 2024 \n \n Greg S. Griffin State Auditor \nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE \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 Dr. Katherine Thomas, Superintendent and Members of the Polk County School District \nReport on Compliance for Each Major Federal Program \nOpinion on Each Major Federal Program \nWe have audited the Polk County School District's (School District) compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the School District's major federal programs for the year ended June 30, 2023. 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. \nIn our opinion, the School District 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, 2023. \nBasis for Opinion on Each Major Federal Program \nWe conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); 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). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor's Responsibilities for the Audit of Compliance section of our report. \nWe are required to be independent of the School District and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the School District's compliance with the compliance requirements referred to above. \n270 Washington Street, SW, Suite 4-101 Atlanta, Georgia 30334 | Phone (404) 656-2180 \n \n Responsibilities of Management for Compliance \nManagement is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules and provisions of contracts or grant agreements applicable to the School District's federal programs. \nAuditor's Responsibilities for the Audit of Compliance \nOur objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the School District's compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material, if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the School District's compliance with the requirements of each major federal program as a whole. \nIn performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance, we: \n Exercise professional judgment and maintain professional skepticism throughout the audit. \n Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the School District's compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. \n Obtain an understanding of the School District's internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances 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 the School District's internal control over compliance. Accordingly, no such opinion is expressed. \nWe are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit. \nReport on 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 a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance \n \n 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 Auditor's Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified. \nOur audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed. \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 \nJuly 8, 2024 \n \n Section III Auditee's Response to Prior Year Findings and Questioned Costs \n \n POLK COUNTY SCHOOL DISTRICT AUDITEE'S RESPONSE \nSUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS YEAR ENDED JUNE 30, 2023 \n \nPRIOR YEAR FINANCIAL STATEMENT FINDINGS \n \nFS 2022-001 Finding Status: \n \nInternal Controls over Financial Reporting Previously Reported Corrective Action Implemented \n \nPRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \n \nFA 2022-001 Federal Awarding Agency: Pass-Through Entity: \n \nStrengthen Controls over Expenditures U.S. Department of Education Georgia Department of Education \n \nFinding Status: \n \nPreviously Reported Corrective Action Implemented \n \n Section IV Findings and Questioned Costs \n \n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2023 \n \nI SUMMARY OF AUDITOR'S RESULTS \n \nFinancial Statements \n \nType of auditor's report issued: \nGovernmental Activities, Each Major Fund, and Fiduciary Activities \n \nUnmodified \n \nInternal control over financial reporting: \n Material weakness(es) identified?  Significant deficiency(ies) identified? \n \nNo None Reported \n \nNoncompliance material to financial statements noted: \n \nNo \n \nFederal Awards \n \nInternal control over major programs: \n Material weakness(es) identified?  Significant deficiency(ies) identified? \n \nNo None Reported \n \nType of auditor's report issued on compliance for major programs: \n \nAll 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 \nAssistance Listing Numbers Assistance Listing Program or Cluster Title \n \n84.010 84.027, 84.173 \n84.425 \n \nTitle I Grants to Local Educational Agencies Special Education Cluster \nEducation Stabilization Fund \n \nDollar threshold used to distinguish between Type A and Type B programs: \n \n$763,449.93 \n \nAuditee qualified as low-risk auditee? \n \nNo \n \nII FINANCIAL STATEMENT FINDINGS No matters were reported. Ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. \n \n "},{"id":"dlg_ggpd_1384460361-2023-05-26","title":"Polk School District, Cedartown, Georgia, annual financial report for the fiscal year ended 2022 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":null,"dc_date":["2023-05-26"],"dcterms_description":["Began with: Fiscal year ended June 30, 2014.","Report year covers fiscal year.","Fiscal year ended June 30, 2014, released in 2016? 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Map and Government Information Library"],"edm_is_shown_by":["https://dlg.galileo.usg.edu/do:dlg_ggpd_1384460361-2023-05-26"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_1384460361-2023-05-26"],"dcterms_temporal":null,"dcterms_rights_holder":null,"dcterms_bibliographic_citation":null,"dlg_local_right":null,"dcterms_medium":["state government records"],"dcterms_extent":null,"dlg_subject_personal":null,"iiif_manifest_url_ss":null,"dcterms_subject_fast":null,"fulltext":"POLK SCHOOL DISTRICT CEDARTOWN, GEORGIA \nANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED \nJUNE 30, 2022 (Including Independent Auditor's Reports) \n \n Polk County School District \n \nTable of Contents \n \nSection I \n \nFinancial \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 \n3 \n \nD \n \nReconciliation of the Governmental Funds Balance Sheet \n \nto the Statement of Net Position \n \n4 \n \nE \n \nStatement of Revenues, Expenditures and Changes in Fund Balances \n \nGovernmental Funds \n \n5 \n \nF \n \nReconciliation of the Governmental Funds Statement of \n \nRevenues, Expenditures and Changes in Fund Balances \n \nto the Statement of Activities \n \n6 \n \nG \n \nStatement of Fiduciary Net Position \n \nFiduciary Funds \n \n7 \n \nH \n \nStatement of Changes in Fiduciary Net Position \n \nFiduciary Funds \n \n8 \n \nI Notes to the Basic Financial Statements \n \n9 \n \nSchedules \n \nRequired Supplementary Information \n \n1 Schedule of Proportionate Share of the Net Pension Liability \n \nTeachers Retirement System of Georgia \n \n45 \n \n2 Schedule of Contributions  Teachers Retirement System of Georgia \n \n46 \n \n3 Schedule of Proportionate Share of the Net Pension Liability \n \nEmployees' Retirement System of Georgia \n \n47 \n \n4 Schedule of Contributions  Employees' Retirement System of Georgia \n \n48 \n \n5 Schedule of Proportionate Share of the Net Pension Liability \n \nPublic School Employees Retirement System of Georgia \n \n49 \n \n Required Supplementary Information (Continued) \n \n6 Schedule of Proportionate Share of the Net OPEB Liability \n \nSchool OPEB Fund \n \n50 \n \n7 Schedule of Contributions  School OPEB Fund \n \n51 \n \n8 Schedule of Changes in the Net Pension Liability and Related Ratios \n \nSocial Security Replacement Plan \n \n52 \n \n9 Schedule of Contributions  Social Security Replacement Plan \n \n54 \n \n10 Schedule of Investment Returns  Social Security Replacement Plan \n \n55 \n \n11 Note to the Required Supplementary Information \n \n56 \n \n12 Schedule of Revenues, Expenditures and Changes in Fund \n \nBalances - Budget and Actual General Fund \n \n57 \n \nSupplementary Information \n \n13 Schedule of Expenditures of Federal Awards \n \n58 \n \n14 Schedule of State Revenue \n \n60 \n \n15 Schedule of Approved Local Option Sales Tax Projects \n \n62 \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 \nSummary Schedule of Prior Audit Findings \n \nSection IV Findings and Questioned Costs \nSchedule of Findings and Questioned Costs \n \nSection V \n \nManagement's Corrective Action for Current Year Findings \nSchedule of Management's Corrective Action \n \n Section I Financial \n \n Greg S. Griffin State Auditor \nINDEPENDENT AUDITOR'S REPORT \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 Dr. Katherine Thomas, Superintendent and Members of the Polk County School District \nReport on the Audit of the Financial Statements \nOpinions \nWe have audited the accompanying financial statements of the governmental activities, each major fund, and fiduciary activities of the Polk County School District (School District) as of and for the year ended June 30, 2022, 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. \nIn our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and fiduciary activities of the School District as of June 30, 2022, 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. \nBasis for Opinions \nWe conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. \nWe are required to be independent of the School District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. \nResponsibilities of Management for the Financial Statements \nManagement is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for 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. \n270 Washington Street, SW, Suite 4-101 Atlanta, Georgia 30334 | Phone (404) 656-2180 \n \n In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the School District's ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. \nAuditor's Responsibilities for the Audit of the Financial Statements \nOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. \nIn performing an audit in accordance with GAAS and Government Auditing Standards, we: \n Exercise professional judgment and maintain professional skepticism throughout the audit. \n Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. \n Obtain an understanding of internal control relevant to the audit 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 School District's internal control. Accordingly, no such opinion is expressed. \n Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. \n Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the School District's ability to continue as a going concern for a reasonable period of time. \nWe are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit. \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 is the responsibility of management and, 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 \n \n historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, 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 appropriate evidence to express an opinion or provide any assurance. \nSupplementary 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 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 GAAS. 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 May 26, 2023 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, \nGreg S. Griffin State Auditor \nMay 26, 2023 \n \n (This page left intentionally blank) \n \n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2022 \nINTRODUCTION \nThe intent of this discussion and analysis is to look at the Polk County School District's (School District) financial performance as a whole. The reader should review the notes to the basic financial statements and the financial statements to enhance their understanding of the School District's financial performance. The School District's financial statements for the fiscal year ended June 30, 2022, 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 Position 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. The fund financial statements provide information about all of the School District's funds. \nFINANCIAL HIGHLIGHTS \nKey financial highlights for fiscal year 2022 are as follows: \nOn the government-wide financial statements: \n Government-wide net position at June 30, 2022 was approximately $14.6 million. Net position reflects the difference between all non-fiduciary assets of the School District including capital assets, net of depreciation, deferred outflows and non-fiduciary liabilities, both short-term and long-term, and deferred inflows. The net position at June 30, 2022 of $ 1 4 . 6 million represented a n i n crease of approximately $17.0 million when compared to the prior year. This increase is due, in large part, to a $25.0 million bond issuance, an increase state and federal revenue, and an increase in capital assets. \n The School District had approximately $98.1 million in expenses relating to governmental activities; only $79.8 million of these expenses were offset by program specific charges for services, operating and capital grants and contributions. However, the general revenues (primarily property and sales taxes) of $35.2 million provided additional funding of these expenses. \n As stated above, general revenues accounted for $35.2 million or about 31% of all revenues totaling $115.0 million. Program specific revenues in the form of charges for services, operating and capital grants, and contributions accounted for the balance of these revenues. \n \nSource of Revenues \n \nGeneral RevenueEqualization \nGeneral Revenue- 8% Sales Taxes \n \nGeneral RevenueAll Other 1% \n \n7% \n \nGeneral RevenueProperty Taxes 15% \n \nProgram Revenues 69% \n \ni \n \n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2022 \nOn the fund financial statements: \n Among major funds, the general fund had $107.8 million in revenues and $105.0 million in expenditures. The general fund balance of approximately $29.9 million at June 30, 2022 increased by approximately $2.8 million from the prior year. \nOVERVIEW OF THE FINANCIAL STATEMENTS \nThese financial statements consist of three parts; management's discussion and analysis (this section), the basic financial statements, including notes to the 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 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 School District, the general fund, capital projects fund, and debt service fund are all considered to be major funds. The School District has no non-major funds as defined by GASB Statement No. 34 for 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. \nGovernment-Wide Statements \nSince the School District has no operations that have been classified as \"Business Activities\", the government-wide financial statements are basically a consolidation of the entire School District's operating funds into one column called governmental activities. In reviewing the government-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 School District's non-fiduciary assets, deferred outflows, liabilities and deferred inflows which uses the accrual basis of accounting similar to the accounting used by most private-sector companies. This basis of accounting takes into accounts 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. \nii \n \n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2022 \nWhen analyzing government-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 that with constraints placed on the use by external \nsources such as creditors, grantors, contributors or laws and regulations. o Unrestricted net position is net position that does not meet any of the above \nrestrictions. \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 non-major funds as defined by generally accepted accounting principles. \nThe School 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 governmental 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 as well as an employer sponsored pension plan. 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 government-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, deferred outflows of resources, total liabilities and deferred inflows of resources, is one indicator of the financial condition of the School 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 decreases in the School District's net \niii \n \n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2022 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 non-financial factors should be considered in assessing the overall health of the School District. The School District had approximately $90.7 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 position, it must be recognized that this portion of the net position is not available for future spending. The deficit balance of unrestricted net position of approximately $90.4 million reflects the net pension liability adjustments as required by GASB Statement No. 68 and GASB Statement No. 71 and the OPEB liability adjustments as required by GASB Statement No. 75. \niv \n \n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2022 \n \nTable 1 provides a summary of the School District's net position for this fiscal year as compared to the prior year. \n \nTable 1 Net Position \n \nAssets Current and Other Assets Capital Assets, Net \n \nGovernmental Activities \n \nFiscal Year \n \nFiscal Year \n \n2022 \n \n2021 \n \n$ \n \n79,919,741 $ \n \n48,014,370 \n \n109,446,229 \n \n104,333,621 \n \nTotal Assets \n \n189,365,970 \n \n152,347,991 \n \nDeferred Outflows of Resources Related Defined Benefits Pension Plans Related OPEB Plan \n \n26,235,313 11,275,092 \n \n23,954,465 11,673,846 \n \nTotal Deferred Outflows of Resources \n \n37,510,405 \n \n35,628,311 \n \nLiabilities Current and Other Liabilities Long-Term Liabilities Net Pension Liability Net OPEB Liability \n \n16,920,587 46,834,309 33,717,547 43,940,016 \n \n11,120,899 22,083,856 83,796,704 58,031,576 \n \nTotal Liabilities \n \n141,412,459 \n \n175,033,035 \n \nDeferred Inflows of Resources Related Defined Benefits Pension Plans Related OPEB Plan \n \n46,050,855 24,824,048 \n \n2,248,386 13,079,497 \n \nTotal Deferred Inflows of Resources \n \n70,874,903 \n \n15,327,883 \n \nNet Position Net Investment in Capital Assets Restricted Unrestricted (Deficit) \n \n90,682,727 14,307,001 (90,400,715) \n \n87,925,017 12,676,924 (102,986,557) \n \nTotal Net Position \n \n$ \n \n14,589,013 $ \n \n(2,384,616) \n \nv \n \n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2022 \n \nTotal net position increased by approximately $17.0 million in fiscal year 2022 from the prior year. This change in net position is detailed in Table 2 below. Table 2 also shows the change in net position as compared to the prior fiscal year. \nTable 2 Change in Net Position \n \nRevenues Program Revenues: Charges for Services Operating Grants and Contributions Capital Grants and Contributions \n \nGovernmental Activities \n \nFiscal Year \n \nFiscal Year \n \n2022 \n \n2021 \n \n$ 2,688,881 $ 77,080,268 36,000 \n \n1,776,872 61,405,531 \n1,095,530 \n \nTotal Program Revenues \n \n79,805,149 \n \n64,277,933 \n \nGeneral Revenues: Taxes Property Taxes For Maintenance and Operations Other Taxes Sales Taxes Special Purpose Local Option Sales Tax Other Taxes For Debt Services Other Sales Tax Grant and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous \nSpecial Item Donation - Paving Labor and Equipment Cost \n \n17,038,784 66,198 \n \n17,338,022 60,718 \n \n7,384,750 387,686 \n8,793,135 105,312 \n1,468,484 \n- \n \n6,375,615 339,373 \n7,851,861 78,609 \n1,432,807 \n38,070 \n \nTotal General Revenues and Special Item \n \n35,244,349 \n \n33,515,075 \n \nTotal Revenues \n \n115,049,498 \n \n97,793,008 \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 Long-Term Debt \n \n60,412,617 \n4,794,646 2,313,918 1,119,020 1,119,349 4,438,058 1,486,285 11,782,136 3,814,558 \n567,752 152,688 \n122,887 5,388,800 \n563,155 \n \n65,694,333 \n3,931,760 1,480,517 1,319,190 1,200,815 5,020,228 1,090,677 7,101,774 3,009,554 \n205,646 103,096 \n94,606 4,981,987 \n412,171 \n \nTotal Expenses \n \n98,075,869 \n \n95,646,354 \n \nIncrease in Net Position \n \n$ 16,973,629 $ 2,146,654 \nvi \n \n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2022 \nCost of Providing Services \n \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 Year \n \nFiscal Year \n \n2022 \n \n2021 \n \nNet Cost of Services \n \nFiscal Year \n \nFiscal Year \n \n2022 \n \n2021 \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 Food Services Interest on Long-Term Debt \n \n$ 60,412,617 $ 65,694,333 $ 4,284,606 $ 21,010,077 \n \n4,794,646 2,313,918 1,119,020 1,119,349 4,438,058 1,486,285 11,782,136 3,814,558 \n567,752 152,688 \n \n3,931,760 1,480,517 1,319,190 1,200,815 5,020,228 1,090,677 7,101,774 3,009,554 \n205,646 103,096 \n \n705,328 649,314 (96,781) (362,848) 1,458,275 1,454,746 8,685,385 2,371,220 456,350 \n86,648 \n \n982,611 726,044 231,246 (147,139) 2,551,718 1,073,546 4,509,759 1,311,161 202,755 \n47,228 \n \n122,887 5,388,800 \n563,155 \n \n94,606 4,981,987 \n412,171 \n \n122,887 (2,107,565) \n563,155 \n \n94,516 (1,637,272) \n412,171 \n \nTotal Expenses \n \n$ 98,075,869 $ 95,646,354 $ 18,270,720 $ 31,368,421 \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 and other financing sources of $146.8 million and total expenditures of $120.5 million in fiscal year 2022. Total governmental fund balances of approximately $62.5 million at June 30, 2022, increased approximately $26.3 million from the prior year. \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 2022, the School District amended its general fund budget as needed. \n \nvii \n \n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2022 \n \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. \n \nFor the general fund, the final actual revenues of $107.8 million were less than the final budgeted amount of $111.1 million by $3.3 million. This can be attributed to receiving far less federal funds than originally expected. \n \nThe general fund's final actual expenditures of $105.0 million were less than the final budget amount of $121.7 million by approximately $16.7 million. The School District believes it effectively managed its budget during the fiscal year. \n \nCAPITAL ASSETS AND DEBT ADMINISTRATION \n \nCapital Assets \n \nAt fiscal year ended June 30, 2022, the School District had $109.4 million invested in capital assets, net of accumulated depreciation, all in governmental activities. These assets are made up of a broad range of items including building and improvement, land, land improvements, food service, transportation and maintenance equipment. Table 4 reflects a summary of these balances, net of accumulated depreciation, as compared to the prior fiscal year. \n \nTable 4 Capital Assets \n \nGovernmental Activities \n \nFiscal Year \n \nFiscal Year \n \n2022 \n \n2021 \n \nLand Construction in Progress Building and Improvements Equipment Land Improvements \n \n$ \n \n2,384,621 $ \n \n2,384,621 \n \n3,152,911 \n \n1,505,066 \n \n97,522,453 \n \n96,988,939 \n \n3,088,278 \n \n1,776,631 \n \n3,297,966 \n \n1,678,364 \n \nTotal \n \n$ 109,446,229 $ 104,333,621 \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 Debt Administration \n \nPOLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2022 \n \nAt June 30, 2022, the School District had $41.6 million in bonds outstanding with $5.5 million due within one year and $171 thousand in financed purchases with $171 thousand due within one year. \n \nTable 5 Debt at June 30 \n \nGovernmental Activities \n \nFiscal Year \n \nFiscal Year \n \n2022 \n \n2021 \n \nBond Debt Financed Purchases \nTotal \nNet Pension and OPEB Liabilities \n \n$ 41,625,000 $ 20,050,000 \n \n171,392 \n \n336,607 \n \n$ 41,796,392 $ 20,386,607 \n \nAt June 30, 2022 the School District reported liabilities for its proportionate share of the net pension and OPEB liabilities. Reporting these liabilities was required by GASB Statement No. 68, GASB Statement No. 71 and GASB Statement No. 75. \n \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 School District is financially stable. The School District's operating millage for 2021 was 14.139. It was rolled back in 2022 to 14.110. \n The general fund had a fund balance as of June 30, 2022 of $29.9 million which is up $2.8 million from prior year. \n The School District is scheduled to receive a $954,582 increase of state revenue for fiscal year 2023. The general fund is healthy enough to offset the payroll increases. In fiscal year 2022, bonds were sold at a premium of $28,669,380. \n During the COVID Pandemic, the School District received CARES and ESSER monies to help with extra expenditures, staff retention, and new positions needed. \n The School District will continue to renovate the existing facilities to accommodate student growth as needed. The School District plans to fund additional capital outlays with the one percent local sales tax revenue, general obligation bonds, and state capital outlay grants. Roofing, paving, and HVAC improvements have been made. Technology upgrades will continue to be made. Additions and modifications will be done as needed. In addition, safety measures have and will continue to be addressed. Polk County School District formed its own Police Department with an officer at every school. \n \nix \n \n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2022 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 Mrs. Tammy McDonald, Executive Financial Officer, Polk County School District, 612 South College Street, Cedartown, Georgia 30125. You may also email your questions to Mrs. McDonald at tammy@polk.k12.ga.us. \nx \n \n Polk County School District \n \n POLK COUNTY SCHOOL DISTRICT STATEMENT OF NET POSITION \nJUNE 30, 2022 \nASSETS Cash and Cash Equivalents Investments Accounts Receivable, Net \nTaxes State Government Federal Government Other Inventories Restricted Assets Investments with Fiscal Agent or Trustee Capital Assets, Non-Depreciable Capital Assets, Depreciable (Net of Accumulated Depreciation) \nTotal Assets \nDEFERRED OUTFLOWS OF RESOURCES Related to Defined Benefit Pension Plans Related to OPEB Plan \nTotal Deferred Outflows of Resources \nLIABILITIES Accounts Payable Salaries and Benefits 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 Related to Defined Benefit Pension Plans Related to OPEB Plan \nTotal Deferred Inflows of Resources \nNET POSITION Net 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 \n64,310,963.18 \n \n10,016.55 \n \n2,330,006.73 6,740,461.35 4,426,366.16 \n67,076.25 60,015.91 \n \n1,974,835.03 5,537,532.49 103,908,696.94 189,365,970.59 \n \n26,235,312.86 11,275,092.00 37,510,404.86 \n \n3,974,315.71 10,228,541.50 \n391,226.85 1,961,342.46 \n284,224.37 80,936.10 33,717,547.00 43,940,016.00 \n6,411,379.61 40,422,929.75 141,412,459.35 \n \n46,050,855.00 24,824,048.00 70,874,903.00 \n \n90,682,727.38 \n \n6,403,609.29 5,354,645.58 2,548,745.91 (90,400,715.06) \n \n$ \n \n14,589,013.10 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 1 - \n \n POLK COUNTY SCHOOL DISTRICT STATEMENT OF ACTIVITIES \nFOR THE YEAR ENDED JUNE 30, 2022 \n \nEXHIBIT \"B\" \n \nGOVERNMENTAL ACTIVITIES 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 Long-Term Debt \nTotal Governmental Activities \n \nEXPENSES \n \nCHARGES FOR SERVICES \n \nPROGRAM REVENUES OPERATING GRANTS AND \nCONTRIBUTIONS \n \nCAPITAL GRANTS AND CONTRIBUTIONS \n \nNET (EXPENSES) REVENUES \nAND CHANGES IN NET POSITION \n \n$ \n \n60,412,615.30 $ \n \n257,047.84 $ \n \n55,835,664.41 $ \n \n4,794,645.62 2,313,917.94 1,119,020.17 1,119,349.15 4,438,058.27 1,486,285.05 11,782,136.26 3,814,558.37 \n567,752.11 152,688.09 \n \n2,195,733.92 - \n45,569.51 - \n157,253.13 - \n3,447.01 3,130.97 \n5,836.06 \n \n1,893,584.04 1,664,603.62 1,170,231.81 1,482,197.29 2,822,529.69 \n31,539.49 3,093,303.91 1,440,207.28 \n111,402.27 60,004.04 \n \n122,886.73 5,388,800.30 \n563,155.15 \n \n20,861.75 \n- \n \n7,475,000.38 \n- \n \n$ \n \n98,075,868.51 $ \n \n2,688,880.19 $ \n \n77,080,268.23 $ \n \nGeneral Revenues Taxes Property Taxes For Maintenance and Operations Other Taxes 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 Total General Revenues \n \nChange in Net Position \n \nNet Position - Beginning of Year \n \nNet Position - End of Year \n \n35,297.22 $ \n199.79 \n502.99 \n- \n36,000.00 \n \n(4,284,605.83) \n(705,327.66) (649,314.32) \n96,781.15 362,848.14 (1,458,275.45) (1,454,745.56) (8,685,385.34) (2,371,220.12) (456,349.84) (86,648.20) \n(122,886.73) 2,107,564.82 (563,155.15) \n(18,270,720.09) \n \n17,038,783.55 66,198.35 \n \n7,384,750.48 387,685.54 \n8,793,135.00 105,312.38 \n1,468,484.06 35,244,349.36 \n \n16,973,629.27 \n \n(2,384,616.17) \n \n$ \n \n14,589,013.10 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 2 - \n \n ASSETS Cash and Cash Equivalents Investments Accounts Receivable, Net \nTaxes State Government Federal Government Other Inventories Restricted Investments with a Fiscal Agent or Trustee \nTotal Assets \nLIABILITIES Accounts Payable Salaries and Benefits Payable Contracts Payable Retainages Payable Deposits and Unearned Revenues \nTotal Liabilities \nDEFERRED INFLOWS OF RESOURCES Unavailable Revenue - Property Taxes \nFUND BALANCES Nonspendable Restricted Assigned Unassigned \nTotal Fund Balances \nTotal Liabilities, Deferred Inflows of Resources, and Fund Balances \n \nPOLK COUNTY SCHOOL DISTRICT BALANCE SHEET \nGOVERNMENTAL FUNDS JUNE 30, 2022 \n \nEXHIBIT \"C\" \n \nGENERAL FUND \n \nCAPITAL PROJECTS \nFUND \n \nDEBT SERVICE \nFUND \n \nTOTAL \n \n$ \n \n31,376,254.30 $ \n \n26,374,733.78 $ \n \n10,016.55 \n \n- \n \n1,611,999.99 \n \n- \n \n6,740,461.35 \n \n- \n \n4,426,366.16 \n \n- \n \n67,076.25 \n \n- \n \n60,015.91 \n \n- \n \n- \n \n- \n \n$ \n \n44,292,190.51 $ \n \n26,374,733.78 $ \n \n6,559,975.10 $ - \n718,006.74 - \n1,974,835.03 \n9,252,816.87 $ \n \n64,310,963.18 10,016.55 \n2,330,006.73 6,740,461.35 4,426,366.16 \n67,076.25 60,015.91 \n1,974,835.03 \n79,919,741.16 \n \n$ \n \n2,720,895.66 $ \n \n10,228,541.50 \n \n410,039.09 \n \n65,438.62 \n \n80,936.10 \n \n13,505,850.97 \n \n1,253,420.05 $ - \n1,551,303.37 218,785.75 - \n3,023,509.17 \n \n- $ - \n \n3,974,315.71 10,228,541.50 \n1,961,342.46 284,224.37 80,936.10 \n16,529,360.14 \n \n918,748.06 \n \n- \n \n- \n \n918,748.06 \n \n60,015.91 6,343,593.38 1,379,404.59 22,084,577.60 29,867,591.48 \n \n23,351,224.61 \n23,351,224.61 \n \n9,252,816.87 \n9,252,816.87 \n \n60,015.91 38,947,634.86 \n1,379,404.59 22,084,577.60 62,471,632.96 \n \n$ \n \n44,292,190.51 $ \n \n26,374,733.78 $ \n \n9,252,816.87 $ \n \n79,919,741.16 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 3 - \n \n POLK COUNTY SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \nTO THE STATEMENT OF NET POSITION JUNE 30, 2022 \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. Land Construction in progress Buildings and improvements Equipment Land improvements Accumulated depreciation \nSome liabilities are not due and payable in the current period and, therefore, are not reported in the funds. Net 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. Related 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. Bonds payable Accrued interest payable Financed purchases payable Compensated absences payable Unamortized bond premiums \nNet position of governmental activities (Exhibit \"A\") \n \n$ \n \n62,471,632.96 \n \n$ \n \n2,384,621.10 \n \n3,152,911.39 \n \n134,006,443.37 \n \n8,091,792.32 \n \n4,934,903.88 \n \n(43,124,442.63) \n \n109,446,229.43 \n \n$ \n \n(33,717,547.00) \n \n(43,940,016.00) \n \n(77,657,563.00) \n \n$ \n \n(19,815,542.14) \n \n(13,548,956.00) \n \n(33,364,498.14) 918,748.06 \n \n$ \n \n(41,625,000.00) \n \n(391,226.85) \n \n(171,392.13) \n \n(328,055.38) \n \n(4,709,861.85) \n \n(47,225,536.21) \n \n$ \n \n14,589,013.10 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 4 - \n \n POLK COUNTY SCHOOL DISTRICT STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES \nGOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2022 \n \nEXHIBIT \"E\" \n \nREVENUES Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous Total Revenues \nEXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Enterprise Operations Food Services Operation Capital Outlay Debt Services Principal Dues and Fees Interest Total Expenditures \nRevenues over (under) Expenditures \nOTHER FINANCING SOURCES (USES) Proceeds of Bonds Premiums on Bonds Sold Transfers In Transfers Out Total Other Financing Sources (Uses) Net Change in Fund Balances \nFund Balances - Beginning \nFund Balances - Ending \n \nGENERAL FUND \n \nCAPITAL PROJECTS \nFUND \n \nDEBT SERVICE FUND \n \nTOTAL \n \n$ \n \n17,160,531.89 $ \n \n387,685.54 \n \n59,124,015.69 \n \n27,030,124.13 \n \n2,688,880.19 \n \n4,679.98 \n \n1,418,087.28 \n \n107,814,004.70 \n \n- $ 32,049.55 50,396.78 82,446.33 \n \n- $ 7,384,750.48 \n68,582.85 7,453,333.33 \n \n17,160,531.89 7,772,436.02 59,124,015.69 27,030,124.13 2,688,880.19 \n105,312.38 1,468,484.06 115,349,784.36 \n \n64,003,869.78 \n4,983,300.88 2,444,387.79 1,313,833.54 1,244,224.44 5,186,750.24 1,131,372.87 13,191,290.59 4,088,791.84 \n568,470.30 121,561.79 122,886.73 5,781,577.70 864,163.39 \n105,046,481.88 2,767,522.82 \n \n19,879.75 \n436,387.47 588,372.95 7,211,707.72 \n165,215.20 2,075.00 \n12,584.80 8,436,222.89 (8,353,776.56) \n \n- \n3,500.00 - \n3,425,000.00 - \n833,250.00 4,261,750.00 3,191,583.33 \n \n64,023,749.53 \n4,983,300.88 2,444,387.79 1,313,833.54 1,247,724.44 5,186,750.24 1,567,760.34 13,779,663.54 4,088,791.84 \n568,470.30 121,561.79 122,886.73 5,781,577.70 8,075,871.11 \n3,590,215.20 2,075.00 \n845,834.80 117,744,454.77 \n(2,394,670.41) \n \n2,767,522.82 \n \n21,493,055.56 3,669,380.00 2,784,959.84 - \n27,947,395.40 19,593,618.84 \n \n3,506,944.44 - \n(2,784,959.84) 721,984.60 \n3,913,567.93 \n \n25,000,000.00 3,669,380.00 2,784,959.84 (2,784,959.84) 28,669,380.00 26,274,709.59 \n \n27,100,068.66 \n \n3,757,605.77 \n \n5,339,248.94 \n \n36,196,923.37 \n \n$ \n \n29,867,591.48 $ \n \n23,351,224.61 $ \n \n9,252,816.87 $ \n \n62,471,632.96 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 5 - \n \n POLK COUNTY SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF \nREVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2022 \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. Capital 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. General obligation bonds issued, including a premium of $3,669,380.00 Bond principal retirements Financed purchase payments Amortization of bond premium \nDistrict pension/OPEB contributions are reported as expenditures in the governmental funds when made. However, they are reported as deferred outflows of resources in the Statement of Net Position because the reported net pension/OPEB liability is measured a year before the District's report date. Pension/OPEB expense, which is the change in the net pension/OPEB liability adjusted for changes in deferred outflows and inflows of resources related to pensions/OPEB, is reported in the Statement of Activities. Pension expense OPEB expense \nSome items reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. Accrued interest on issuance of bonds Compensated absences \nChange in net position of governmental activities (Exhibit \"B\") \n \n$ \n \n26,274,709.59 \n \n$ \n \n8,334,518.76 \n \n(3,221,910.11) \n \n5,112,608.65 (55,549.99) \n \n$ \n \n(28,669,380.00) \n \n3,425,000.00 \n \n165,215.20 \n \n398,231.50 \n \n(24,680,933.30) \n \n$ \n \n8,557,535.87 \n \n1,948,255.00 \n \n10,505,790.87 \n \n$ \n \n(113,476.85) \n \n(69,519.70) \n \n(182,996.55) \n \n$ \n \n16,973,629.27 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 6 - \n \n ASSETS Cash and Cash Equivalents Investments Receivables, Net \nOther Total Assets \nLIABILITIES Due to Broker \nNET POSITION Employee's Pension Benefits Held in Trust for Private Purposes \n \nPOLK COUNTY SCHOOL DISTRICT STATEMENT OF FIDUCIARY NET POSITION \nFIDUCIARY FUNDS JUNE 30, 2022 \n \nEXHIBIT \"G\" \n \nPRIVATE PURPOSE TRUSTS \n \nPENSION TRUST FUND December 31, 2021 \n \n$ \n \n9,095.72 $ \n \n47,671.27 \n \n- \n \n5,102,405.73 \n \n- \n \n337,570.00 \n \n$ \n \n9,095.72 $ \n \n5,487,647.00 \n \n$ \n \n3,493.00 \n \n$ \n \n5,484,154.00 \n \n$ \n \n9,095.72 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 7 - \n \n POLK COUNTY SCHOOL DISTRICT STATEMENT OF CHANGES IN FIDCUCIARY NET POSITION \nFIDUCIARY FUNDS YEAR ENDED JUNE 30, 2022 \n \nEXHIBIT \"H\" \n \nADDITIONS Contributions Employer Contributions Investment Earnings Net Increase in Fair Value of Investments Total Additions \nDEDUCTIONS Administrative Expenses Benefits Paid to Participants Other Deductions Total Deductions \nChange in Net Position \nNet Position - Beginning \nNet Position - Ending \n \nPRIVATE PURPOSE TRUSTS \n \nPENSION TRUST FUND December 31, 2021 \n \n$ \n \n- $ \n \n337,570.00 \n \n- \n \n618,247.00 \n \n- \n \n955,817.00 \n \n604.00 604.00 \n \n25,369.00 392,159.00 \n417,528.00 \n \n(604.00) \n \n538,289.00 \n \n9,699.72 \n \n4,945,865.00 \n \n$ \n \n9,095.72 $ \n \n5,484,154.00 \n \nThe notes to the basic financial statements are an integral part of this statement. \n \n- 8 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \n \nNOTE 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY \nReporting Entity \nThe Polk County School District (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, deferred outflows of resources, deferred inflows of resources 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. \n \n- 9 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \n \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. \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 longterm principal and interest. \nThe School District reports the following fiduciary fund types: \n Private purpose trust funds are used to report all trust arrangements, other than those properly reported elsewhere, in which principal and income benefit individuals, private organizations or other governments. \n Pension trust fund accounts for the activities of Polk County School District Social Security Replacement Plan, a single employer defined benefit pension plan for the group of employees covered by the Public School Employees Retirement Systems (PSERS). \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 \n \n- 10 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \n \nlevied. 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 certain revenues reported in the governmental funds to be available if they are collected within 60 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 and compensated absences, 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 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 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 2022, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 87, Leases. The primary objective of this statement is to better meet the information needs of financial statement users by improving accounting and financial reporting for leases by governments. This Statement increases the usefulness of government's financial statements by requiring recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. The adoption of this statement did not have an impact on the School District's financial statements. \nFiscal Year End \nAll funds are reported using fiscal years which end on June 30, except defined benefit pension plan (fiduciary fund), which has a fiscal year ending December 31. \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- 11 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \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. \nRestricted Assets \nCertain resources set aside for repayment of debt are classified as restricted assets on the Statement of Net Position because their use is limited by applicable debt statutes, e.g. Qualified Zone Academy Bond sinking funds. \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. \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- 12 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \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 \nAll $ 50,000.00 $ 50,000.00 $ 50,000.00 $ 50,000.00 \n \nN/A 20 to 60 years 25 to 60 years 5 to 50 years 10 to 20 years \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. \nCompensated Absences \nCompensated absences payable consists of vacation leave employees earned based on services already rendered. \nVacation leave of 10 days is awarded annually to all full-time personnel employed on a twelve-month basis with less than 15 years of experience and 15 days annually to all full-time personnel employed on a twelve-month basis with between 15 and 40 years of experience. Twelve-month employees with 40 or more years of services to the School District are eligible for 5 additional vacation days annually. No other employees are eligible to earn vacation leave. \nFor twelve-month employees with 15 or more years of experience, all unused vacation days may be carried forward into the next employment year up to and including June 30. This is a maximum of 15 days earned from previous year. Upon expiration of this limit, a maximum of 5 unused vacation days may be carried forward. Therefore, this employee could have a maximum of 20 days of acquired vacation at the start of a new fiscal year. \nFor twelve-month employees with less than 15 years of experience, all unused vacation days may be carried forward into the next employment year up to and including June 30. This is a maximum of 10 days earned from previous year. Upon expiration of this limit, a maximum of 5 unused vacation days may be carried forward. Therefore, this employee could have a maximum of 15 days of acquired vacation at the start of a new fiscal year. \n \n- 13 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \n \nUpon terminating employment, the School District pays all unused and unforfeited vacation benefits to employees. Accordingly, vacation benefits are accrued as a liability in the government-wide financial statements. A liability for these amounts is reported in the governmental fund financial statements only if they have matured, for example, as a result of employee resignations and retirements by fiscal-year end. \nMembers of the Teachers Retirement System of Georgia (TRS) may apply unused sick leave toward early retirement. The liability for early retirement will be borne by TRS rather than by the individual School Districts. Otherwise, sick leave does not vest with the employee, and no liability is reported in the School District's financial statements. \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 straightline 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. \nPost-Employment 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 Post-Employment 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. \n \n- 14 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \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. \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 Polk County Board of Commissioners adopted the property tax levy for the 2021 tax digest year (calendar year) on August 30, 2021 (levy date) based on property values as of January 1, 2021. Taxes were due on December 1, 2021 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2021 tax digest are reported as revenue in the governmental funds for fiscal year 2022. The Polk 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, 2022, for maintenance and operations amounted to $14,766,701.20. \n \n- 15 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \n \nThe tax millage rate levied for the 2021 tax digest year (calendar year) for the School District was as follows (a mill equals $1 per thousand dollars of assessed value): \n \nSchool Operations \n \n14.11 mills \n \nAdditionally, Title Ad Valorem Tax revenues, at the fund reporting level, amounted to $2,327,632.34 during fiscal year ended June 30, 2022. \nSales Taxes \nEducation Special Purpose Local Option Sales Tax (ESPLOST), at the fund reporting level, during the year amounted to $7,384,750.48 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, CASH EQUIVALENTS AND INVESTMENTS \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 POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \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, 2022, School District had deposits with a carrying amount of $33,268,401.73, and a bank balance of $36,775,576.77. The bank balances insured by Federal depository insurance were $963,765.37. \nAt June 30, 2022, $35,811,811.40 of the School District's bank balances was exposed to custodial credit risk. This balance was in the State's Secure Deposit Program (SDP). \nThe School District participates in the State's Secure Deposit Program (SDP), a multi-bank pledging pool. The SDP requires participating banks that accept public deposits in Georgia to operate under the policy and procedures of the program. The Georgia Office of State Treasurer (OST) sets the collateral requirements and pledging level for each covered depository. There are four tiers of collateralization levels specifying percentages of eligible securities to secure covered deposits: 25%, 50%, 75%, and 110%. The SDP also provides for collateral levels to be increased in the amount of up to 125% if economic or financial conditions warrants. The program lists the types of eligible criteria. The OST approves authorized custodians. \nIn accordance with the SDP, if a covered depository defaults, losses to public depositors are first satisfied with any applicable insurance, followed by demands of payment under any letters of credit or sale of the covered depository collateral. If necessary, any remaining losses are to be satisfied by assessments made against the other participating covered depositories. Therefore, for disclosure purposes, all deposits of the SDP are considered to be fully collateralized. \n \n- 17 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \n \nReconciliation of cash and cash equivalents balances to carrying value of deposits: \n \nCash and cash equivalents Statement of Net Position Statement of Fiduciary Net Position \n \n$ 64,310,963.18 56,766.99 \n \nTotal cash and cash equivalents \n \n64,367,730.17 \n \nAdd: Deposits with original maturity of three months or more reported \nas investments \n \n10,016.55 \n \nLess: Investment pools reported as cash and cash equivalents \nGeorgia Fund 1 \n \n31,109,344.99 \n \nTotal carrying value of deposits - June 30, 2022 \n \n$ 33,268,401.73 \n \nCategorization of Cash Equivalents \nThe School District reported cash equivalents of $31,109,344.99 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, $1.00 per share, which approximates fair value. The pool is an AAAf rated investment pool by Standard and Poor's. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2022 was 43 days. \nGeorgia Fund 1, administered by the State of Georgia, Office of the State Treasurer, is not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office of the State Treasurer for the Georgia Fund 1, does not provide for investment in derivatives or similar investments. Additional information on the Georgia Fund 1 is disclosed in the State of Georgia Annual Comprehensive Financial Report, which is publicly available at https://sao.georgia.gov/statewide-reporting/acfr. \n \n- 18 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \n \nCategorization of Investments \n \nAt June 30, 2022, the School District had the following investments: \n \nInvestment Type \n \nFair Value \n \nInvestment Maturity Less Than 1 Year \n \nDebt Securities U. S. Treasuries U. S. Agencies Implicitly Guaranteed \n \n$ \n \n2,064.47 $ \n \n2,064.47 \n \n1,972,770.56 \n \n1,972,770.56 \n \nOther Investments \n \nMutual Bond Funds \n \n2,145,304.92 \n \n- \n \nMutual Equity Funds \n \n2,909,795.74 \n \n- \n \nMutual Money Market Funds \n \n47,305.07 \n \n- \n \nTotal Investments \n \n$ \n \n7,077,240.76 $ \n \n1,974,835.03 \n \nFair Value of Investments \n \nThe School District measures and records its investments using fair value measurement guidelines established by generally accepted accounting principles. These guidelines recognize a three-tiered fair value hierarchy, as follows: \n \nLevel 1: Quoted prices for identical investments in active markets; \n \nLevel 2: Observable inputs other than quoted market prices; and, \n \nLevel 3: Unobservable inputs. \n \nAt June 30, the School District had the following investments by fair value level: \n \nInvestments by fair value level: \n \nFair Value \n \nLevel 1 \n \nLevel 2 \n \nDebt Securities \n \nU. S. Treasuries \n \n$ \n \nU. S. Agencies \n \nImplicitly Guaranteed \n \nMutual Bond Funds \n \nEquity Mutual Funds - Domestic \n \nEquity Mutual Funds - International \n \nMutual Money Market Fund \n \n2,064.47 $ \n1,972,770.56 2,145,304.92 2,659,193.16 \n250,602.58 47,305.07 \n \n- $ \n2,659,193.16 250,602.58 47,305.07 \n \n2,064.47 \n1,972,770.56 2,145,304.92 \n- \n \nTotal investments by fair value level $ 7,077,240.76 $ 2,957,100.81 $ 4,120,139.95 \nInterest Rate Risk Interest rate risk is the risk that changes in interest rates of debt investment will adversely affect the fair value of an investment. The School District does not have a formal policy for managing interest rate risk. \n \n- 19 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \n \nCustodial Credit Risk \n \nCustodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, the School District will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The School District does not have a formal policy for managing custodial credit risk. \n \nAt June 30, 2022, $5,055,100.66 of the School District's applicable investments were held by the investment's counterparty, not in the School District's name. \n \nCredit Quality Risk \n \nCredit quality risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. State law limits investments to those prescribed O.C.G.A. 36-83-4. The School District does not have a formal policy that would further limit its investment choices or one that addresses credit risk. \n \nThe investments subject to credit quality risk are reflected below: \n \nRated Debt Investments \n \nFair Value \n \nQuality Ratings \n \nAAA \n \nUnrated \n \nDebt Securities \n \nU. S.Treasuries \n \n$ \n \n2,064.47 $ \n \n2,064.47 $ \n \n- \n \nU. S. Agencies \n \nImplicitly Guaranteed \n \n1,972,770.56 1,972,770.56 \n \n- \n \nMutual Bond Funds \n \n2,145,304.92 \n \n- \n \n2,145,304.92 \n \nMutual Money Market Funds \n \n47,305.07 \n \n- \n \n47,305.07 \n \nTotals by Quality Ratings $ 4,167,445.02 $ 1,974,835.03 $ 2,192,609.99 \n \nConcentration of Credit Risk \nConcentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The School District does not have a formal policy for managing concentration of credit risk. More than 5% of the School District's investments are in Mutual Equity Funds, Mutual Bond Funds and U.S. Agencies Implicitly Guaranteed. These investments are 41%, 30%, and 28%, respectively, of the School District's total investments. \nNOTE 5: RESTRICTED ASSETS \nThe restricted assets represent the cash and investment balance of $1,974,835.03, for the QZAB Bond Sinking Fund. \n \n- 20 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \n \nNOTE 6: CAPITAL ASSETS \n \nThe following is a summary of changes in the capital assets for governmental activities during the fiscal year: \n \nGovernmental Activities Capital Assets, \nNot Being Depreciated: Land Construction in Progress \n \nBalances July 1, 2021 \n \nIncreases \n \nDecreases \n \nTransfers \n \nBalances June 30, 2022 \n \n$ 2,384,621.10 $ \n \n- $ \n \n1,505,065.63 \n \n5,273,625.63 \n \n- $ \n \n- $ \n \n- \n \n(3,625,779.87) \n \n2,384,621.10 3,152,911.39 \n \nTotal Capital Assets Not Being Depreciated \n \n3,889,686.73 \n \n5,273,625.63 \n \n- \n \n(3,625,779.87) \n \n5,537,532.49 \n \nCapital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements \nLess Accumulated Depreciation: Buildings and Improvements Equipment Land Improvements \n \n130,749,478.75 6,566,238.42 3,192,036.65 \n33,760,539.76 4,789,607.46 1,513,672.55 \n \n750,240.98 1,686,841.15 \n623,811.00 \n2,723,450.85 375,194.29 123,264.97 \n \n161,287.25 \n- \n161,287.25 \n- \n \n2,506,723.64 - \n1,119,056.23 \n \n134,006,443.37 8,091,792.32 4,934,903.88 \n \n- \n \n36,483,990.61 \n \n- \n \n5,003,514.50 \n \n- \n \n1,636,937.52 \n \nTotal Capital Assets, Being Depreciated, Net \nGovernmental Activities Capital Assets - Net \n \n100,443,934.05 \n \n(161,016.98) \n \n$ 104,333,620.78 $ 5,112,608.65 $ \n \n- \n \n3,625,779.87 \n \n103,908,696.94 \n \n- $ \n \n- $ 109,446,229.43 \n \nCurrent year depreciation expense by function is as follows: \n \nInstruction \n \n$ \n \nSupport Services \n \nMaintenance and Operation of Plant \n \nStudent Transportation Services \n \nFood Services \n \n2,863,203.74 \n17,840.77 295,951.66 44,913.94 \n \n$ 3,221,910.11 \n \n- 21 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \n \nNOTE 7: INTERFUND TRANSFERS Interfund transfers for the year ended June 30, 2022, consisted of the following: \n \nTransfers to \n \nTransfers From Debt Service \nFund \n \nCapital Projects Fund \n \n$ 2,784,959.84 \n \nTransfers are used to move Special Purpose Local Option Sales Tax (SPLOST) revenues collected by the debt service fund to the capital projects fund for the payment of cost associated with construction projects approved by the Special Purpose Local Option Sales Tax (SPLOST) referendum. \n \nNOTE 8: LONG-TERM LIABILITIES The changes in long-term liabilities during the fiscal year for governmental activities were as follows: \n \nBalance July 1, 2021 \n \nGovernmental Activities \n \nBalance \n \nAdditions \n \nDeductions \n \nJune 30, 2022 \n \nDue Within One Year \n \nGeneral Obligation (G.O.) Bonds Qualified Zone Academy Bonds \nTotal Bond Debt \n \n$ 18,050,000.00 $ 25,000,000.00 $ 3,425,000.00 $ 39,625,000.00 $ 3,500,000.00 \n \n2,000,000.00 \n \n- \n \n- \n \n2,000,000.00 2,000,000.00 \n \n20,050,000.00 25,000,000.00 3,425,000.00 41,625,000.00 5,500,000.00 \n \nFinanced Purchases Compensated Absences (1) Unamortized Bond Premiums \n \n336,607.33 258,535.68 1,438,713.35 \n \n101,277.52 3,669,380.00 \n \n165,215.20 31,757.82 \n398,231.50 \n \n171,392.13 328,055.38 4,709,861.85 \n \n171,392.13 - \n739,987.48 \n \n$ 22,083,856.36 $ 28,770,657.52 $ 4,020,204.52 $ 46,834,309.36 $ 6,411,379.61 \n \n(1) The portion of compensated absences due within one year has been determined to be immaterial to the basic financial statements. \nGeneral Obligation Debt Outstanding \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. \nThe School District's outstanding general obligation bonds related to governmental activities of $18,050,000.00 and $25,000,000.00 contain a provision that in the event of a nonpayment, the State Board is authorized to and must withhold from any state appropriations to which the School District may be entitled and apply so much thereof as shall be necessary to the payment of the principal and interest on such indebtedness then due. \nDuring the current year, the School District issued general obligation bonds totaling $25,000,000.00 to finance the costs of acquiring, constructing, and equipping certain capital outlay projects of the School District and the costs of issuance of the bonds, including capitalized interest. \n \n- 22 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \n \nGeneral 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 2018 General Government - Series 2022 \n \n4.00% - 5.00% 5.00% \n \n3/1/2018 5/11/2022 \n \n3/1/2026 $ 18,050,000.00 $ 14,625,000.00 \n \n3/1/2031 \n \n25,000,000.00 \n \n25,000,000.00 \n \n$ 43,050,000.00 $ 39,625,000.00 \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 \n2023 2024 2025 2026 2027 2028 - 2031 \n \n$ 3,500,000.00 $ 1,703,194.44 \n \n3,600,000.00 \n \n1,806,250.00 \n \n3,700,000.00 \n \n1,626,250.00 \n \n3,825,000.00 \n \n1,441,250.00 \n \n3,650,000.00 \n \n1,250,000.00 \n \n21,350,000.00 \n \n2,727,500.00 \n \n$ 739,987.48 739,987.48 739,987.48 637,222.23 431,691.76 \n1,420,985.42 \n \nTotal Principal and Interest $ 39,625,000.00 $ 10,554,444.44 $ 4,709,861.85 \n \nQualified Zone Academy Bonds (QZAB) \n \nSection 226 of the Taxpayer Relief Act of 1997 (Public Law 105-34) provides for a source of capital at no or at nominal interest rates for costs incurred by School Districts in connection with the establishment of special academic programs, in partnership with the business community. The School District, in agreement with Regions Bank, has entered into such an arrangement. \n \nThis agreement establishes a method of repayment for qualified interest-free debt instrument. The agreement requires the School District to deposit funds annually into a sinking fund account on or before June 30, 2022. The amount on deposit at June 30, 2022 was $1,974,835.03. \n \nIn the event the amount of funds lawfully available is not sufficient to pay the QZAB payments when due in any year, the School District shall levy an ad valorem tax on all taxable property located within the boundaries of the School District subject to taxation for such purposes, at such rate or rates (subject to the 20 Mills Limitation) as may be necessary to produce in each calendar year revenues which shall be sufficient to fulfill the School District's obligations. \n \nDebt currently outstanding under Qualified Zone Academy Bonds is as follows: \n \nDescription \n \nInterest Rate \n \nIssue Date \n \nMaturity Date \n \nAmount Issued \n \nAmount Outstanding \n \nGeneral Government - QZAB - Series 2006 \n \n0.00% 12/5/2006 12/15/2022 $ 2,000,000.00 $ 2,000,000.00 \n \n- 23 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \n \nThe following schedule reports the annual Qualified Zone Academy Bond payments: \n \nFiscal Year Ended June 30: \n \nPrincipal \n \n2023 \n \n$ 2,000,000.00 \n \nObligations Under Financed Purchases \nThe School District has acquired school buses under the provisions of various long-term agreements classified as financed purchases for accounting purposes because it provides for a transfer of ownership by the end of the payment schedule. Payments on the agreements shall be made from the School District's capital projects fund. \nIf sufficient funds are not appropriated to make payments required under this agreement for the original term or any renewal term, this agreement shall terminate at the end of the then current original term or renewal term, and the School District shall not be obligated to make payments under this agreement beyond the then current term, and all of the School District's right, title and interest in and to the equipment shall terminate at the end of the then current term. If such a non-appropriation occurs, the School District shall, no later than the end of the then-current term, return the equipment to a location in the continental United States specified by the lessor, freight and insurance prepaid by the School District, and in the condition in which it is required to be maintained hereunder. \nGovernmental Activities \n \nEquipment \n \n$ \n \nLess: Accumulated Depreciation \n \n827,733.00 289,706.55 \n \nDebt currently outstanding is as follows: \n \nPurpose \n \nInterest Rate \n \nIssue Date \n \n$ \n \n538,026.45 \n \nMaturity Date \n \nAmount Issued \n \nAmount Outstanding \n \nSchool buses \n \n3.74% 10/26/2018 10/5/2022 $ 827,733.00 $ 171,392.13 \n \nThe following is a schedule of total finance purchase payments: \n \nFiscal Year Ended June 30: \n \nPrincipal \n \n2023 \n \n$ \n \n171,392.13 \n \nCompensated Absences \nCompensated absences represent obligations of the School District relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. Typically, the general fund is the fund used to liquidate this long-term debt. The School District uses the vesting method to compute compensated absences. \n \n- 24 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \n \nNOTE 9: RISK MANAGEMENT \n \nInsurance \n \nCommercial Insurance \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; and natural disasters. 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. \n \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 \n2021 $ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n2022 $ \n \n- \n \n$ \n \n18,566.60 $ \n \n18,566.60 \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$ \n \n100,000.00 \n \nNOTE 10: FUND BALANCE CLASSIFICATION DETAILS \n \nThe School District's financial statements include the following amounts presented in the aggregate at June 30, 2022: \n \nNonspendable Inventories \nRestricted Continuation of Federal Programs Capital Projects Debt Service \nAssigned School Activity Accounts \nUnassigned \n \n$ \n \n60,015.91 \n \n$ 6,343,593.38 23,351,224.61 9,252,816.87 \n \n38,947,634.86 \n \n1,379,404.59 22,084,577.60 \n \nFund Balance, June 30, 2022 \n \n$ 62,471,632.96 \n \n- 25 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \n \nWhen multiple categories of fund balance are available for an 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 \nNOTE 11: SIGNIFICANT COMMITMENTS \n \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, 2022. \n \nProject \n \nUnearned Executed Contracts (1) \n \nPayments through June 30, 2022 (2) \n \nCentral Office Additions/Modifications \n \n$ \n \n195,205.87 $ \n \n343,703.26 \n \nCedartown High School Turf \n \n1,026,833.30 \n \n724,045.71 \n \nRockmart High School Turf \n \n1,005,374.00 \n \n723,092.85 \n \nNorthside Elementary School HVAC \n \n699,315.79 \n \n717,829.39 \n \nWestside Elementary School HVAC \n \n321,421.60 \n \n637,540.18 \n \n$ \n \n3,248,150.56 $ 3,146,211.39 \n \n(1) The amounts described are not reflected in the basic financial statements. (2) Payments include contracts and retainages payable at year end. \n \nNOTE 12: 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 13: 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 post-employment 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. \n- 26 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \n \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 $1,544,832.00 for the year ended June 30, 2022. 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, 2022, the School District reported a liability of $43,940,016.00 for its proportionate share of the net OPEB liability. The net OPEB liability was measured as of June 30, 2021. The total OPEB liability used to calculate the net OPEB liability was based on an actuarial valuation as of June 30, 2020. An expected total OPEB liability as of June 30, 2021 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, 2021. At June 30, 2021, the School District's proportion was 0.405694%, which was an increase of 0.010590% from its proportion measured as of June 30, 2020. \n \n- 27 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \n \nFor the year ended June 30, 2022, the School District recognized OPEB expense of ($403,942.00). At June 30, 2022, the School District reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: \n \nOPEB Deferred Outflows of Resources \n \nDeferred Inflows of Resources \n \nDifferences between expected and actual \n \nexperience \n \n$ \n \n- $ 20,062,872.00 \n \nChanges of assumptions \n \n8,046,095.00 \n \n3,585,477.00 \n \nNet difference between projected and actual earnings on OPEB plan investments \n \n- \n \n69,675.00 \n \nChanges in proportion and differences between School District contributions and proportionate share of contributions \n \n1,684,165.00 \n \n1,106,024.00 \n \nSchool District contributions subsequent to \n \nthe measurement date \n \n1,544,832.00 \n \n- \n \nTotal \n \n$ 11,275,092.00 $ 24,824,048.00 \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, 2023. 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 \n2023 2024 2025 2026 2027 Thereafter \n \n$ (4,196,320.00) $ (3,772,149.00) $ (2,623,906.00) $ (1,640,744.00) $ (2,191,611.00) $ (669,058.00) \n \n- 28 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \n \nActuarial Assumptions: The total OPEB liability as of June 30, 2021 was determined by an actuarial valuation as of June 30, 2020 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, 2021: \n \nOPEB: \n \nInflation \n \n2.50% \n \nSalary increases \n \n3.00%  8.75%, including inflation \n \nLong-term expected rate of return Healthcare cost trend rate \n \n7.00%, compounded annually, net of investment expense, and including inflation \n \nPre-Medicare Eligible \n \n6.75% \n \nMedicare Eligible \n \n5.13% \n \nUltimate trend rate \n \nPre-Medicare Eligible Medicare Eligible Year of Ultimate trend rate \n \n4.50% 4.50% \n \nPre-Medicare Eligible \n \n2029 \n \nMedicare Eligible \n \n2023 \n \nMortality rates were based on the Pub-2010 Mortality Tables for Males or Females, as appropriate, as follows: \n For TRS members: Post-retirement mortality rates for service retirements and beneficiaries were based on the Pub-2010 Teachers Headcount Weighted Below Median Healthy Retiree mortality table (ages set forward one year and adjusted 106%) with the MP-2019 Projection scale applied generationally. The rates of improvement were reduced by 20% for all years prior to the ultimate rate. Post-retirement mortality rates for disability retirements were based on the Pub-2010 Teachers Mortality Table for Disabled Retirees (ages set forward one year and adjusted 106%) with the MP- 2019 Projection scale applied generationally. The rates of improvement were reduced by 20% for all years prior to the ultimate rate. The Pub-2010 Teachers Headcount Weighted Below Median Employee mortality table with ages set forward one year and adjusted 106% was used for death prior to retirement. Future improvement in mortality rates was assumed using the MP-2019 projection scale generationally. These rates of improvement were reduced by 20% for all years prior to the ultimate rate. \n For PSERS members: Pre-retirement mortality rates were based on the Pub-2010 General Employee Mortality Table, with no adjustment, with the MP-2019 Projections scale applied generationally. Post-retirement mortality rates for service retirements were based on the Pub-2010 General Healthy Annuitant Mortality Table (ages set forward one year and adjusted 105% for males and 108% for females) with the MP-2019 Projection scale applied generationally. Post-retirement mortality rates for disability retirements were based on the Pub-2010 General Disabled Mortality Table (ages set back three years for males and adjusted 103% for males and 106% for females) with the MP-2019 Projections scaled applied \n \n- 29 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \n \ngenerationally. Post-retirement mortality rates for beneficiaries were based on the Pub-2010 General Contingent Survivor Mortality Table (ages set forward two years and adjust 106% for males and 158% for females) with the MP-2019 Project scale applied generationally. \n \nThe actuarial assumptions used in the June 30, 2020 valuation were based on the results of an actuarial experience study for the pension systems, which covered the five-year period ending June 30, 2018, with the exception of the assumed annual rate of inflation with changed from 2.75% to 2.50%, effective with the June 30, 2018 valuation. \n \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, 2020 valuation were based on a review of recent plan experience done concurrently with the June 30, 2020 valuation. \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 \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 \nFixed income Equi ti es \n \n30.00% 70.00% \n \n0.14% 9.20% \n \nTotal \n \n100.00% \n \n*Net of Inflation \nDiscount Rate: In order to measure the total OPEB liability for the School OPEB Fund, a single equivalent interest rate of 2.20% was used as the discount rate, as compared with last year's rate of 2.22%. This is comprised mainly of the yield or index rate for 20-year tax-exempt general obligation bonds with an average rating of AA or higher (2.16% per the Municipal Bond Index Rate). The projection of cash flows used to determine the discount rate assumed that contributions from members and from the employers 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 2145. \n \n- 30 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \n \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 2.20%, 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 (1.20%) or 1-percentage-point higher (3.20%) than the current discount rate: \n \n1% Decrease (1.20%) \n \nCurrent Discount Rate (2.20%) \n \n1% Increase (3.20%) \n \nSchool District's proportionate share of the Net OPEB liability \n \n$ 50,233,293.00 $ \n \n43,940,016.00 $ 38,671,948.00 \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 OPEB liability, as well as what the School District's proportionate share of the net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1percentage-point lower or 1-percentage-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$ 37,284,807.00 $ \n \n43,940,016.00 $ 52,259,551.00 \n \nOPEB Plan Fiduciary Net Position: Detailed information about the OPEB plan's fiduciary net position is available in the Annual Comprehensive Financial Report, which is publicly available at https://sao.georgia.gov/statewide-reporting/acfr. \n \nNOTE 14: RETIREMENT PLANS \n \nThe School District participates in various retirement plans administered by the State of Georgia, as further explained below. \n \nTeachers Retirement System of Georgia (TRS) \n \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 O.C.G.A. 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. \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- 31 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \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 6.00% of their annual pay during fiscal year 2022. The School District's contractually required contribution rate for the year ended June 30, 2022 was 19.81% of annual School District payroll, of which 19.73% of payroll was required from the School District and 0.08% of payroll was required from the State. For the current fiscal year, employer contributions to the pension plan were $9,667,779.93 and $39,188.59 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/financials. \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 4.00% of annual compensation, up to $4,200.00, plus 6.00% 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 total required contribution rate for the year ended June 30, 2022 was 24.63% of annual covered payroll for old and new plan members and 21.57% for GSEPS members. Contributions are \n- 32 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \n \nexpected 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 $29,874.93 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/financials. \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 $15.50, 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 $103,068.00. \nPension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions \nAt June 30, 2022, the School District reported a liability of $30,171,593.00 for its proportionate share of the net pension liability for TRS ($29,999,801.00) and ERS ($171,792.00). \n \n- 33 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \n \nThe TRS net pension liability reflected a reduction for support provided to the School District by the State of Georgia for certain public school support personnel. The amount recognized by the School District as its proportionate share of the net pension liability, the related State of Georgia support, and the total portion of the net pension liability that was associated with the School District were as follows: \n \nSchool District's proportionate share of the net pension liability \n \n$ 29,999,801.00 \n \nState of Georgia's proportionate share of the net pension liability associated with the School District \n \n119,045.00 \n \nTotal \n \n$ 30,118,846.00 \n \nThe net pension liability for TRS and ERS was measured as of June 30, 2021. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2020. An expected total pension liability as of June 30, 2021 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, 2021. \nAt June 30, 2021, the School District's TRS proportion was 0.339198%, which was an increase of 0.011556% from its proportion measured as of June 30, 2020. At June 30, 2021, the School District's ERS proportion was 0.007345%, which was a decrease of 0.000362% from its proportion measured as of June 30, 2020. \nAt June 30, 2022, 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 $81,342.00. \nThe PSERS net pension liability was measured as of June 30, 2021. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2020. An expected total pension liability as of June 30, 2021 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, 2021. \nFor the year ended June 30, 2022, the School District recognized pension expense of $1,075,741.11 for TRS, $95,959.00 for ERS and $855.00 for PSERS and revenue of ($103,335.00) for TRS and $855.00 for PSERS. The revenue is support provided by the State of Georgia. For TRS the State of Georgia support is provided only for certain support personnel. \n \n- 34 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \n \nAt June 30, 2022, the School District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: \n \nTRS Deferred Outflows of Resources \n \nDeferred Inflows of Resources \n \nERS Deferred Outflows of Resources \n \nDeferred Inflows of Resources \n \nDifferences between expected and actual experience \n \n$ 7,158,906.00 $ \n \n- \n \n$ 4,065.00 $ \n \n- \n \nChanges of assumptions \n \n5,806,364.00 \n \n- \n \n49,471.00 \n \n- \n \nNet difference between projected and actual earnings on pension plan investments \n \n- \n \n43,881,235.00 \n \n- \n \n158,777.00 \n \nChanges in proportion and differences between School District contributions and proportionate share of contributions \n \n2,342,323.00 \n \n553,259.00 \n \n4,507.00 \n \n8,666.00 \n \nSchool District contributions subsequent to the measurement date \n \n9,667,779.93 \n \n- \n \n29,874.93 \n \n- \n \nTotal \n \n$ 24,975,372.93 $ 44,434,494.00 $ 87,917.93 $ 167,443.00 \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, 2023. 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 \n2023 2024 2025 2026 \n \n$ (5,527,288.00) $ (3,779.00) $ (5,241,776.00) $ (24,623.00) $ (7,884,335.00) $ (38,586.00) $ (10,473,502.00) $ (42,412.00) \n \nActuarial Assumptions: The total pension liability as of June 30, 2021 was determined by an actuarial valuation as of June 30, 2020, using the following actuarial assumptions, applied to all periods included in the measurement: \n \nTeachers Retirement System: \n \nInflation Salary increases Investment rate of return \nPost-retirement benefit increases \n \n2.50% 3.00%  8.75%, average, including inflation 7.25%, net of pension plan investment expense, including inflation 1.50% semi-annually \n \n- 35 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \n \nPost-retirement mortality rates for service retirements and beneficiaries were based on the Pub-2010 Teachers Headcount Weighted Below Median Healthy Retiree mortality table (ages set forward one year and adjusted 106%) with the MP-2019 Projection scale applied generationally. The rates of improvement were reduced by 20% for all years prior to the ultimate rate. Post-retirement mortality rates for disability retirements were based on the Pub-2010 Teachers Mortality Table for Disabled Retirees (ages set forward one year and adjusted 106%) with the MP-2019 Projection scale applied generationally. The rates of improvement were reduced by 20% for all years prior to the ultimate rate. The Pub-2010 Teachers Headcount Weighted Below Median Employee mortality table with ages set forward one year and adjusted 106% as used for death prior to retirement. Future improvement in mortality rates was assumed using the MP-2019 projection scale generationally. These rates of improvement were reduced by 20% for all years prior to the ultimate rate. \nThe actuarial assumptions used in the June 30, 2020 valuation were based on the results of an actuarial experience study for the period July 1, 2013  June 30, 2018. \n \nEmployees' Retirement System: \n \nInflation Salary increases Investment rate of return \n \n2.50% \n3.00% - 6.75%, including inflation \n7.00%, net of pension plan investment expense, including inflation \n \nMortality rates are as follows: \n The Pub-2010 General Employee Table, with no adjustments, projected generationally with the MP-2019 scale is used for both males and females while in active service. \n The Pub-2010 Family of Tables projected generationally with the MP-2019 Scale and with further adjustments are used for post-retirement mortality assumptions as follows: \n \nParticipant Type \n \nMembership Table \n \nSet Forward (+) / Setback (-) \n \nAdjustment to Rates \n \nService Retirees Disability Retirees Beneficiaries \n \nGeneral Healthy Annuitant General Disabled General Contingent Survivors \n \nMale: +1; Female: +1 Male: -3; Female: 0 Male: +2; Female: +2 \n \nMale: 105%; Male: 103%; Male: 106%; \n \nFemale: 108% Female: 106% Female: 105% \n \nThe actuarial assumptions used in the June 30, 2020 valuation were based on the results of an actuarial experience study for the period July 1, 2014  June 30, 2019. \n \nPublic School Employees Retirement System: \n \nInflation Salary increases Investment rate of return \n \n2.50% \nN/A \n7.00%, net of pension plan investment expense, including inflation \n \nPost-retirement benefit increases 1.50% semi-annually \n \n- 36 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \n \nMortality rates are as follows: \n The Pub-2010 General Employee Table, with no adjustments, projected generationally with the MP-2019 scale is used for both males and females while in active service. \n The Pub-2010 Family of Tables projected generationally with the MP-2019 Scale and with further adjustments are used for post-retirement mortality assumptions as follows: \n \nParticipant Type Service Retirees \nDisability Retirees Beneficiaries \n \nMembership Table \nGeneral Healthy Below Median Annuitant General Disabled General Below - Median Contingent Survivors \n \nSet Forward (+) / Setback (-) \n \nAdjustment to Rates \n \nMale: +2; Female: +2 Male: -3; Female: 0 \nMale: +2; Female: +2 \n \nMale: 101%; Female: 103% Male: 103%; Female: 106% \nMale: 104%; Female: 99% \n \nThe actuarial assumptions used in the June 30, 2020 valuation were based on the results of an actuarial experience study for the period July 1, 2014  June 30, 2019. \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 allocation and 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 \nLong-term expected real rate of return* \n \nERS/PSERS Target \nallocation \n \nLong-term expected real rate of return* \n \nFixed income Domestic large stocks Domestic small stocks International developed market stocks International emerging market stocks Alternative \n \n30.00% 46.30% \n1.20% 11.50% \n6.00% 5.00% \n \n(0.80)% 9.30% 13.30% 9.30% 11.30% 10.60% \n \n30.00% 46.40% \n1.10% 11.70% \n5.80% 5.00% \n \n(1.50)% 9.20% 13.40% 9.20% 10.40% 10.60% \n \nTotal \n \n100.00% \n \n100.00% \n \n* Rates shown are net of inflation. \nDiscount Rate: The discount rate used to measure the total TRS pension liability was 7.25%. The discount rate used to measure the total ERS and PSERS pension liability was 7.00%. 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 plans' fiduciary net position were projected to \n- 37 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \n \nbe 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 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 7.25% and 7.00%, 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 (6.25% and 6.00%) or 1-percentage-point higher (8.25% and 8.00%) than the current rate: \n \nTeachers Retirement System: \n \n1% Decrease (6.25%) \n \nCurrent Discount Rate (7.25%) \n \n1% Increase (8.25%) \n \nSchool District's proportionate share of the net pension liability \n \n$ 80,811,515.00 $ \n \n29,999,801.00 $ (11,636,893.00) \n \nEmployees' Retirement System: \n \n1% Decrease (6.00%) \n \nCurrent Discount Rate (7.00%) \n \n1% Increase (8.00%) \n \nSchool District's proportionate share of the \n \nnet pension liability \n \n$ \n \n314,806.00 $ \n \n171,792.00 $ \n \n50,843.00 \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 publicly available at www.trsga.com/publications and http://www.ers.ga.gov/financials. \n \nPolk County School District Social Security Replacement Plan \n \nPlan Description: As of January 2004, the Polk County School District established a single employer defined benefit pension plan for the group of employees covered under the Public Service Employees Retirement System (PSERS). Recognizing that PSERS was a limited defined benefit plan that does not meet the requirements of a qualified social security replacement plan, the new plan was established for these employees to meet the requirements of a social security replacement plan. \n \nThe School District Social Security Replacement Plan (Plan) provides a pension benefit for each participant at retirement, equal to 1.5% of the participant's Average Monthly Compensation multiplied by his Years of Credited Service up to 40 Years of Credited Service. Years of service subsequent to July 1, 1991, are counted for purposes of determining a participant's benefit. The funding method and determination of benefits payable are provided in or authorized by various sections of Title 47 of the Official Code of Georgia Annotated (\"OCGA\"). The Plan does not issue a separate financial report. \n \nThe employee is always 100% vested in his accrued benefit in the Plan. \n \nThe Plan is funded by employer contributions held in trust by Reliance Trust Company. The Actuary for the Plan is Future Plan by Ascensus. The Actuary determines the Plan liabilities and required contributions on an annual basis. \n \n- 38 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \n \nAs of January 1, 2022, there were 435 Plan participants, consisting of the following: \nJanuary 1, 2022 \n \nActive plan members \n \n113 \n \nVested terminated participants \n \n219 \n \nRetirees, beneficiaries, and disables participants \n \n103 \n \n435 \n \nFunding Policy: Employees are neither required nor permitted to make contributions to the Plan. The Polk County School District (Employer) makes contributions required to fund the cost of the benefits provided to its eligible employees by this Plan. The Employer makes such contributions as necessary to fund the Plan in accordance with all applicable minimum funding standards under Georgia Law. \n \nThe Employer's Annual Required Minimum contribution is the actuarially determined amount necessary to fund the plan benefits. The required contribution for the plan year ending within the current fiscal year is $337,570.00. The current contribution rate is 16.38% of annual covered payroll. \n \nInvestments: The Plan maintains an investment policy which fosters prudent and sound judgment in the management of plan assets to ensure safety of capital consistent with its fiduciary responsibility to the citizens of Georgia and which conforms to the Plan's investment policy. All investments are consistent with Polk School District's policy and applicable Federal and state laws. \n \nInvestments are reported at fair value. Securities are traded on a national or international exchange and are valued at the last reported sales price. The Plan's investment policy requires diversification of assets in an effort to avoid the risk of large losses and maximize the investment return to the Plan consistent with market and economic risk. \n \nAs of December 31, 2021, the Plan's assets are: \n \nAsset Class \n \nCash and Equivalent Receivables Short-Term Investments Domestic Equities International Equities Fixed Income \n \n$ \n \n47,671.27 \n \n337,570.00 \n \n47,305.07 \n \n2,659,193.16 \n \n250,602.58 \n \n2,145,304.92 \n \n$ 5,487,647.00 \nFor the plan year ended December 31, 2021, the annual money-weighted rate of return on pension plan investments, net of plan investment expense, was 13.09%. \n \n- 39 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \n \nThe following table summarizes the adopted asset allocation policy at December 31, 2021: \n \nAsset Class \n \nAdopted Asset Allocation \n \nDomestic Equities International Equities Fixed Income Cash and Equivalent \nTotal \n \n40% to 50% 1% to 5% \n35% to 45% 1% to 10% \n100% \n \nPension Liability, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to the Plan: \n \nThe components of the net pension liability at December 31, 2021 were as follows: \n \nTotal pension liability \n \n$ \n \nPlan fiduciary net position \n \n9,030,108.00 (5,484,154.00) \n \nNet pension liability \n \n$ \n \n3,545,954.00 \n \nThe Plan's fiduciary net position as a percentage of its total pension liability is 60.73%. \nThe net pension liability for the Plan was measured as of December 31, 2021. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of January 1, 2021. An expected total pension liability as of December 31, 2021 was determined using standard roll-forward techniques. \nFor the year ended June 30, 2022, the School District recognized pension expense of $258,695.00 for the Plan. \nAt June 30, 2022, the School District reported deferred outflows and resources and deferred inflows of resources related to the Plan from the following sources: \n \nDifference between projected and actual earnings on pension plan investments \n \nDeferred Outflows of Resources \n \nDeferred Inflows of Resources \n \n$ \n \n334,621.00 $ \n \n264,872.00 \n \nDifferences between expected and actual experiences \n \n727,773.00 \n \n658,675.00 \n \nChanges in actuarial assumptions \n \n109,628.00 \n \n525,371.00 \n \nTotal \n \n$ 1,172,022.00 $ 1,448,918.00 \n \n- 40 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \n \nAmounts reported as deferred outflows of resources and deferred inflows of resources related to the Plan will be recognized in pension expense as follows: \nYear Ended June 30: \n \n2021 2022 2023 2024 2025 2026 \n \n$ (60,572.00) $ (170,196.00) $ (84,391.00) $ (44,733.00) $ 12,011.00 $ 70,985.00 \n \nActuarial Methods and Assumptions: The total pension liability was determined as of January 1, 2022 using the following actuarial assumptions and methods (see the January 1, 2022 actuarial valuation report for other assumptions): \n \nInflation Salary Increases Investment rate of return Single equivalent discount rate \n \n2.50% 3.00% 7.00%, net of pension plan investment expense 5.48%, net of pension plan investment expense \n \nMorality rates were bested on the RP-2014 Blue Collar with MP-2018. \n \nThe long-term expected rate of return on the Plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return, net of investment expenses and inflation, are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return weighing the expected future real rates of return by the target asset allocation percentage and by the expected inflation. Best estimates of the arithmetic real rates of return for each major asset class, included in the Plan's target asset allocation as of December 31, 2021: \n \nAsset Class \n \nTarget Allocation \n \nLong-Term Expected Real Rate of Return* \n \nDomestic Equities \n \n49% \n \nInternational Equities \n \n5% \n \nFixed Income \n \n41% \n \nCash \n \n5% \n \n7.90% 10.40% \n5.50% 2.40% \n \n*Rates shown are net of the 2.50% assumed rate of inflation. \nDiscount Rate: The discount rate used to measure the total pension liability was the single equivalent discount rate shown above. The projection of cash flows used to determine the discount rate assumed that employer contributions will be made at rates equal to actuarially determined contribution rate. Based on this assumption, the Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current Plan members through 2062 and the long-term expected rate of return of 7.00% was applied to this period. The December 31, 2021 20-year tax-free municipal bond yield of 2.06% was applied after 2062. \n \n- 41 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \n \nSensitivity of the Polk County School District's Net Pension Liability to Changes in the Discount Rate: The following represents the net pension liability calculated using the stated discount rate, as well as what the net pension liability would be if it were calculated using a discount rate that is 1percentage-point lower (4.48%) or 1-percentage-point higher (6.48%) than the current rate: \n \nSchool District's proportionate share \n \nof the net pension liability \n \n$ \n \n1% Decrease (4.48%) \n4,674,784.00 $ \n \nCurrent Rate (5.48%) \n3,545,954.00 $ \n \n1% Increase (6.48%) \n2,599,492.00 \n \nNOTE 15: TAX ABATEMENTS \nThe Development Authority of Polk County, the Cedartown Development Authority and the Rockmart Development Authority can enter into agreements with private individuals or entities for economic or industrial projects to encourage the creation of jobs and capital investment through an \"Economic Incentive Program\". This program is used to incentivize these businesses to build, relocate, expand, or renovate within incorporated and unincorporated Polk County. Each agreement provides a property tax benefit to the company through a schedule of discounted valuation that reduces, for ad valorem tax purposes, the fair market value of real and/or personal property that is held by the Authorities and leased to the company. Georgia case law and the Authorities' enabling legislation provides the Authorities with the power to enter into such agreements with private companies. \nThe Authorities may accept title to real and personal property assets from a company in return for job creation and capital investment and provide a tax benefit to the company through a lease agreement with the Authority. In considering eligibility for providing this benefit to a company, the Authorities review the following criteria: \n1. Eligible businesses can include new and existing industrial businesses. 2. But for an incentive agreement, the company would not create the jobs and investment in the community. 3. Eligible projects must involve significant investment in real and personal property. 4. The average wage of the business' employees should be above the average wage of goods producing employees in Polk County. 5. The business should offer medical benefits to all employees. 6. The impact to job retention will be considered for each expansion project. 7. As a condition of assistance, a business will be required to work with the Authority to convey title to the Authority. \nIn return for a property tax benefit, a company is required to commit to creating jobs and capital investment within a defined period as part of a performance and accountability agreement with the Authority that includes provisions for the company to pay back a prorated portion of the benefit if they fail to meet the performance criteria by a specified date. The Authorities monitor compliance with performance and accountability agreements to ensure the companies meet their commitments. \nFor the Polk County School District's year ending June 30, 2022, the cumulative property tax not collected due to incentive agreements was $56,326.98; however, $423,812.63 was paid to the Polk County School District through the Economic Incentive Program for the same period. These agreements will result in an estimated $67.0 million in new capital investment for Polk County and more than 186 \n \n- 42 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \nJUNE 30, 2022 \n \nEXHIBIT \"I\" \n \nnew/retained jobs. According to the National Association of Manufacturers, the new capital investment will generate an additional $167.4 million in our economy, and the 186 jobs will generate another 632 jobs in other sectors. \nIncluded in the $56,326.98 abated, the following are tax abatement agreement amounts with individual companies that exceed 10.00 percent of the total amount abated: \n A property tax abatement was granted to Kimoto Tech in the amount of $21,577.67.  A property tax abatement was granted to Westbound Solar in the amount of $16,750.38.  Property tax abatements were granted to Inman Solar totaling $13,373.53. \n \n- 43 - \n \n (This page left intentionally blank) \n \n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY TEACHERS RETIREMENT SYSTEM OF GEORGIA \n \nSCHEDULE \"1\" \n \nFor the Year Ended \nJune 30 \n \nSchool District's proportion of the Net Pension Liability (NPL) \n \nSchool District's proportionate share \nof the NPL \n \nState of Georgia's proportionate share of the NPL associated \nwith the School District \n \nTotal \n \nSchool District's covered payroll \n \nSchool District's proportionate share \nof the NPL as a percentage of its covered payroll \n \nPlan fiduciary net position as a percentage of \nthe total pension liability \n \n2022 2021 2020 2019 2018 2017 2016 2015 \n \n0.339198% $ 29,999,801.00 $ 0.327642% $ 79,367,716.00 $ 0.322863% $ 69,424,275.00 $ 0.327378% $ 60,768,369.00 $ 0.332680% $ 61,829,603.00 $ 0.342487% $ 70,658,887.00 $ 0.345774% $ 52,640,658.00 $ 0.346443% $ 43,768,503.00 $ \n \n119,045.00 287,053.00 327,916.00 289,755.00 748,059.00 944,080.00 600,892.00 560,177.00 \n \n$ 30,118,846.00 $ 79,654,769.00 $ 69,752,191.00 $ 61,058,124.00 $ 62,577,662.00 $ 71,602,967.00 $ 53,241,550.00 $ 44,328,680.00 \n \n$ 44,357,338.07 $ 42,459,243.32 $ 39,589,606.96 $ 39,127,366.15 $ 38,673,234.64 $ 38,069,372.98 $ 36,915,144.69 $ 35,545,926.47 \n \n67.63% 186.93% 175.36% 155.31% 159.88% 185.61% 142.60% 123.13% \n \n92.03% 77.01% 78.56% 80.27% 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- 45 - \n \n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \nSCHEDULE OF CONTRIBUTIONS TEACHERS RETIREMENT SYSTEM OF GEORGIA \n \nSCHEDULE \"2\" \n \nFor the Year Ended June 30 \n \nContractually required contribution \n \nContributions in relation to the contractually required contribution \n \nContribution deficiency (excess) \n \n2022 \n \n$ \n \n9,667,779.93 $ \n \n9,667,779.93 $ \n \n- \n \n2021 \n \n$ \n \n8,421,137.11 $ \n \n8,421,137.11 $ \n \n- \n \n2020 \n \n$ \n \n8,941,170.49 $ \n \n8,941,170.49 $ \n \n- \n \n2019 \n \n$ \n \n8,235,903.09 $ \n \n8,235,903.09 $ \n \n- \n \n2018 \n \n$ \n \n6,546,048.34 $ \n \n6,546,048.34 $ \n \n- \n \n2017 \n \n$ \n \n5,456,446.48 $ \n \n5,456,446.48 $ \n \n- \n \n2016 \n \n$ \n \n5,360,865.43 $ \n \n5,360,865.43 $ \n \n- \n \n2015 \n \n$ \n \n4,797,913.58 $ \n \n4,797,913.58 $ \n \n- \n \nSchool District's covered payroll \n \nContribution as a percentage of covered \npayroll \n \n$ \n \n49,001,199.08 \n \n$ \n \n44,357,338.07 \n \n$ \n \n42,459,243.32 \n \n$ \n \n39,589,606.96 \n \n$ \n \n39,127,366.15 \n \n$ \n \n38,673,234.64 \n \n$ \n \n38,069,372.98 \n \n$ \n \n36,915,144.69 \n \n19.73% 18.98% 21.06% 20.80% 16.73% 14.11% 14.08% 13.00% \n \nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \n \n- 46 - \n \n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \n \nSCHEDULE \"3\" \n \nFor the Year Ended June 30 \n2022 2021 2020 2019 2018 2017 2016 2015 \n \nSchool District's proportion of the Net Pension Liability \n(NPL) \n \nSchool District's proportionate share of the \nNPL \n \nSchool District's covered payroll \n \nSchool District's proportionate share of the \nNPL as a percentage of covered payroll \n \nPlan fiduciary net position as a percentage of total \npension liability \n \n0.007345% $ 0.007707% $ 0.007150% $ 0.005132% $ 0.005232% $ 0.004803% $ 0.003427% $ 0.003393% $ \n \n171,792.00 $ 324,847.00 $ 295,047.00 $ 210,978.00 $ 212,489.00 $ 227,202.00 $ 138,841.00 $ 127,258.00 $ \n \n176,070.11 206,943.46 180,218.56 130,926.01 128,331.00 111,677.30 \n78,360.00 76,400.48 \n \n97.57% 156.97% 163.72% 161.14% 165.58% 203.45% 177.18% 166.57% \n \n87.62% 76.21% 76.74% 76.68% 76.33% 72.34% 76.20% 77.99% \n \nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \n \n- 47 - \n \n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \nSCHEDULE OF CONTRIBUTIONS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \n \nSCHEDULE \"4\" \n \nFor the Year Ended June 30 \n \nContractually required contribution \n \nContributions in relation to the contractually required contribution \n \nContribution deficiency (excess) \n \nSchool District's covered payroll \n \nContribution as a percentage of covered \npayroll \n \n2022 \n \n$ \n \n2021 \n \n$ \n \n2020 \n \n$ \n \n2019 \n \n$ \n \n2018 \n \n$ \n \n2017 \n \n$ \n \n2016 \n \n$ \n \n2015 \n \n$ \n \n2014 \n \n$ \n \n2013 \n \n$ \n \n29,874.93 $ 43,418.88 $ 51,023.36 $ 44,658.15 $ 32,475.72 $ 31,838.88 $ 27,606.43 $ 17,207.88 $ 14,104.00 $ 11,306.36 $ \n \n29,874.93 $ 43,418.88 $ 51,023.36 $ 44,658.15 $ 32,475.72 $ 31,838.88 $ 27,606.43 $ 17,207.88 $ 14,104.00 $ 11,306.36 $ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n121,294.71 176,070.11 206,943.46 180,218.56 130,926.01 128,331.00 111,677.30 78,360.00 76,400.48 75,872.88 \n \n24.63% 24.66% 24.66% 24.78% 24.81% 24.81% 24.72% 21.96% 18.46% 14.90% \n \n- 48 - \n \n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA \n \nSCHEDULE \"5\" \n \nFor the Year Ended June \n30 \n \nSchool District's proportion of the \nNet Pension Liability (NPL) \n \nSchool District's proportionate share \nof the NPL \n \nState of Georgia's proportionate share of \nthe NPL associated with the School District \n \nTotal \n \nSchool District's covered payroll \n \nSchool District's proportionate share \nof the NPL as a percentage of its covered payroll \n \nPlan fiduciary net position as a \npercentage of the total pension liability \n \n2022 2021 2020 2019 2018 2017 2016 2015 \n \n0.00% $ 0.00% $ 0.00% $ 0.00% $ 0.00% $ 0.00% $ 0.00% $ 0.00% $ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n81,342.00 $ 81,342.00 $ 1,629,035.10 563,934.00 $ 563,934.00 $ 1,569,655.68 553,552.00 $ 553,552.00 $ 1,712,200.77 565,141.00 $ 565,141.00 $ 1,883,260.87 551,379.00 $ 551,379.00 $ 1,810,170.59 762,372.00 $ 762,372.00 $ 1,791,780.27 485,473.00 $ 485,473.00 $ 1,790,955.74 443,309.00 $ 443,309.00 $ 1,692,625.17 \n \nN/A \n \n98.00% \n \nN/A \n \n84.45% \n \nN/A \n \n85.02% \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 \nN/A \n \n88.29% \n \nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \n \n- 49 - \n \n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET OPEB LIABILITY \nSCHOOL OPEB FUND \n \nSCHEDULE \"6\" \n \nFor the Year Ended June 30 \n \nSchool District's proportion of the \nNet OPEB Liability (NOL) \n \nSchool District's proportionate share \nof the NOL \n \nState of Georgia's proportionate share \nof the NOL associated with the \nSchool District \n \nTotal \n \nSchool District's covered-employee \npayroll \n \nSchool District's proportionate share of the NOL as a percentage of its covered-employee \npayroll \n \nPlan fiduciary net position as a \npercentage of the total OPEB \nliability \n \n2022 2021 2020 2019 2018 \n \n0.405694% $ 43,940,016.00 $ 0.395104% $ 58,031,576.00 $ 0.391779% $ 48,079,689.00 $ 0.396941% $ 50,449,983.00 $ 0.402911% $ 56,608,834.00 $ \n \n- \n \n$ 43,940,016.00 $ 37,827,087.46 \n \n- \n \n$ 58,031,576.00 $ 36,339,858.85 \n \n- \n \n$ 48,079,689.00 $ 32,761,391.83 \n \n- \n \n$ 50,449,983.00 $ 32,469,171.98 \n \n- \n \n$ 56,608,834.00 $ 31,880,339.52 \n \n116.16% 159.69% 146.76% 155.38% 177.57% \n \n6.14% 3.99% 4.63% 2.93% 1.61% \n \nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \n \n- 50 - \n \n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \nSCHEDULE OF CONTRIBUTIONS SCHOOL OPEB FUND \n \nSCHEDULE \"7\" \n \nFor the Year Ended June 30 \n \nContractually required contribution \n \nContributions in relation to the contractually required contribution \n \nContribution deficiency (excess) \n \n2022 \n \n$ \n \n1,544,832.00 $ \n \n1,544,832.00 $ \n \n- \n \n2021 \n \n$ \n \n1,509,114.00 $ \n \n1,509,114.00 $ \n \n- \n \n2020 \n \n$ \n \n1,336,150.00 $ \n \n1,336,150.00 $ \n \n- \n \n2019 \n \n$ \n \n2,110,001.00 $ \n \n2,110,001.00 $ \n \n- \n \n2018 \n \n$ \n \n2,057,312.00 $ \n \n2,057,312.00 $ \n \n- \n \n2017 \n \n$ \n \n2,100,811.00 $ \n \n2,100,811.00 $ \n \n- \n \nSchool District's covered-employee \npayroll \n \nContribution as a percentage of covered- \nemployee payroll \n \n$ \n \n40,901,821.91 \n \n$ \n \n37,827,087.46 \n \n$ \n \n36,339,858.85 \n \n$ \n \n32,761,391.83 \n \n$ \n \n32,469,171.98 \n \n$ \n \n31,880,339.52 \n \n3.78% 3.99% 3.68% 6.44% 6.34% 6.59% \n \nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \n \n- 51 - \n \n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN THE NET POSITION LIABILITY AND RELATED RATIOS \nSOCIAL SECURITY REPLACEMENT PLAN YEAR ENDING DECEMBER 31 \n \nSCHEDULE \"8\" \n \nTotal Pension Liability Service Cost Interest Differences Between Expected and Actual Experience Change of Assumptions Benefit Payments \nNet Change in Total Pension Liability \nTotal Pension Liability - beginning \nTotal Pension Liability - ending (a) \nPlan Fiduciary Net Position Contributions - Employer Net Investment Income Benefit Payments Administrative Expenses Due to Broker \nNet change in Plan Fiduciary Net Position \nPlan Fiduciary Net Position - beginning \nPlan Fiduciary Net Position - ending (b) \nNet Pension Liability - ending (a - b) \nPlan Fiduciary Net Position as a percentage of the Total Pension Liability \nCovered-Employee Payroll \nNet Pension Liability as percentage of Covered-Employee \n \n2022 \n \n2021 \n \n2020 \n \n2019 \n \n$ \n \n215,007.00 $ \n \n196,414.00 $ \n \n200,141.00 $ \n \n205,015.00 \n \n436,433.00 \n \n436,782.00 \n \n429,921.00 \n \n424,569.00 \n \n231,688.00 \n \n74,724.00 \n \n(21,491.00) \n \n(128,097.00) \n \n(510,867.00) \n \n474,227.00 \n \n177,923.00 \n \n(149,027.00) \n \n(392,159.00) \n \n(375,690.00) \n \n(358,105.00) \n \n(333,310.00) \n \n(19,898.00) \n \n806,457.00 \n \n428,389.00 \n \n19,150.00 \n \n9,050,006.00 \n \n8,243,549.00 \n \n7,815,160.00 \n \n7,796,010.00 \n \n$ \n \n9,030,108.00 $ \n \n9,050,006.00 $ \n \n8,243,549.00 $ \n \n7,815,160.00 \n \n$ \n \n337,570.00 $ \n \n336,514.00 $ \n \n335,053.00 $ \n \n332,646.00 \n \n618,247.00 \n \n503,539.00 \n \n684,749.00 \n \n(271,717.00) \n \n(392,159.00) \n \n(375,690.00) \n \n(358,105.00) \n \n(333,310.00) \n \n(25,369.00) \n \n(9,949.00) \n \n(22,682.00) \n \n(21,147.00) \n \n- \n \n- \n \n- \n \n- \n \n538,289.00 \n \n454,414.00 \n \n639,015.00 \n \n(293,528.00) \n \n4,945,865.00 \n \n4,491,451.00 \n \n3,852,436.00 \n \n4,145,964.00 \n \n$ \n \n5,484,154.00 $ \n \n4,945,865.00 $ \n \n4,491,451.00 $ \n \n3,852,436.00 \n \n$ \n \n3,545,954.00 $ \n \n4,104,141.00 $ \n \n3,752,098.00 $ \n \n3,962,724.00 \n \n60.73% \n \n54.65% \n \n54.48% \n \n$ \n \n2,060,390.00 $ \n \n2,110,591.00 $ \n \n2,290,640.00 \n \n172.10% \n \n194.45% \n \n163.80% \n \n49.29% 2,347,678.00 \n168.79% \n \n- 52 - \n \n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN THE NET POSITION LIABILITY AND RELATED RATIOS \nSOCIAL SECURITY REPLACEMENT PLAN YEAR ENDING DECEMBER 31 \n \nSCHEDULE \"8\" \n \nTotal Pension Liability Service Cost Interest Differences Between Expected and Actual Experience Change of Assumptions Benefit Payments \nNet Change in Total Pension Liability \nTotal Pension Liability - beginning \nTotal Pension Liability - ending (a) \nPlan Fiduciary Net Position Contributions - Employer Net Investment Income Benefit Payments Administrative Expenses Due to Broker \nNet change in Plan Fiduciary Net Position \nPlan Fiduciary Net Position - beginning \nPlan Fiduciary Net Position - ending (b) \nNet Pension Liability - ending (a - b) \nPlan Fiduciary Net Position as a percentage of the Total Pension Liability \nCovered-Employee Payroll \nNet Pension Liability as percentage of Covered-Employee \n \n2018 \n \n$ \n \n202,546.00 $ \n \n416,164.00 \n \n(63,999.00) \n \n128,319.00 \n \n(332,304.00) \n \n350,726.00 \n \n7,445,284.00 \n \n$ 7,796,010.00 $ \n \n2017 \n \n2016 \n \n2015 \n \n2014 \n \n211,474.00 $ 393,557.00 \n70,820.00 (153,139.00) (321,825.00) \n \n252,078.00 $ 357,947.00 62,585.00 (61,902.00) (294,805.00) \n \n203,802.00 $ 378,679.00 (446,217.00) 471,960.00 (244,169.00) \n \n164,756.00 363,955.00 251,101.00 832,322.00 (221,185.00) \n \n200,887.00 \n \n315,903.00 \n \n364,055.00 \n \n1,390,949.00 \n \n7,244,397.00 \n \n6,928,494.00 \n \n6,564,439.00 \n \n5,173,490.00 \n \n7,445,284.00 $ 7,244,397.00 $ 6,928,494.00 $ 6,564,439.00 \n \n$ \n \n335,798.00 $ \n \n392,875.00 \n \n(332,304.00) \n \n(24,030.00) \n \n- \n \n372,339.00 \n \n3,773,625.00 \n \n$ 4,145,964.00 $ \n \n$ 3,650,046.00 $ \n \n349,969.00 $ 238,741.00 (321,825.00) (21,220.00) \n(1,113.00) \n \n315,891.00 $ (20,197.00) (294,805.00) (29,660.00) \n(1,229.00) \n \n310,889.00 $ 147,675.00 (244,169.00) (25,205.00) \n(4,493.00) \n \n304,253.00 473,233.00 (221,185.00) (23,094.00) \n(242.00) \n \n244,552.00 \n \n(30,000.00) \n \n184,697.00 \n \n532,965.00 \n \n3,529,073.00 \n \n3,559,073.00 \n \n3,374,376.00 \n \n2,841,411.00 \n \n3,773,625.00 $ 3,529,073.00 $ 3,559,073.00 $ 3,374,376.00 \n \n3,671,659.00 $ 3,715,324.00 $ 3,369,421.00 $ 3,190,063.00 \n \n53.18% $ 2,416,621.00 $ \n151.04% \n \n50.68% \n \n48.71% \n \n51.37% \n \n51.40% \n \n2,377,259.00 $ 2,600,407.00 $ 2,562,945.00 $ 2,726,676.00 \n \n154.45% \n \n142.87% \n \n131.47% \n \n117.00% \n \nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \n \n- 53 - \n \n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \nSCHEDULE OF CONTRIBUTIONS SOCIAL SECURITY REPLACEMENT PLAN \nFOR THE YEAR END DECEMBER 31 \n \nSCHEDULE \"9\" \n \nFor the Year \n2022 2021 2020 2019 2018 2017 2016 2015 2014 \n \nActual determined contribution \n \nContributions in relation to the contractually required contribution \n \nContribution deficiency (excess) \n \nSchool District's covered payroll \n \nContribution as a percentage of covered \npayroll \n \n$ \n \n337,570.00 $ \n \n$ \n \n336,514.00 $ \n \n$ \n \n335,053.00 $ \n \n$ \n \n332,646.00 $ \n \n$ \n \n335,798.00 $ \n \n$ \n \n328,611.00 $ \n \n$ \n \n315,891.00 $ \n \n$ \n \n310,889.00 $ \n \n$ \n \n304,253.00 $ \n \n337,570.00 $ 336,514.00 $ 335,053.00 $ 332,646.00 $ 335,798.00 $ 349,969.00 $ 315,891.00 $ 310,889.00 $ 304,253.00 $ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n(21,358.00) $ \n \n- \n \n$ \n \n- \n \n$ \n \n- \n \n$ \n \n2,060,390.00 2,110,591.00 2,290,640.00 2,347,678.00 2,416,621.00 2,377,259.00 2,600,407.00 2,562,945.00 2,726,676.00 \n \n16.38% 15.94% 14.63% 14.17% 13.90% 14.72% 12.15% 12.13% 11.16% \n \nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \n \n- 54 - \n \n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \nSCHEDULE OF INVESTMENT RETURNS SOCIAL SECURITY REPLACEMENT PLAN \nFOR THE YEAR END DECEMBER 31 \n \nYear Ended \n2022 2021 2020 2019 2018 2017 2016 2015 2014 \n \nAnnual Money - Weighted Rate of Return, Net of Investment Expense \n13.09% 11.52% 18.47% (6.73)% 10.88% 7.04% (0.59)% 4.55% 17.25% \n \nSCHEDULE \"10\" \n \nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \n \n- 55 - \n \n POLK COUNTY SCHOOL DISTRICT NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION \nFOR THE YEAR ENDED JUNE 30, 2022 \n \nSCHEDULE \"11\" \n \nTeachers Retirement System Change of benefit terms: There have been no changes in benefit terms. \n \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 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). \n \nOn May 15, 2019, the Board adopted recommended changes from the smoothed valuation interest rate methodology that has been in effect since June 30, 2009, to a constant interest rate method. In conjunction with the methodology, the long-term assumed rate of return in assets (discount rate) has been changed from 7.50% to 7.25%, and the assumed annual rate of inflation has been reduced from 2.75% to 2.50%. \n \nIn 2019 and later, the expectation of retired life mortality was changed to the Pub-2010 Teacher Headcount Weighted Below Median Healthy Retiree mortality table from the RP-2000 Mortality Tables. In 2019, rates of withdrawal, retirement, disability and mortality were adjusted to more closely reflect actual experience. \nEmployees' Retirement System Changes 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, and a one-time 3% payment was granted to certain retirees and beneficiaries effective July 2017. Two one-time 2% payments were granted to certain retirees and beneficiaries effective July 2018 and January 2019. Two one-time 3% payments were granted to certain retirees and beneficiaries effective July 2019 and January 2020. \n \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, withdrawal and salary increases. The expectation of retired life mortality was changed to the RP-2000 Combined Mortality Table projected to 2025 with projection scale BB (set forwarded 2 years for both males and females). \n \nA new funding policy was initially adopted the Board on March 15, 2018, and most recently amended on June 18, 2020. 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 and further reduced from 7.40% to 7.30% for the June 30, 2018 actuarial valuation. \n \nOn December 17, 2020, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System based on the experience study prepared for the five-year period ending June 30, 2019. Primary among the changes were the updates to rate of mortality, retirement, withdrawal, and salary increases. This also included a change to the long-term assumed investment rate of return of 7.00%. These assumption changes are reflected in the calculation of the June 30, 2021 Total Pension Liability. \nPublic School Employees Retirement System Changes of benefit terms: There have been no changes in benefit terms. \n \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 and withdrawal. The expectation of retired life mortality was changed to 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). \n \nA new funding policy was initially adopted by the Board on March 15, 2018, and most recently amended on December 17, 2020. 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 and further reduced from 7.40% to 7.30% for the June 30, 2018 actuarial valuation. \n \nOn December 17, 2020, the Board adopted recommended changes to the economic and demographic assumption utilized by the System based on the experience study prepared for the five-year period ending June 30, 2019. Primary among the changes were the updates to rates or mortality, retirement, disability, and withdrawal. This also included a change to the long-term assumed investment rate of return to 7.00%. These assumption changes are reflected in the calculation of the June 30, 2021 Total Pension Liability. \nSchool OPEB Fund Changes of benefit terms: There have been no changes in benefit terms. \n \nChanges in assumptions: June 30, 2020 valuation: Decremental assumptions were changed to reflect the Employees Retirement Systems experience study. Approximately 0.10% of employees are members of the Employees Retirement System. \n \nJune 30, 2019 valuation: Decremental assumptions were changed to reflect the Teachers Retirement Systems experience study. \n \nJune 30, 2018 valuation: The inflation assumption was lowered from 2.75% to 2.50%. \n \nJune 30, 2017 valuation: The participation assumption, tobacco use assumption and morbidity factors were revised. \n \nJune 30, 2015 valuation: Decremental and underlying inflation assumptions were changed to reflect to Retirement Systems' experience studies. \n \nJune 30, 2012 valuation: A data audit was performed and data collection procedures and assumptions were changed. \n \nThe discount rate was updated from 3.07% as of June 30, 2016 to 3.58% as of June 30, 2017, to 3.87% as of June 30, 2018, back to 3.58% of June 30, 2019, and to 2.22% as of June 30, 2020. \nSocial Security Replacement Plan Changes of benefit terms: There have been no changes in benefit terms that affected the measurement of the total pension liability since the prior measurement date. However, in 2021 the amounts reported as changes in assumptions resulted from an increase in the discount rate from 4.83% to 5.48% since the prior measurement date. \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 January 1, 2022. \n \nThe following actuarial methods and assumptions were used to determine the contractually required contributions for year ended June 30, 2022 reported in that schedule: \n \nValuation date Actuarial cost method Amortization method Remaining amortization Asset valuation Method \n \nJanuary 1, 2021 Entry Age Level percentage of payroll 17 years Method recognized a portion of the difference between the market value of assets and expected \n \nactuarial value of assets, based on the assumed \n \ninterest rate of return. The amount recognized \n \neach year is 20% of the difference between \n \nmarket value and expected actuarial value. \n \nInflation rate Salary increases Investment rate of return \n \n2.50% 3.00% per annum 7.00%, net of pension plan investment \n \n- 56 - \n \n POLK COUNTY SCHOOL DISTRICT GENERAL FUND \nSCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL \nYEAR ENDED JUNE 30, 2022 \n \nSCHEDULE \"12\" \n \nREVENUES Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous Total Revenues \nEXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Enterprise Operation Food Services Operation Capital Outlay Total Expenditures \nExcess of Revenues over (under) Expenditures \nOTHER FINANCING SOURCES (USES) Other Sources Other Uses Total Other Financing Sources (Uses) \nNet Change in Fund Balances \nFund Balances - Beginning \nFund Balances - Ending \n \nNONAPPROPRIATED BUDGETS \n \nORIGINAL (1) \n \nFINAL (1) \n \nACTUAL AMOUNTS \n \nVARIANCE OVER/UNDER \n \n$ \n \n15,135,000.00 $ \n \n15,135,000.00 $ \n \n17,160,531.89 $ \n \n2,025,531.89 \n \n200,000.00 \n \n200,000.00 \n \n387,685.54 \n \n187,685.54 \n \n54,402,693.00 \n \n54,431,977.00 \n \n59,124,015.69 \n \n4,692,038.69 \n \n31,941,108.41 \n \n40,632,457.54 \n \n27,030,124.13 \n \n(13,602,333.41) \n \n13,136.00 \n \n13,136.00 \n \n2,688,880.19 \n \n2,675,744.19 \n \n2,900.00 \n \n2,900.00 \n \n4,679.98 \n \n1,779.98 \n \n690,000.00 \n \n690,000.00 \n \n1,418,087.28 \n \n728,087.28 \n \n102,384,837.41 \n \n111,105,470.54 \n \n107,814,004.70 \n \n(3,291,465.84) \n \n74,467,331.80 \n3,586,630.29 2,606,623.71 1,157,016.71 1,004,850.84 5,008,480.56 1,278,143.82 7,941,675.85 3,785,249.65 \n366,113.03 42,603.00 - \n6,693,255.24 - \n107,937,974.50 (5,553,137.09) \n \n70,328,701.13 \n6,320,639.82 4,788,508.92 1,309,575.73 \n838,209.94 5,441,642.83 1,133,050.67 16,717,601.35 5,658,971.13 \n554,041.05 63,701.53 - \n7,121,528.27 1,446,324.00 121,722,496.37 (10,617,025.83) \n \n64,003,869.78 \n4,983,300.88 2,444,387.79 1,313,833.54 1,244,224.44 5,186,750.24 1,131,372.87 13,191,290.59 4,088,791.84 \n568,470.30 121,561.79 122,886.73 5,781,577.70 864,163.39 105,046,481.88 2,767,522.82 \n \n- \n \n371,333.34 \n \n- \n \n(350,000.00) \n \n(721,984.34) \n \n- \n \n(350,000.00) \n \n(350,651.00) \n \n- \n \n(5,903,137.09) \n \n(10,967,676.83) \n \n2,767,522.82 \n \n27,090,669.65 \n \n27,090,669.65 \n \n27,100,068.66 \n \n$ \n \n21,187,532.56 $ \n \n16,122,992.82 $ \n \n29,867,591.48 $ \n \n6,324,831.35 \n1,337,338.94 2,344,121.13 \n(4,257.81) (406,014.50) 254,892.59 \n1,677.80 3,526,310.76 1,570,179.29 \n(14,429.25) (57,860.26) (122,886.73) 1,339,950.57 582,160.61 16,676,014.49 13,384,548.65 \n(371,333.34) 721,984.34 350,651.00 \n13,735,199.65 \n9,399.01 \n13,744,598.66 \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 $2,659,956.84 and $2,281,597.36, 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- 57 - \n \n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \nYEAR ENDED JUNE 30, 2022 \n \nSCHEDULE \"13\" \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 COVID - National School Lunch Program Total U. S. Department of Agriculture \nEducation, U. S. Department of Education Stabilization Fund Pass-Through From Georgia Department of Education COVID-19 - Elementary and Secondary School Emergency Relief Fund COVID-19 - Elementary and Secondary School Emergency Relief Fund COVID-19 - American Rescue Plan Elementary and Secondary School Emergency Relief Fund COVID-19 - American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Homeless Children and Youth Total Education Stabilization Fund \nSpecial Education Cluster Pass-Through From Georgia Department of Education Special Education Grants to States Grants to States COVID-19 - American Rescue Plan - Grants to States Preschool Grants Preschool Grants COVID-19 - American Rescue Plan - Preschool Total 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 Rural Education Rural Education 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 Total Other Programs Total U. S. Department of Education \n \nASSISTANCE LISTING NUMBER \n \nPASSTHROUGH \nENTITY ID \nNUMBER \n \nEXPENDITURES IN PERIOD \n \n10.553 10.555 10.555 \n \n225GA324N1199 $ 225GA324N1199 225GA324N1099 \n \n1,729,257.26 2,770,338.87 \n371,055.56 4,870,651.69 \n \n84.425D 84.425D \n84.425U \n84.425W \n \nS425D200012 S425D210012 \nS425U210012 \nS425W210011 \n \n22,898.01 3,613,471.78 \n9,998,724.15 \n11,920.96 13,647,014.90 \n \n84.027A 84.027A 84.027X 84.173A 84.173A 84.173X \n \nH027A200073 H027A210073 H027X210073 H173A200081 H173A210081 H173X210081 \n \n84.048A 84.365A 84.365A 84.358B 84.358B 84.424A 84.367A 84.367A 84.010A 84.010A \n \nV048A210010 S365A200010 S365A210010 S358B200010 S358B210010 S424A200011 S367A200001 S367A210001 S010A200010-20A S010A210010-21A \n \n311,021.00 1,149,773.74 \n189,277.07 47,214.00 22,605.62 11,537.44 \n1,731,428.87 \n110,454.00 4,484.00 \n40,839.33 18,325.00 176,939.50 177,911.59 358,879.00 123,527.91 249,460.00 2,504,777.61 3,765,597.94 19,144,041.71 \n \n- 58 - \n \n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \nYEAR ENDED JUNE 30, 2022 \n \nSCHEDULE \"13\" \n \nFUNDING AGENCY PROGRAM/GRANT \nHealth and Human Services, U. S. Department of Pass-Through From Bright From the Start Georgia Department of Early Care and Learning Child Care and Development Block Grant \nFederal Communications Commission, U.S. Direct COVID - Emergency Connectivity Fund Program \nTotal Expenditures of Federal Awards \n \nASSISTANCE LISTING NUMBER \n \nPASSTHROUGH \nENTITY ID \nNUMBER \n \nEXPENDITURES IN PERIOD \n \n93.575 32.009 \n \n2210GACCC5 \n \n56,812.00 \n \n1,147,850.00 \n \n$ \n \n25,219,355.40 \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 Polk County School District (the \"Board\") under programs of the federal government for the year ended June 30, 2022. 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. \nNote 3. Indirect Cost Rate \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- 59 - \n \n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF STATE REVENUE \nYEAR ENDED JUNE 30, 2022 \nAGENCY/FUNDING GRANTS Bright From the Start: Georgia Department of Early Care and Learning Pre-Kindergarten Program Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Program Upper 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) Spec Ed. Supplemental Speech 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 One Time QBE Adjustment Amended Formula Adjustment Categorical Grants Pupil Transportation Regular Nursing Services Education Equalization Funding Grant Other State Programs Agriculture Construction Related Equipment - State Bonds Food Services Hygiene Products Preschool Disability Services Residential Treatment Centers Grant Teachers Retirement Vocational Education Vocational Supervisors Governor's Office of Planning and Budget Public Safety Officials and First Responders Grant Office of the State Treasurer Public School Employees Retirement CONTRACT Human Resources, Georgia Department of Family Connections \nSee notes to the basic financial statements. \n \nSCHEDULE \"14\" \n \nGOVERNMENTAL FUND TYPE \nGENERAL FUND \n \n$ \n \n1,293,532.42 \n \n2,895,721.00 325,030.00 \n6,473,197.00 727,213.00 \n3,174,082.00 501,717.00 \n5,849,820.00 4,848,422.00 2,125,310.00 7,577,704.00 1,267,301.00 \n592,051.00 427,382.00 1,286,288.00 62,894.00 993,486.00 309,245.00 170,871.00 \n3,288.00 \n1,137,067.00 2,031,650.00 2,055,688.00 1,548,612.00 \n278,188.00 \n \n812,673.85 158,549.00 8,793,135.00 \n36,000.00 261,752.00 \n1,250.61 227,808.26 462,800.00 39,188.59 179,627.00 23,340.00 \n11,159.50 \n103,068.00 \n \n57,904.46 \n \n$ \n \n59,124,015.69 \n \n- 60 - \n \n (This page left intentionally blank) \n \n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \nYEAR ENDED JUNE 30, 2022 \n \nSCHEDULE \"15\" \n \nPROJECT SPLOST V Construction, remodeling, improving, and equipping of existing facilities including Cedartown High School, Rockmart High School, Westside Elementary School and Eastside Elementary School. \nSPLOST VI For the purposes acquiring, constructing, and equipping the following capital projects: Elementary school classroom additions and related facilities, roofing and air conditioning HVAC improvements, track resurfacing at Rockmart and Cedartown High Schools, gym renovations at Rockmart High School, parking lots and access roads, equipment and furnishings, technology devices, and physical education and athletic equipment; System-wide instructional and administrative technology/infrastructure; Cedartown High School Fine Arts building with the expansion of and improvements to band and drama facilities, college and career facilities, and expansions to administrative offices; Rockmart High agriculture barn/learning center and college and career facilities; System-wide safety and security systems and equipment; Press box at Rockmart High School; Concession Stand-Rockmart High School/ Rockmart Middle; Purchasing school buses; Rockmart Middle School field house; Purchasing vocational, fine arts and cafeteria equipment; Purchasing textbooks; Acquiring real and personal property necessary or to be used for the foregoing purposes; and All other general purposes related to these capital outlay projects; and 2017 bond issuance costs. \nTotal SPLOST VI \nSPLOST VII Constructing, remodeling, improving, and equipping of existing facilities, including a fine arts building and new turf for athletic fields at Rockmart High School, an auxiliary gym and new turf for athletic fields at Cedartown High School, and system-wide roofing, HVAC, bathrooms, and classroom upgrades and improvements; instructional and administrative technology; system-wide safety and security systems and equipment; purchasing school buses, transportation, and maintenance vehicles and equipment; purchasing vocational, fine arts, cafeteria, physical education, and athletic equipment; purchasing textbooks and e-books; and acquiring real and personal property necessary or to be used for the foregoing purposes and all other general purposes related to these capital outlay projects and for expansion of facilities. \nTotal \n \nORIGINAL ESTIMATED \nCOST (1) \n \nCURRENT ESTIMATED COSTS (2) \n \nESTIMATED COMPLETION \nDATE \n \n$ \n \n300,000.00 $ \n \n5,812,606.39 \n \n6/30/2023 \n \n11,644,647.02 1,750,000.00 \n6,850,682.01 1,276,159.00 \n284,750.00 480,000.00 274,002.00 889,000.00 \n- \n301,142.00 925,008.00 324,609.97 25,000,000.00 \n \n5,431,103.82 985,698.38 \n8,987,577.43 1,297,842.65 \n320,789.48 444,547.00 \n33,741.36 760,661.00 198,749.99 \n- \n368,746.78 1,396,239.42 \n328,909.97 20,554,607.28 \n \n6/30/2026 6/30/2026 \nComplete Complete 6/30/2023 Complete Complete 6/30/2024 Complete \nComplete 6/30/2023 6/30/2026 \n \n25,000,000.00 \n \n$ \n \n50,300,000.00 $ \n \n24,725,048.09 51,092,261.76 \n \n6/30/2031 \n \n- 62 - \n \n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \nYEAR ENDED JUNE 30, 2022 \n \nSCHEDULE \"15\" \n \nPROJECT \n \nSPLOST V \n \nConstruction, remodeling, improving, and equipping of existing facilities including \n \nCedartown High School, Rockmart High School, Westside Elementary School and \n \nEastside Elementary School. \n \n$ \n \nAMOUNT EXPENDED IN CURRENT YEAR (3) (4) \n1,904,220.78 $ \n \nAMOUNT EXPENDED IN PRIOR YEARS (3) (4) \n3,908,385.61 $ \n \nTOTAL COMPLETION \nCOST \n- \n \nEXCESS PROCEEDS NOT \nEXPENDED \n \n$ \n \n- \n \nSPLOST VI \n \nFor the purposes acquiring, constructing, and equipping the following capital \n \nprojects: \n \nElementary school classroom additions and related facilities, roofing and air \n \nconditioning HVAC improvements, track resurfacing at Rockmart and Cedartown \n \nHigh Schools, gym renovations at Rockmart High School, parking lots and access \n \nroads, equipment and furnishings, technology devices, and physical education \n \nand athletic equipment; \n \n1,255,369.49 \n \n4,175,734.33 \n \n- \n \n- \n \nSystem-wide instructional and administrative technology/infrastructure; \n \n- \n \n985,698.38 \n \n- \n \n- \n \nCedartown High School Fine Arts building with the expansion of and \n \nimprovements to band and drama facilities, college and career facilities, and \n \nexpansions to administrative offices; \n \n- \n \n8,987,577.43 \n \n8,987,577.43 \n \n- \n \nRockmart High agriculture barn/learning center and college and career facilities; \n \n- \n \n1,297,842.65 \n \n1,297,842.65 \n \n- \n \nSystem-wide safety and security systems and equipment; \n \n- \n \n320,789.48 \n \n- \n \n- \n \nPress box at Rockmart High School; \n \n- \n \n444,547.00 \n \n444,547.00 \n \n- \n \nConcession Stand-Rockmart High School/ Rockmart Middle; \n \n- \n \n33,741.36 \n \n33,741.36 \n \n- \n \nPurchasing school buses; \n \n177,800.00 \n \n533,400.00 \n \n- \n \n- \n \nRockmart Middle School field house; \n \n- \n \n198,749.99 \n \n198,749.99 \n \n- \n \nPurchasing vocational, fine arts and cafeteria equipment; \n \n- \n \n- \n \n- \n \n- \n \nPurchasing textbooks; \n \n- \n \n- \n \n- \n \n- \n \nAcquiring real and personal property necessary or to be used for the foregoing \n \npurposes; and \n \n- \n \n368,746.78 \n \n368,746.78 \n \n- \n \nAll other general purposes related to these capital outlay projects; and 2017 \n \n623,811.00 \n \n772,428.42 \n \n- \n \n- \n \nbond issuance costs. \n \n1,075.00 \n \n327,834.97 \n \n- \n \n- \n \nTotal SPLOST VI \n \n2,058,055.49 \n \n18,447,090.79 \n \n11,331,205.21 \n \n- \n \nSPLOST VII \n \nConstructing, remodeling, improving, and equipping of existing facilities, \n \nincluding a fine arts building and new turf for athletic fields at Rockmart High \n \nSchool, an auxiliary gym and new turf for athletic fields at Cedartown High \n \nSchool, and system-wide roofing, HVAC, bathrooms, and classroom upgrades \n \nand improvements; instructional and administrative technology; system-wide \n \nsafety and security systems and equipment; purchasing school buses, \n \ntransportation, and maintenance vehicles and equipment; purchasing \n \nvocational, fine arts, cafeteria, physical education, and athletic equipment; \n \npurchasing textbooks and e-books; and acquiring real and personal property \n \nnecessary or to be used for the foregoing purposes and all other general \n \npurposes related to these capital outlay projects and for expansion of facilities. \n \n1,283,544.79 \n \n- \n \n- \n \n- \n \nTotal \n \n$ \n \n5,245,821.06 $ 22,355,476.40 $ 11,331,205.21 $ \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. (2) The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion. (3) The voters of Polk County approved the imposition of a 1% sales tax to fund the above projects and retire associated debt. \nAmounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the projects. (4) In addition to the expenditures shown above, the School District has incurred interest to provide advance funding as follows: \n \nPrior Years Current Year \n \n$ \n \n5,033,445.00 \n \n833,250.00 \n \nTotal \n \n$ \n \n5,866,695.00 \n \nSee notes to the basic financial statements. \n \n- 63 - \n \n Section II Compliance and Internal Control Reports \n \n Greg S. Griffin State Auditor \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 \nACCORDANCE WITH GOVERNMENT AUDITING STANDARDS \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 Dr. Katherine Thomas, Superintendent and Members of the Polk County School District \nWe have audited the financial statements of the governmental activities, each major fund, and fiduciary activities of the Polk County School District (School District) as of and for the year ended June 30, 2022, 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 May 26, 2023. We conducted our audit in accordance with the auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. \nReport on Internal 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) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the basic 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 a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the School District'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. Given these limitations, during our audit we did not identify any \n270 Washington Street, SW, Suite 4-101 Atlanta, Georgia 30334 | Phone (404) 656-2180 \n \n 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 in finding FS 2022-001 that we consider to be a significant deficiency. \nReport on 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 financial statements. 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 \nGovernment Auditing Standards requires the auditor to perform limited procedures on the School District's response to the finding identified in our audit and described in the accompanying Schedule of Findings and Questioned Costs. The School District's response was not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response. \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 \nMay 26, 2023 \n \n Greg S. Griffin State Auditor \nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE \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 Dr. Katherine Thomas, Superintendent and Members of the Polk County School District \nReport on Compliance for Each Major Federal Program \nOpinion on Each Major Federal Program \nWe have audited the Polk County School District's (School District) compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the School District's major federal programs for the year ended June 30, 2022. 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. \nIn our opinion, the School District 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, 2022. \nBasis for Opinion on Each Major Federal Program \nWe conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); 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). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor's Responsibilities for the Audit of Compliance section of our report. \nWe are required to be independent of the School District and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the School District's compliance with the compliance requirements referred to above. \n270 Washington Street, SW, Suite 4-101 Atlanta, Georgia 30334 | Phone (404) 656-2180 \n \n Responsibilities of Management for Compliance \nManagement is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules and provisions of contracts or grant agreements applicable to the School District's federal programs. \nAuditor's Responsibilities for the Audit of Compliance \nOur objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the School District's compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material, if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the School District's compliance with the requirements of each major federal program as a whole. \nIn performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance, we: \n Exercise professional judgment and maintain professional skepticism throughout the audit. \n Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the School District's compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. \n Obtain an understanding of the School District's internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances 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 the School District's internal control over compliance. Accordingly, no such opinion is expressed. \nWe are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit. \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 in finding FA 2022-001. Our opinion on each major federal program is not modified with respect to this matter. \n \n Government Auditing Standards requires the auditor to perform limited procedures on the School District's response to the noncompliance finding identified in our compliance audit and described in the accompanying Schedule of Findings and Questioned Costs. The School District's response was not subjected to the other auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. \nReport on Internal Control over Compliance \nOur consideration of internal control over compliance was for the limited purpose described in the Auditor's Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as discussed below, we did identify a certain deficiency in internal control over compliance that we consider to be a significant deficiency. \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 a 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. We consider the deficiency in internal control over compliance described in the accompanying Schedule of Findings and Questioned Costs in finding FA 2022-001 to be a significant deficiency. \nOur audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed. \nGovernment Auditing Standards requires the auditor to perform limited procedures on the School District's response to the internal control over compliance finding identified in our audit and described in the accompanying Schedule of Findings and Questioned Costs. The School District's response was not subjected to the other 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 \nMay 26, 2023 \n \n Section III Auditee's Response to Prior Year Findings and Questioned Costs \n \n POLK COUNTY SCHOOL DISTRICT AUDITEE'S RESPONSE \nSUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS YEAR ENDED JUNE 30, 2022 \nPRIOR YEAR FINANCIAL STATEMENT FINDINGS \nNo matters were reported. \nPRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \nNo matters were reported. \n \n Section IV Findings and Questioned Costs \n \n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2022 \n \nI SUMMARY OF AUDITOR'S RESULTS \n \nFinancial Statements \n \nType of auditor's report issued: Governmental Activities, Each Major Fund, and Fiduciary Activities \nInternal control over financial reporting:  Material weakness(es) identified?  Significant deficiency(ies) identified? \nNoncompliance material to financial statements noted: \nFederal Awards \n \nInternal control over major programs:  Material weakness(es) identified?  Significant deficiency(ies) 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 2 CFR 200.516(a)? \n \nIdentification of major programs: \n \nAssistance Listing Numbers Assistance Listing Program or Cluster Title \n \n32.009 84.425 \n \nEmergency Connectivity Fund Education Stabilization Fund \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$756,580.66 No \n \n- 1 - \n \n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2022 \n \nII FINANCIAL STATEMENT FINDINGS \n \nFS 2022-001 Control Category: Internal Control Impact: Compliance Impact: \n \nInternal Controls over Financial Reporting Financial Reporting Significant Deficiency None \n \nDescription: The School District did not have adequate internal controls in place over the financial statement reporting process. The original financial statements, as presented for audit, contained significant errors. \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). \nGASB Statement No. 34, Basic Financial Statements  And 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. \nChapter II  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: Significant errors were noted in the School District's financial statements presented for audit. The School District understated accounts receivable and revenue in the amount of $337,570 in the fiduciary fund. This misstatement was a result of the School District's failure to properly review the financial statements prior to submission. An adjustment was proposed by the auditor and accepted by the School District to correct these errors. \nCause: This issue was a result of the School District's inadequate controls and review procedures over the financial statements. \nEffect: A significant misstatement was 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. \n \n- 2 - \n \n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2022 \n \nRecommendation: The School District should strengthen the internal controls and review procedures over the financial process to ensure that the financial statements presented for audit are complete and accurate. These procedures should be performed by a properly trained individual possessing a thorough understanding of the applicable GAAP statements, the applicable GASB pronouncements, and the School District's 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: We concur with this finding. \n \nIll FEDERAL AWARD FINDINGS AND QUESTIONED COSTS FA 2022-001 Strengthen Controls over Expenditures \n \nCompliance Requirements: \nInternal Control Impact: Compliance Impact: Federal Awarding Agency: Pass-Through Entity: AL Numbers and Titles: \nFederal Award Numbers: Questioned Costs: \n \nActivities Allowed or Unallowed Allowable Costs/Cost Principles Procurement and Suspension and Debarment Significant Deficiency Nonmaterial Noncompliance U.S. Department of Education Georgia Department of Education COVID-19  84.425D  Elementary and Secondary School Emergency Relief Fund COVID-19  84.425U  American Rescue Plan Elementary and Secondary School Emergency Relief Fund COVID-19  84.425W  American Rescue Plan Elementary and Secondary School Emergency Relief Fund S425D200012 (Year: 2020), S425D210012 (Year: 2021), S425U210012 (Year: 2021), S425W210011 (Year: 2021) $99,748 \n \nDescription: \nThe policies and procedures of the School District were insufficient to provide adequate internal controls over expenditures as it relates to the Elementary and Secondary School Emergency Relief Fund program. \n \nBackground: \nOn March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. \n \n- 3 - \n \n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2022 \nProvisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to the coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. \nESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $13,647,015 were expended and reported on the Polk County School District's Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. \nCriteria: As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303  Internal Controls. \nProvisions included in the Uniform Guidance, Section 200.403  Factors Affecting Allowability of Costs state that \"costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity... (g) Be adequately documented...\" \nIn addition, provisions included in the Uniform Guidance, Section 202.403  Reasonable Costs state that \"a cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non-Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: (a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award. (b) The restraints or requirements imposed by such factors as: sound business practices; arm's-length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award... (d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government. (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award's cost.\" \nFurthermore, provisions included in the Uniform Guidance, Section 200.318  General Procurement Standards state that \"the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations... for the acquisition of property or services required under a Federal award or subaward...\" \n- 4 - \n \n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS \nYEAR ENDED JUNE 30, 2022 \nCondition: Auditors performed a review of expenditure activity associated with the ESSER program to determine if appropriate internal controls were implemented and applicable compliance requirements were met. This testing revealed the following deficiencies: \n Bonuses totaling $37,327 were paid to individuals who were not employees of the School District. These individuals were hired to perform specific functions as detailed within the associated contracts and were paid amounts in excess of the stated rate noted within these contracts. \n A payment in the amount of $62,421 was made to the janitorial company utilized by the School District to provide bonuses to janitorial contractors who were not employees of the School District. These individuals were assigned to work within the School District by the private janitorial company. Per review of the contract in place during the fiscal year under review, it was noted that these bonuses represented amounts in excess of the agreed upon price. \nTherefore, expenditures totaling $99,748 were not considered to be reasonable and necessary for the performance of the ESSER program and deemed unallowable. \nQuestioned Costs: Known questioned costs of $99,748 were identified for expenditures that were not incurred for a necessary and reasonable purpose and did not follow the School District's policies and procedures. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. \nCause: Per discussion with management, the School District believed that the expenditures were allowable as the expenditures were approved by GaDOE through the Consolidated Application process; however, they were not aware that contract amendments should be initiated prior to the expenditure of funds in this manner. \nEffect or Potential Effect: The School District is not in compliance with the Uniform Guidance, ED, or GaDOE guidance related to the ESSER program. Failure to ensure that appropriate policies and procedures are followed when expending federal funds may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable expenditures. \nRecommendation: The School District should review current internal control procedures related to ESSER program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that expenditures are in line with provisions reflected within the associated contract and/or contract amendments. In addition, the School District should implement a monitoring process to ensure that all expenditures are compliant with the School District's purchasing and employee compensation policies and procedures. \nViews of Responsible Officials: We concur with this finding. \n- 5 - \n \n Section V Management's Corrective Action \n \n   "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-be26-bp7-b2021-belec-p-btext","title":"Polk School District, Cedartown, Georgia, annual financial report for the fiscal year ended 2021 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":["2022-08-23"],"dcterms_description":["Annual financial report for the Polk 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":["Polk School District (Ga.)--Appropriations and expenditures--Periodicals.","Education--Georgia--Polk County--Auditing--Periodicals.","Education--Georgia--Polk County--Finance--Statistics--Periodicals.","Georgia Government Documents--Serial"],"dcterms_title":["Polk School District, Cedartown, Georgia, annual financial report for the fiscal year ended 2021 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-bp7-b2021-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-be26-bp7-b2021-belec-p-btext"],"dcterms_temporal":null,"dcterms_rights_holder":null,"dcterms_bibliographic_citation":null,"dlg_local_right":null,"dcterms_medium":["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":"POLK SCHOOL DISTRICT CEDARTOWN, GEORGIA \r\nANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED \r\nJUNE 30, 2021 (Including Independent Auditor's Reports) \r\n \r\n Polk County School District \r\n \r\nTable of Contents \r\n \r\nSection I \r\n \r\nFinancial \r\n \r\nIndependent Auditor's Report \r\n \r\nRequired Supplementary Information \r\n \r\nManagement's Discussion and Analysis \r\n \r\ni \r\n \r\nExhibits \r\n \r\nBasic Financial Statements \r\n \r\nGovernment-Wide Financial Statements \r\n \r\nA \r\n \r\nStatement of Net Position \r\n \r\n1 \r\n \r\nB \r\n \r\nStatement of Activities \r\n \r\n2 \r\n \r\nFund Financial Statements \r\n \r\nC \r\n \r\nBalance Sheet \r\n \r\nGovernmental Funds \r\n \r\n3 \r\n \r\nD \r\n \r\nReconciliation of the Governmental Funds Balance Sheet \r\n \r\nto the Statement of Net Position \r\n \r\n4 \r\n \r\nE \r\n \r\nStatement of Revenues, Expenditures and Changes in Fund \r\n \r\nBalances \r\n \r\nGovernmental Funds \r\n \r\n5 \r\n \r\nF \r\n \r\nReconciliation of the Governmental Funds Statement of \r\n \r\nRevenues, Expenditures and Changes in Fund Balances \r\n \r\nto the Statement of Activities \r\n \r\n6 \r\n \r\nG \r\n \r\nStatement of Fiduciary Net Position \r\n \r\nFiduciary Funds \r\n \r\n7 \r\n \r\nH \r\n \r\nStatement of Changes in Fiduciary Net Position \r\n \r\nFiduciary Funds \r\n \r\n8 \r\n \r\nI Notes to the Basic Financial Statements \r\n \r\n9 \r\n \r\nSchedules \r\n \r\nRequired Supplementary Information \r\n \r\n1 Schedule of Proportionate Share of the Net Pension Liability \r\n \r\nTeachers Retirement System of Georgia \r\n \r\n45 \r\n \r\n2 Schedule of Contributions  Teachers Retirement System of Georgia \r\n \r\n46 \r\n \r\n3 Schedule of Proportionate Share of the Net Pension Liability \r\n \r\nEmployees' Retirement System of Georgia \r\n \r\n47 \r\n \r\n Polk County School District Table of Contents Section I \r\n \r\nSchedules \r\n \r\nRequired Supplementary Information \r\n \r\n4 Schedule of Contributions  Employees' Retirement System of Georgia \r\n \r\n48 \r\n \r\n5 Schedule of Proportionate Share of the Net Pension Liability Public \r\n \r\nSchool Employees Retirement System of Georgia \r\n \r\n49 \r\n \r\n6 Schedule of Proportionate Share of the Net OPEB Liability \r\n \r\nSchool OPEB Fund \r\n \r\n50 \r\n \r\n7 Schedule of Contributions  School OPEB Fund \r\n \r\n51 \r\n \r\n8 Schedule of Changes in the Net Pension Liability and Related Ratios \r\n \r\nSocial Security Replacement Plan \r\n \r\n52 \r\n \r\n9 Schedule of Contributions  Social Security Replacement Plan \r\n \r\n54 \r\n \r\n10 Schedule of Investment Returns  Social Security Replacement Plan \r\n \r\n55 \r\n \r\n11 Notes to the Required Supplementary Information \r\n \r\n56 \r\n \r\n12 Schedule of Revenues, Expenditures and Changes in Fund \r\n \r\nBalances - Budget and Actual General Fund \r\n \r\n58 \r\n \r\nSupplementary Information \r\n \r\n13 Schedule of Expenditures of Federal Awards \r\n \r\n59 \r\n \r\n14 Schedule of State Revenue \r\n \r\n61 \r\n \r\n15 Schedule of Approved Local Option Sales Tax Projects \r\n \r\n62 \r\n \r\nSection II \r\n \r\nCompliance and Internal Control Reports \r\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 \r\nIndependent Auditor's Report on Compliance for Each Major Federal Program and on Internal Control Over Compliance Required by the Uniform Guidance \r\n \r\nSection III \r\n \r\nAuditee's Response to Prior Year Findings and Questioned Costs Summary Schedule of Prior Year Findings \r\n \r\n Polk County School District Table of Contents Section IV Findings and Questioned Costs Schedule of Findings and Questioned Costs \r\n \r\n Section I Financial \r\n \r\n Greg S. Griffin State Auditor \r\nINDEPENDENT AUDITOR'S REPORT \r\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 \r\nand Dr. Katherine Thomas, Superintendent and Members of the Polk County School District \r\nReport on the Financial Statements \r\nWe have audited the accompanying financial statements of the governmental activities, each major fund, and fiduciary activities of the Polk County School District (School District), as of and for the year ended June 30, 2021, 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. \r\nManagement's Responsibility for the Financial Statements \r\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. \r\nAuditor's Responsibility \r\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. \r\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 School District'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 School District'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. \r\n270 Washington Street, SW, Suite 4-101 Atlanta, Georgia 30334 | Phone (404) 656-2180 \r\n \r\n We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. \r\nOpinions \r\nIn our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and fiduciary activities of the School District as of June 30, 2021, 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. \r\nOther Matters \r\nRequired Supplementary Information \r\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. \r\nOther Information \r\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. \r\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 taken as a whole. \r\n \r\n Other Reporting Required by Government Auditing Standards \r\nIn accordance with Government Auditing Standards, we have also issued our report dated August 23, 2022 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. \r\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. \r\nRespectfully submitted, \r\nGreg S. Griffin State Auditor \r\nAugust 23, 2022 \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR \r\nENDED JUNE 30, 2021 \r\nINTRODUCTION \r\nThe intent of this discussion and analysis is to look at the Polk County School District's (School District) financial performance as a whole. The reader should review the notes to the basic financial statements and the financial statements to enhance their understanding of the School District's financial performance. The School District's financial statements for the fiscal year ended June 30, 2021 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 Position 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. The fund financial statements provide information about all of the School District's funds. \r\nFINANCIAL HIGHLIGHTS \r\nKey financial highlights for fiscal year 2021 are as follows: \r\nOn the government-wide financial statements: \r\n Government-wide net position at June 30, 2021 was approximately ($2.4) million. Net position reflects the difference between all non-fiduciary assets of the School District including capital assets, net of depreciation, deferred outflows and all liabilities, both short-term and long-term, and deferred inflows. The net position at June 30, 2021 of ($2.4) million represented an increase of approximately $2.1 million when compared to the prior year. This increase is due to overall decrease in liabilities and an increase in capital assets. The School District has completed constructing a fine arts building. \r\n The School District had $95.6 million in expenses relating to governmental activities; only $64.3 million of these expenses were offset by program specific charges for services, operating and capital grants and contributions. However, the general revenues (primarily property and sales taxes) of approximately $33.5 million provided additional funding of these expenses. \r\n As stated above, general revenues accounted for $33.5 million or about 34% of all revenues totaling approximately $97.8 million. Program specific revenues in the form of charges for services, operating and capital grants and contributions accounted for the balance of these revenues. \r\n \r\nSource of Revenues \r\n \r\nGeneral Revenue- Equalization 8% \r\nGeneral Revenue- Sales Taxes 7% \r\n \r\nGeneral Revenue- All \r\nOther 1% \r\n \r\nGeneral Revenue- Property Taxes 18% \r\n \r\nProgram Revenues 66% \r\n \r\ni \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR \r\nENDED JUNE 30, 2021 \r\nOn the fund financial statements: \r\n Among major funds, the general fund had approximately $90.9 million in revenues and $87.8 million in expenditures. The general fund balance of approximately $27.1 million at June 30, 2021 increased by approximately $3.2 million from the prior year. \r\nOVERVIEW OF THE FINANCIAL STATEMENTS \r\nThese financial statements consist of three parts: management's discussion and analysis (this section), the basic financial statements, including notes to the 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. \r\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 School District's overall financial status. \r\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 School District, the general fund, capital projects fund, and debt service fund are all considered to be major funds. The School District has no non-major funds as defined by GASB Statement No. 34 for purposes of this report. \r\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. \r\nGovernment-Wide Statements \r\nSince the School District has no operations that have been classified as \"Business Activities\", the government-wide financial statements are basically a consolidation of the entire School District's operating funds into one column called governmental activities. In reviewing the government-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 School District's non-fiduciary assets, deferred outflows, liabilities, and deferred inflows which uses the accrual basis of accounting similar to the accounting used by most private-sector companies. This basis of accounting takes into accounts all of the current year's revenues and expenses regardless of when cash is received or paid. \r\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. \r\nii \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2021 \r\nWhen analyzing government-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: \r\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 \r\naccrual basis of accounting  Allocate net position as follows: \r\no Net Investment in Capital Assets o Restricted net position is that with constraints placed on the use by external sources \r\nsuch as creditors, grantors, contributors or laws and regulations. o Unrestricted net position is net position that does not meet any of the above \r\nrestrictions. \r\nFund Financial Statements \r\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 non-major funds as defined by generally accepted accounting principles. \r\nThe School District has two kinds of funds as discussed below: \r\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 governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds are reconciled in the financial statements. \r\nFiduciary Funds  The School District is the trustee, or fiduciary, for assets that belong to clubs, organizations and others within the principals' accounts as well as an employer sponsored pension plan. 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 government-wide financial statements because it cannot use these assets to finance its operations. \r\nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT AS A WHOLE \r\nNet position, which is the difference between total assets, deferred outflows of resources, total liabilities and deferred inflows of resources, is one indicator of the financial condition of the School 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 decreases in the School District's net position as measured in the Statement of Activities \r\niii \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2021 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 non-financial factors should be considered in assessing the overall health of the School District. The School District had approximately $87.9 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 position, it must be recognized that this portion of the net position is not available for future spending. The deficit balance of unrestricted net position of approximately $103.0 million reflects the net pension liability adjustments as required by GASB Statement No. 68 and GASB Statement No. 71 and the OPEB liability adjustments as required by GASB Statement No. 75. \r\niv \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2021 \r\n \r\nTable 1 provides a summary of the School District's net position for this fiscal year as compared to the prior year. \r\n \r\nTable 1 Net Position \r\n \r\nGovernmental Activities \r\n \r\nFiscal Year \r\n \r\nFiscal Year \r\n \r\n2021 \r\n \r\n2020 \r\n \r\nAssets Current and Other Assets Capital Assets, Net \r\n \r\n$ 48,014,370 $ 45,291,514 \r\n \r\n104,333,621 \r\n \r\n103,458,205 \r\n \r\nTotal Assets \r\n \r\n152,347,991 \r\n \r\n148,749,719 \r\n \r\nDeferred Outflows of Resources Related Defined Benefits Pension Plans Related OPEB Plan \r\n \r\n23,954,465 11,673,846 \r\n \r\n20,525,982 3,110,566 \r\n \r\nTotal Deferred Outflows \r\n \r\n35,628,311 \r\n \r\n23,636,548 \r\n \r\nLiabilities Current and Other Liabilities Long-Term Liabilities Net Pension Liability Net OPEB Liability \r\n \r\n11,120,899 22,083,856 83,796,704 58,031,576 \r\n \r\n11,158,005 25,385,817 73,471,420 48,079,689 \r\n \r\nTotal Liabilities \r\n \r\n175,033,035 \r\n \r\n158,094,931 \r\n \r\nDeferred Inflows of Resources Related Defined Benefits Pension Plans Related OPEB Plan \r\n \r\n2,248,386 13,079,497 \r\n \r\n4,758,965 14,063,641 \r\n \r\nTotal Deferred Inflows \r\n \r\n15,327,883 \r\n \r\n18,822,606 \r\n \r\nNet Position Net Investment in Capital Assets Restricted Unrestricted (Deficit) \r\n \r\n87,925,017 12,676,924 (102,986,557) \r\n \r\n84,470,128 10,045,718 (99,047,116) \r\n \r\nTotal Net Position \r\n \r\n$ \r\n \r\n(2,384,616) $ \r\n \r\n(4,531,270) \r\n \r\nv \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2021 \r\n \r\nTotal net position increased by approximately $2.1 million in fiscal year 2021 from the prior year. This change in net position is detailed in Table 2 below. Table 2 also shows the change in net position as compared to the prior fiscal year. \r\n \r\nTable 2 Change in Net Position \r\nRevenues Program Revenues: Charges for Services Operating Grants and Contributions Capital Grants and Contributions \r\nTotal Program Revenues \r\nGeneral Revenues: Taxes Property Taxes For Maintenance and Operations Other Taxes Sales Taxes Special Purpose Local Option Sales Tax - Other Taxes For Debt Services Other Sales Tax Grant and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous \r\nSpecial Item Donation - Land Donation - Paving Labor and Equipment Cost \r\n \r\nGovernmental Activities \r\n \r\nFiscal Year \r\n \r\nFiscal Year \r\n \r\n2021 \r\n \r\n2020 \r\n \r\n$ 1,776,872 $ 61,405,531 1,095,530 \r\n \r\n2,150,761 58,772,928 \r\n1,249,268 \r\n \r\n64,277,933 \r\n \r\n62,172,957 \r\n \r\n17,338,022 60,718 \r\n \r\n17,044,897 64,504 \r\n \r\n6,375,615 339,373 \r\n7,851,861 78,609 \r\n1,432,807 \r\n38,070 \r\n \r\n6,220,591 258,512 \r\n7,954,400 330,691 \r\n1,044,866 \r\n50,000 - \r\n \r\nTotal General Revenues and Special Item \r\nTotal Revenues and Special Item \r\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 Long-Term Debt \r\nTotal Expenses \r\nIncrease in Net Position \r\n \r\n33,515,075 97,793,008 \r\n \r\n32,968,461 95,141,418 \r\n \r\n65,694,333 \r\n \r\n58,544,312 \r\n \r\n3,931,760 1,480,517 1,319,190 1,200,815 5,020,228 1,090,677 7,101,774 3,009,554 \r\n205,646 103,096 \r\n \r\n3,729,124 1,313,844 1,246,683 1,031,230 4,679,716 \r\n902,985 7,312,839 3,337,804 \r\n206,623 65,796 \r\n \r\n94,606 4,981,987 \r\n412,171 \r\n \r\n40,935 4,657,480 \r\n541,976 \r\n \r\n95,646,354 \r\n \r\n87,611,347 \r\n \r\n$ 2,146,654 $ 7,530,071 \r\n \r\nvi \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2021 \r\n \r\nCost of Providing Services \r\n \r\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. \r\n \r\nTable 3 Governmental Activities \r\n \r\nTotal Cost of Services \r\n \r\nFiscal Year \r\n \r\nFiscal Year \r\n \r\n2021 \r\n \r\n2020 \r\n \r\nNet Cost of Services \r\n \r\nFiscal Year \r\n \r\nFiscal Year \r\n \r\n2021 \r\n \r\n2020 \r\n \r\nInstruction Support Services \r\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 Long-Term Debt \r\n \r\n$ 65,694,333 $ 58,544,312 $ 21,010,077 $ 14,351,323 \r\n \r\n3,931,760 1,480,517 1,319,190 1,200,815 5,020,228 1,090,677 7,101,774 3,009,554 \r\n205,646 103,096 \r\n \r\n3,729,124 1,313,844 1,246,683 1,031,230 4,679,716 \r\n902,985 7,312,839 3,337,804 \r\n206,623 65,796 \r\n \r\n982,611 726,044 231,246 (147,139) 2,551,718 1,073,546 4,509,759 1,311,161 202,755 \r\n47,228 \r\n \r\n1,174,923 758,471 79,482 (812,358) \r\n2,251,170 892,711 \r\n4,363,598 2,070,384 \r\n204,447 61,181 \r\n \r\n94,606 4,981,987 \r\n412,171 \r\n \r\n40,935 4,657,480 \r\n541,976 \r\n \r\n94,516 (1,637,272) \r\n412,171 \r\n \r\n40,935 (539,853) 541,976 \r\n \r\nTotal Expenses \r\n \r\n$ 95,646,354 $ 87,611,347 $ 31,368,421 $ 25,438,390 \r\n \r\nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT'S FUNDS \r\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 and other financing sources of $102.2 million and total expenditures and other financing uses of $98.8 million in fiscal year 2021. Total governmental fund balances of approximately $36.2 million at June 30, 2021, increased approximately $3.5 million from the prior year. \r\nGeneral Fund Budget Highlights \r\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 2021, the School District amended its general fund budget as needed. \r\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. \r\nvii \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2021 \r\n \r\nFor the general fund, the final actual revenues of $90.9 million were less than the final budgeted amount of $96.0 million by $5.1 million. This can be attributed to receiving less federal funds than originally expected. \r\n \r\nThe general fund's final actual expenditures of $87.7 million were less than the final budget amount of $112.7 million by approximately $25.0 million. The School District believes it effectively managed its budget during the fiscal year. \r\n \r\nCAPITAL ASSETS AND DEBT ADMINISTRATION \r\n \r\nCapital Assets \r\n \r\nAt fiscal year ended June 30, 2021, the School District had $104.3 million invested in capital assets, net of accumulated depreciation, all in governmental activities. These assets are made up of a broad range of items including buildings and improvement, land, land improvements, food service, transportation and maintenance equipment. Table 4 reflects a summary of these balances, net of accumulated depreciation, as compared to the prior fiscal year. \r\n \r\nTable 4 Capital Assets (Net of Depreciation) \r\n \r\nGovernmental Activities \r\n \r\nFiscal Year \r\n \r\nFiscal Year \r\n \r\n2021 \r\n \r\n2020 \r\n \r\nLand Construction in Progress Building and Improvements Equipment Land Improvements \r\n \r\n$ 2,384,621 $ 2,384,621 \r\n \r\n1,505,066 \r\n \r\n9,937,408 \r\n \r\n96,988,939 \r\n \r\n88,278,133 \r\n \r\n1,776,631 \r\n \r\n1,496,818 \r\n \r\n1,678,364 \r\n \r\n1,361,225 \r\n \r\nTotal \r\n \r\n$ 104,333,621 $ 103,458,205 \r\n \r\nAdditional information about the School District's capital assets can be found in the Notes to the Basic Financial Statements. \r\n \r\nDebt Administration \r\n \r\nAt June 30, 2021, the School District had $20.1 million in bonds outstanding with $3.4 million due within one year and $337 thousand in capital leases with $165 thousand due within one year. \r\n \r\nTable 5 Debt at June 30 \r\n \r\nGovernmental Activities \r\n \r\nFiscal Year \r\n \r\nFiscal Year \r\n \r\n2021 \r\n \r\n2020 \r\n \r\nBond Debt Capital Leases \r\n \r\n$ 20,050,000 $ 22,655,000 \r\n \r\n336,607 \r\n \r\n495,868 \r\n \r\nTotal \r\n \r\n$ 20,386,607 $ 23,150,868 \r\n \r\nviii \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2021 Net Pension and OPEB Liabilities \r\nAt June 30, 2021, the School District reported liabilities for its proportionate share of the net pension and OPEB liabilities. Reporting these liabilities were required by GASB Statement No. 68, GASB Statement No. 71 and GASB Statement No. 75. \r\nFACTORS BEARING ON THE SCHOOL DISTRICT'S FUTURE Currently known circumstances that are expected to have a significant effect on financial position or results of operations in future years are as follows: \r\n The School District is financially stable. The School District's operating millage for 2020 was 15.664. It was rolled back in 2021 to 14.139. \r\n The general fund had a fund balance as of June 30, 2021, of $27.1 million which is up $3.2 million from prior year. \r\n The School District is scheduled to receive a $3,532,516 increase of state revenue for fiscal year 2022. The general fund is healthy enough to offset the payroll step increases. \r\n During the COVID-19 pandemic, the School District received CARES and ESSER monies to help with extra expenditures, staff retention, and new positions needed. \r\n The School District will continue to renovate the existing facilities to accommodate student growth as needed. The School District plans to fund additional capital outlays with the one percent local sales tax revenue, general obligation bonds, and state capital outlay grants. A fine arts building has been constructed at Cedartown High School. roofing, paving, and HVAC improvements have been made. Technology upgrades will continue to be made. Also, additions and modifications will be done as needed. \r\nCONTACTING THE SCHOOL DISTRICT'S FINANCIAL MANAGEMENT \r\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 Mrs. Tammy McDonald, Executive Finance Director, Polk County School District, 612 South College Street, Cedartown, Georgia 30125. You may also email your questions to Mrs. McDonald at tammy@polk.k12.ga.us. \r\nix \r\n \r\n Polk County School District \r\n \r\n POLK COUNTY SCHOOL DISTRICT STATEMENT OF NET POSITION JUNE 30, 2021 \r\nASSETS Cash and Cash Equivalents Investments Accounts Receivable, Net \r\nTaxes State Government Federal Government Other Inventories Restricted Assets Investments with Fiscal Agent or Trustee Capital Assets, Non-Depreciable Capital Assets, Depreciable (Net of Accumulated Depreciation) \r\nTotal Assets \r\nDEFERRED OUTFLOWS OF RESOURCES Related to Defined Benefit Pension Plans Related to OPEB Plan \r\nTotal Deferred Outflows of Resources \r\nLIABILITIES Accounts Payable Salaries and Benefits Payable Interest Payable Contracts Payable Retainages Payable Net Pension Liability Net OPEB Liability Long-Term Liabilities \r\nDue Within One Year Due in More Than One Year \r\nTotal Liabilities \r\nDEFERRED INFLOWS OF RESOURCES Related to Defined Benefit Pension Plans Related to OPEB Plan \r\nTotal Deferred Inflows of Resources \r\nNET POSITION Net Investment in Capital Assets Restricted for \r\nContinuation of Federal Programs Debt Service Capital Projects Unrestricted (Deficit) \r\nTotal Net Position \r\n \r\nEXHIBIT \"A\" \r\n \r\nGOVERNMENTAL ACTIVITIES \r\n \r\n$ \r\n \r\n34,909,118.24 \r\n \r\n10,000.00 \r\n \r\n2,455,287.26 6,745,682.19 1,675,267.69 \r\n170,048.40 134,761.59 \r\n \r\n1,914,205.21 3,889,686.73 100,443,934.05 152,347,991.36 \r\n \r\n23,954,464.99 11,673,846.00 35,628,310.99 \r\n \r\n861,887.32 9,579,706.03 \r\n277,750.00 370,501.84 \r\n31,053.97 83,796,704.00 58,031,576.00 \r\n3,898,510.92 18,185,345.44 175,033,035.52 \r\n \r\n2,248,386.00 13,079,497.00 15,327,883.00 \r\n \r\n87,925,017.04 \r\n \r\n4,478,881.80 5,061,498.94 3,136,542.71 (102,986,556.66) \r\n \r\n$ \r\n \r\n(2,384,616.17) \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 1 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT STATEMENT OF ACTIVITIES \r\nFOR THE YEAR ENDED JUNE 30, 2021 \r\n \r\nEXHIBIT \"B\" \r\n \r\nEXPENSES \r\n \r\nCHARGES FOR SERVICES \r\n \r\nPROGRAM REVENUES OPERATING GRANTS AND \r\nCONTRIBUTIONS \r\n \r\nCAPITAL GRANTS AND CONTRIBUTIONS \r\n \r\nNET (EXPENSES) REVENUES \r\nAND CHANGES IN NET POSITION \r\n \r\nGOVERNMENTAL ACTIVITIES \r\n \r\nInstruction \r\n \r\n$ \r\n \r\nSupport Services \r\n \r\nPupil Services \r\n \r\nImprovement of Instructional Services \r\n \r\nEducational Media Services \r\n \r\nGeneral Administration \r\n \r\nSchool Administration \r\n \r\nBusiness Administration \r\n \r\nMaintenance and Operation of Plant \r\n \r\nStudent Transportation Services \r\n \r\nCentral Support Services \r\n \r\nOther Support Services \r\n \r\nOperations of Non-Instructional Services \r\n \r\nEnterprise Operations \r\n \r\nFood Services \r\n \r\nInterest on Long-Term Debt \r\n \r\n65,694,333.22 $ \r\n3,931,760.02 1,480,516.73 1,319,190.07 1,200,815.04 5,020,228.47 1,090,676.42 7,101,773.95 3,009,553.89 205,645.86 \r\n103,096.35 \r\n94,605.78 4,981,987.02 \r\n412,171.20 \r\n \r\n107,197.64 $ 44,029,495.87 $ \r\n \r\n1,496,961.21 - \r\n7,474.57 - \r\n140,068.17 - \r\n8,737.95 834.58 - \r\n2,877.35 \r\n \r\n1,452,188.10 754,472.53 1,080,469.47 1,347,953.77 2,328,442.79 \r\n17,130.81 2,583,277.13 1,157,018.27 \r\n2,890.61 52,991.35 \r\n \r\n89.22 12,631.85 \r\n- \r\n \r\n6,599,199.96 \r\n- \r\n \r\n547,562.90 $ (21,010,076.81) \r\n \r\n540,540.00 - \r\n \r\n(982,610.71) (726,044.20) (231,246.03) \r\n147,138.73 (2,551,717.51) (1,073,545.61) (4,509,758.87) (1,311,161.04) (202,755.25) \r\n(47,227.65) \r\n \r\n7,427.17 \r\n- \r\n \r\n(94,516.56) 1,637,271.96 \r\n(412,171.20) \r\n \r\nTotal Governmental Activities \r\n \r\n$ 95,646,354.02 $ 1,776,872.54 $ 61,405,530.66 $ 1,095,530.07 \r\n \r\n(31,368,420.75) \r\n \r\nGeneral Revenues Taxes Property Taxes For Maintenance and Operations Other Taxes 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 \r\nSpecial Item Donation - Paving Labor and Equipment Cost Total General Revenues and Special Item \r\n \r\n17,338,022.21 60,717.80 \r\n6,375,615.03 339,372.83 \r\n7,851,861.00 78,608.94 \r\n1,432,806.88 \r\n38,070.00 33,515,074.69 \r\n \r\nChange in Net Position \r\n \r\n2,146,653.94 \r\n \r\nNet Position - Beginning of Year \r\n \r\n(4,531,270.11) \r\n \r\nNet Position - End of Year \r\n \r\n$ \r\n \r\n(2,384,616.17) \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 2 - \r\n \r\n ASSETS Cash and Cash Equivalents Investments Accounts Receivable, Net \r\nTaxes State Government Federal Government Other Inventories Restricted Investments with a Fiscal Agent or Trustee \r\nTotal Assets \r\nLIABILITIES Accounts Payable Salaries and Benefits Payable Contracts Payable Retainages Payable \r\nTotal Liabilities \r\nDEFERRED INFLOWS OF RESOURCES Unavailable Revenue - Property Taxes \r\nFUND BALANCES Nonspendable Restricted Assigned Unassigned \r\nTotal Fund Balances \r\nTotal Liabilities, Deferred Inflows of Resources, and Fund Balances \r\n \r\nPOLK COUNTY SCHOOL DISTRICT BALANCE SHEET \r\nGOVERNMENTAL FUNDS JUNE 30, 2021 \r\n \r\nGENERAL FUND \r\n \r\nCAPITAL PROJECTS \r\nFUND \r\n \r\nDEBT SERVICE \r\nFUND \r\n \r\nEXHIBIT \"C\" TOTAL \r\n \r\n$ \r\n \r\n28,481,407.24 $ \r\n \r\n10,000.00 \r\n \r\n1,853,783.02 6,190,692.12 1,675,267.69 \r\n170,048.40 134,761.59 \r\n \r\n- \r\n \r\n$ \r\n \r\n38,515,960.06 $ \r\n \r\n3,604,171.51 $ - \r\n554,990.07 \r\n- \r\n- \r\n4,159,161.58 $ \r\n \r\n2,823,539.49 $ - \r\n \r\n34,909,118.24 10,000.00 \r\n \r\n601,504.24 - \r\n \r\n2,455,287.26 6,745,682.19 1,675,267.69 \r\n170,048.40 134,761.59 \r\n \r\n1,914,205.21 \r\n \r\n1,914,205.21 \r\n \r\n5,339,248.94 $ 48,014,370.58 \r\n \r\n$ \r\n \r\n861,887.32 $ \r\n \r\n9,579,706.03 \r\n \r\n- \r\n \r\n- \r\n \r\n10,441,593.35 \r\n \r\n- $ 370,501.84 31,053.97 401,555.81 \r\n \r\n- $ - \r\n \r\n861,887.32 9,579,706.03 \r\n370,501.84 31,053.97 \r\n10,843,149.16 \r\n \r\n974,298.05 \r\n \r\n- \r\n \r\n- \r\n \r\n974,298.05 \r\n \r\n134,761.59 4,344,120.21 1,000,593.45 21,620,593.41 27,100,068.66 \r\n \r\n3,757,605.77 \r\n3,757,605.77 \r\n \r\n5,339,248.94 \r\n5,339,248.94 \r\n \r\n134,761.59 13,440,974.92 1,000,593.45 21,620,593.41 36,196,923.37 \r\n \r\n$ \r\n \r\n38,515,960.06 $ \r\n \r\n4,159,161.58 $ \r\n \r\n5,339,248.94 $ 48,014,370.58 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n-3- \r\n \r\n POLK COUNTY SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \r\nTO THE STATEMENT OF NET POSITION JUNE 30, 2021 \r\n \r\nEXHIBIT \"D\" \r\n \r\nTotal fund balances - governmental funds (Exhibit \"C\") \r\nAmounts reported for governmental activities in the Statement of Net Position are different because: \r\nCapital assets used in governmental activities are not financial resources and therefore are not reported in the funds. Land Construction in progress Buildings and improvements Equipment Land improvements Accumulated depreciation \r\nSome liabilities are not due and payable in the current period and, therefore, are not reported in the funds. Net pension liability Net OPEB liability \r\nDeferred outflows and inflows of resources related to pensions/OPEB are applicable to future periods and, therefore, are not reported in the funds. Related to pensions Related to OPEB \r\nTaxes that are not available to pay for current period expenditures are deferred in the funds. \r\nLong-term liabilities, and related accrued interest, are not due and payable in the current period and therefore are not reported in the funds. Bonds payable Accrued interest payable Capital lease payable Compensated absences payable Unamortized bond premiums \r\nNet position of governmental activities (Exhibit \"A\") \r\n \r\n$ \r\n \r\n36,196,923.37 \r\n \r\n$ \r\n \r\n2,384,621.10 \r\n \r\n1,505,065.63 \r\n \r\n130,749,478.75 \r\n \r\n6,566,238.42 \r\n \r\n3,192,036.65 \r\n \r\n(40,063,819.77) \r\n \r\n104,333,620.78 \r\n \r\n$ \r\n \r\n(83,796,704.00) \r\n \r\n(58,031,576.00) \r\n \r\n(141,828,280.00) \r\n \r\n$ \r\n \r\n21,706,078.99 \r\n \r\n(1,405,651.00) \r\n \r\n20,300,427.99 974,298.05 \r\n \r\n$ \r\n \r\n(20,050,000.00) \r\n \r\n(277,750.00) \r\n \r\n(336,607.33) \r\n \r\n(258,535.68) \r\n \r\n(1,438,713.35) \r\n \r\n$ \r\n \r\n(22,361,606.36) (2,384,616.17) \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 4 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES \r\nGOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2021 \r\n \r\nEXHIBIT \"E\" \r\n \r\nREVENUES Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous Total Revenues \r\nEXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Enterprise Operations Food Services Operation Capital Outlay Debt Services Principal Dues and Fees Interest Total Expenditures \r\nRevenues over (under) Expenditures \r\nOTHER FINANCING SOURCES (USES) Transfers In Transfers Out Total Other Financing Sources (Uses) \r\nNet Change in Fund Balances \r\nFund Balances - Beginning \r\nFund Balances - Ending \r\n \r\nGENERAL FUND \r\n \r\nCAPITAL PROJECTS \r\nFUND \r\n \r\nDEBT SERVICE \r\nFUND \r\n \r\nTOTAL \r\n \r\n$ \r\n \r\n17,564,256.45 $ \r\n \r\n339,372.83 \r\n \r\n54,644,802.51 \r\n \r\n15,235,151.17 \r\n \r\n1,776,872.54 \r\n \r\n4,194.33 \r\n \r\n1,329,929.00 \r\n \r\n90,894,578.83 \r\n \r\n- $ 554,990.07 1,921.14 102,877.88 659,789.09 \r\n \r\n- $ 6,939,114.77 \r\n72,493.47 7,011,608.24 \r\n \r\n17,564,256.45 7,278,487.60 55,199,792.58 15,235,151.17 1,776,872.54 \r\n78,608.94 1,432,806.88 98,565,976.16 \r\n \r\n58,328,875.72 \r\n3,885,922.58 1,400,131.26 1,232,392.87 1,180,624.02 4,671,353.83 1,051,991.00 7,157,577.89 3,517,252.99 178,691.07 102,343.19 94,605.78 4,918,325.88 - \r\n87,720,088.08 3,174,490.75 \r\n \r\n41,760.00 \r\n3,521.00 - \r\n435,365.36 - \r\n3,157,950.47 \r\n159,260.89 1,075.00 18,539.11 \r\n3,817,471.83 (3,157,682.74) \r\n \r\n- \r\n3,500.00 - \r\n2,605,000.00 - \r\n963,500.00 3,572,000.00 3,439,608.24 \r\n \r\n58,370,635.72 \r\n3,889,443.58 1,400,131.26 1,232,392.87 1,184,124.02 4,671,353.83 1,051,991.00 7,592,943.25 3,517,252.99 178,691.07 102,343.19 94,605.78 4,918,325.88 3,157,950.47 \r\n2,764,260.89 1,075.00 \r\n982,039.11 95,109,559.91 3,456,416.25 \r\n \r\n- \r\n \r\n3,174,490.75 \r\n \r\n23,925,577.91 \r\n \r\n$ \r\n \r\n27,100,068.66 $ \r\n \r\n3,670,156.33 - \r\n3,670,156.33 \r\n512,473.59 \r\n3,245,132.18 \r\n3,757,605.77 $ \r\n \r\n(3,670,156.33) (3,670,156.33) \r\n(230,548.09) \r\n5,569,797.03 \r\n5,339,248.94 $ \r\n \r\n3,670,156.33 (3,670,156.33) \r\n- \r\n3,456,416.25 \r\n32,740,507.12 \r\n36,196,923.37 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 5 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF \r\nREVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2021 \r\n \r\nEXHIBIT \"F\" \r\n \r\nNet change in fund balances total governmental funds (Exhibit \"E\") \r\nAmounts reported for governmental activities in the Statement of Activities are different because: \r\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. Capital outlay Depreciation expense \r\nTaxes reported in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. Property taxes SPLOST taxes \r\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. Bond principal retirements Capital lease payments Amortization of bond premium \r\nDistrict pension/OPEB 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. Pension expense OPEB expense \r\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. Accrued interest on issuance of bonds Compensated absences \r\nChange in net position of governmental activities (Exhibit \"B\") \r\n \r\n$ \r\n \r\n3,456,416.25 \r\n \r\n$ \r\n \r\n3,779,662.32 \r\n \r\n(2,904,246.64) \r\n \r\n875,415.68 \r\n \r\n$ \r\n \r\n(165,516.44) \r\n \r\n(563,499.74) \r\n \r\n(729,016.18) \r\n \r\n$ \r\n \r\n2,605,000.00 \r\n \r\n159,260.89 \r\n \r\n538,380.41 \r\n \r\n3,302,641.30 \r\n \r\n$ \r\n \r\n(4,386,222.10) \r\n \r\n(404,463.00) \r\n \r\n(4,790,685.10) \r\n \r\n$ \r\n \r\n32,562.50 \r\n \r\n(680.51) \r\n \r\n31,881.99 \r\n \r\n$ \r\n \r\n2,146,653.94 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 6 - \r\n \r\n ASSETS Cash and Cash Equivalents Investments \r\nTotal Assets \r\nLIABILITIES Due To Broker \r\nNET POSITION Employee's Pension Benefits Held in Trust for Private Purposes \r\n \r\nPOLK COUNTY SCHOOL DISTRICT STATEMENT OF FIDUCIARY NET POSITION \r\nFIDUCIARY FUNDS JUNE 30, 2021 \r\n \r\nEXHIBIT \"G\" \r\n \r\nPRIVATE PURPOSE TRUSTS \r\n \r\nPENSION TRUST FUND December 31, 2020 \r\n \r\n$ \r\n \r\n9,699.72 $ \r\n \r\n4,877.83 \r\n \r\n- \r\n \r\n4,944,361.11 \r\n \r\n$ \r\n \r\n9,699.72 $ \r\n \r\n4,949,238.94 \r\n \r\n$ \r\n \r\n3,373.94 \r\n \r\n4,945,865.00 \r\n \r\n$ \r\n \r\n9,699.72 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n-7- \r\n \r\n POLK COUNTY SCHOOL DISTRICT STATEMENT OF CHANGES IN FIDCUCIARY NET POSITION \r\nFIDUCIARY FUNDS YEAR ENDED JUNE 30, 2021 \r\n \r\nEXHIBIT \"H\" \r\n \r\nADDITIONS Contributions Employer Contributions Investment Earnings Net Increase in Fair Value of Investments Total Additions \r\nDEDUCTIONS Administrative Expenses Benefits Paid to Participants Other Deductions Total Deductions \r\nChange in Net Position \r\nNet Position - Beginning \r\nNet Position - Ending \r\n \r\nPRIVATE PURPOSE TRUSTS \r\n \r\nPENSION TRUST FUND December 31, 2020 \r\n \r\n$ \r\n \r\n- $ \r\n \r\n354,642.94 \r\n \r\n- \r\n \r\n485,410.06 \r\n \r\n- \r\n \r\n840,053.00 \r\n \r\n97.00 97.00 \r\n \r\n9,949.00 375,690.00 \r\n385,639.00 \r\n \r\n(97.00) \r\n \r\n454,414.00 \r\n \r\n9,796.72 \r\n \r\n4,491,451.00 \r\n \r\n$ \r\n \r\n9,699.72 $ \r\n \r\n4,945,865.00 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n-8- \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY \r\nReporting Entity \r\nThe Polk County School District (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. \r\nNOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES \r\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. \r\nBasis of Presentation \r\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. \r\nGovernment-Wide Statements: \r\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. \r\nThe Statement of Net Position presents the School District's non-fiduciary assets, deferred outflows of resources, deferred inflows of resources and liabilities, with the difference reported as net position. Net position is reported in three categories as follows: \r\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. \r\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. \r\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. \r\nThe Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities. \r\n- 9 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\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. \r\nFund Financial Statements \r\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. \r\nThe School District reports the following major governmental funds: \r\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. \r\n The 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 for capital outlay expenditures, including the acquisition or construction of capital facilities and other capital assets. \r\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 longterm principal and interest. \r\nThe School District reports the following fiduciary fund types: \r\n Private purpose trust funds are used to report all trust arrangements, other than those properly reported elsewhere, in which principal and income benefit individuals, private organizations or other governments. \r\n Pension trust fund accounts for the activities of Polk County School District Social Security Replacement Plan, a single employer defined benefit pension plan for the group of employees covered by the Public School Employees Retirement Systems (PSERS). \r\nBasis of Accounting \r\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 \r\n \r\n- 10 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\nlevied. 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. \r\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. \r\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 certain revenues reported in the governmental funds to be available if they are collected within 60 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 and compensated absences, 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. \r\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 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. \r\nNew Accounting Pronouncements \r\nIn fiscal year 2021, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 90, Majority Equity Interests. It defines a majority equity interest and specifies that majority equity interest in a legal separate organization should be reported as an investment. A majority equity interest that meets the definition of an investment should be measured using the equity method, unless it is held by a special-purpose government engaged only in fiduciary activities, a fiduciary fund, or an endowment (including permanent and term endowments) or permanent fund. Those governments and funds should measure the majority equity interest at fair value. The adoption of this statement did not have an impact on the School District's financial statements. \r\nFiscal Year End \r\nAll funds are reported using fiscal years which end on June 30, except defined benefit pension plan (fiduciary fund), which has a fiscal year ending December 31. \r\nCash and Cash Equivalents \r\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. \r\n- 11 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\nInvestments \r\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. \r\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. \r\nFor accounting purposes, certificates of deposit are classified as investments if they have an original maturity greater than three months when acquired. \r\nReceivables \r\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. \r\nInventories \r\nFood Inventories \r\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. \r\nRestricted Assets \r\nCertain resources set aside for repayment of debt are classified as restricted assets on the Statement of Net Position because their use is limited by applicable debt statutes, e.g. Qualified Zone Academy Bond sinking funds. \r\nCapital Assets \r\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. \r\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. \r\n- 12 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\nCapitalization thresholds and estimated useful lives of capital assets reported in the government-wide statements are as follows: \r\n \r\nCapitalization Policy \r\n \r\nEstimated Useful Life \r\n \r\nLand Land Improvements Buildings and Improvements Equipment Intangible Assets \r\n \r\nAll $ 50,000.00 $ 50,000.00 $ 50,000.00 $ 50,000.00 \r\n \r\nN/A 20 to 60 years 25 to 60 years \r\n5 to 50 years 10 to 20 years \r\n \r\nDeferred Outflows/Inflows of Resources \r\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. \r\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. \r\nCompensated Absences \r\nCompensated absences payable consists of vacation leave employees earned based on services already rendered. \r\nVacation leave of 10 days is awarded annually to all full-time personnel employed on a twelve-month basis with less than 15 years of experience and 15 days annually to all full-time personnel employed on a twelve-month basis with between 15 and 40 years of experience. Twelve-month employees with 40 or more years of services to the School District are eligible for 5 additional vacation days annually. No other employees are eligible to earn vacation leave. \r\nFor twelve-month employees with 15 or more years of experience, all unused vacation days may be carried forward into the next employment year up to and including June 30. This is a maximum of 15 days earned from previous year. Upon expiration of this limit, a maximum of 5 unused vacation days may be carried forward. Therefore, this employee could have a maximum of 20 days of acquired vacation at the start of a new fiscal year. \r\nFor twelve-month employees with less than 15 years of experience, all unused vacation days may be carried forward into the next employment year up to and including June 30. This is a maximum of 10 days earned from previous year. Upon expiration of this limit, a maximum of 5 unused vacation days may be carried forward. Therefore, this employee could have a maximum of 15 days of acquired vacation at the start of a new fiscal year. \r\n \r\n- 13 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\nUpon terminating employment, the School District pays all unused and unforfeited vacation benefits to employees. Accordingly, vacation benefits are accrued as a liability in the government-wide financial statements. A liability for these amounts is reported in the governmental fund financial statements only if they have matured, for example, as a result of employee resignations and retirements by fiscal-year end. \r\nMembers of the Teachers Retirement System of Georgia (TRS) may apply unused sick leave toward early retirement. The liability for early retirement will be borne by TRS rather than by the individual School Districts. Otherwise, sick leave does not vest with the employee, and no liability is reported in the School District's financial statements. \r\nLong-Term Liabilities and Bond Discounts/Premiums \r\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 straightline 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. \r\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. \r\nPensions \r\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. \r\nPost-Employment Benefits Other Than Pensions (OPEB) \r\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 Post-Employment 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. \r\nFund Balances \r\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. \r\n \r\n- 14 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\nThe School District's fund balances are classified as follows: \r\n \r\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. \r\n \r\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. \r\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. \r\n \r\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. \r\n \r\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. \r\n \r\nUse of Estimates \r\n \r\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. \r\n \r\nProperty Taxes \r\n \r\nThe Polk County Board of Commissioners adopted the property tax levy for the 2020 tax digest year (calendar year) on August 28, 2020 (levy date) based on property values as of January 1, 2020. Taxes were due on December 1, 2020 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2020 tax digest are reported as revenue in the governmental funds for fiscal year 2021. The Polk 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, 2021, for maintenance and operations amounted to $15,883,508.47. \r\nThe tax millage rate levied for the 2020 tax digest year (calendar year) for the School District was as follows (a mill equals $1 per thousand dollars of assessed value): \r\n \r\nSchool Operations \r\n \r\n14.139 mills \r\n \r\nAdditionally, Title Ad Valorem Tax revenues, at the fund reporting level, amounted to $1,620,030.18 during fiscal year ended June 30, 2021. \r\n \r\n- 15 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\nSales Taxes \r\nEducation Special Purpose Local Option Sales Tax (ESPLOST), at the fund reporting level, during the year amounted to $6,939,114.77 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. \r\nNOTE 3: BUDGETARY DATA \r\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. \r\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. \r\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. \r\nNOTE 4: DEPOSITS, CASH EQUIVALENTS AND INVESTMENTS \r\nCollateralization of Deposits \r\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. \r\nAcceptable security for deposits consists of any one of or any combination of the following: \r\n(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, \r\n(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, \r\n \r\n- 16 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\n(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia, \r\n(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, \r\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, \r\n(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and \r\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. \r\nCategorization of Deposits \r\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, 2021, School District had deposits with a carrying amount of $30,401,036.83, and a bank balance of $34,393,085.81. The bank balances insured by Federal depository insurance were $1,102,037.10. \r\nAt June 30, 2021, $33,291,048.71 of the School District's bank balances was in the State's Secure Deposit Program (SDP). \r\nThe School District participates in the State's Secure Deposit Program (SDP), a multi-bank pledging pool. The SDP requires participating banks that accept public deposits in Georgia to operate under the policy and procedures of the program. The Georgia Office of State Treasurer (OST) sets the collateral requirements and pledging level for each covered depository. There are four tiers of collateralization levels specifying percentages of eligible securities to secure covered deposits: 25%, 50%, 75%, and 110%. The SDP also provides for collateral levels to be increased in the amount of up to 125% if economic or financial conditions warrants. The program lists the types of eligible criteria. The OST approves authorized custodians. \r\nIn accordance with the SDP, if a covered depository defaults, losses to public depositors are first satisfied with any applicable insurance, followed by demands of payment under any letters of credit or sale of the covered depository collateral. If necessary, any remaining losses are to be satisfied by assessments made against the other participating covered depositories. Therefore, for disclosure purposes, all deposits of the SDP are considered to be fully collateralized. \r\n \r\n- 17 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\nReconciliation of cash and cash equivalents balances to carrying value of deposits: \r\n \r\nCash and cash equivalents Statement of Net Position Statement of Fiduciary Net Position \r\n \r\n$ 34,909,118.24 14,577.55 \r\n \r\nTotal cash and cash equivalents \r\n \r\n34,923,695.79 \r\n \r\nAdd: Deposits with original maturity of three months or more reported as investments \r\n \r\n10,000.00 \r\n \r\nLess: Investment pools reported as cash and cash equivalents Georgia Fund 1 \r\n \r\n4,532,658.96 \r\n \r\nTotal carrying value of deposits - June 30, 2021 \r\n \r\n$ 30,401,036.83 \r\n \r\nCategorization of Cash Equivalents \r\nThe School District reported cash equivalents of $4,532,658.96 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, $1.00 per share, which approximates fair value. The pool is an AAAf rated investment pool by Standard and Poor's. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2021 was 36 days. \r\nGeorgia Fund 1, administered by the State of Georgia, Office of the State Treasurer, is not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office of the State Treasurer for the Georgia Fund 1, does not provide for investment in derivatives or similar investments. Additional information on the Georgia Fund 1 is disclosed in the State of Georgia Annual Comprehensive Financial Report, which is publicly available at https://sao.georgia.gov/statewide-reporting/acfr. \r\n \r\n- 18 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\nCategorization of Investments \r\n \r\nAt June 30, 2021, the School District had the following investments: \r\n \r\nInvestment Type \r\n \r\nFair Value \r\n \r\nInvestment Maturity Less Than 1 Year \r\n \r\nDebt Securities U. S. Treasuries U. S. Agencies Implicitly Guaranteed \r\n \r\n$ \r\n \r\n1,453.90 $ \r\n \r\n1,912,751.31 \r\n \r\n1,453.90 1,912,751.31 \r\n \r\nOther Investments \r\n \r\nMutual Bond Funds \r\n \r\n1,893,090.32 \r\n \r\n- \r\n \r\nMutual Equity Funds \r\n \r\n2,927,495.59 \r\n \r\n- \r\n \r\nMutual Money Market Funds \r\n \r\n123,775.20 \r\n \r\n- \r\n \r\nTotal Investments \r\n \r\n$ 6,858,566.32 $ \r\n \r\n1,914,205.21 \r\n \r\nFair Value of Investments \r\nThe School District measures and records its investments using fair value measurement guidelines established by generally accepted accounting principles. These guidelines recognize a three-tiered fair value hierarchy, as follows: \r\nLevel 1: Quoted prices for identical investments in active markets; Level 2: Observable inputs other than quoted market prices; and, Level 3: Unobservable inputs. At June 30, the School District had the following investments by fair value level: \r\n \r\nInvestments by fair value level: \r\n \r\nFair Value \r\n \r\nLevel 1 \r\n \r\nLevel 2 \r\n \r\nDebt Securities U. S. Treasuries U. S. Agencies Implicitly Guaranteed Mutual Bond Funds Mutual Equity Funds - Domestic Mutual Equity Funds - International Mutual Money Market Funds \r\nTotal investments by fair value level \r\n \r\n$ \r\n \r\n1,453.90 $ \r\n \r\n- $ \r\n \r\n1,453.90 \r\n \r\n1,912,751.31 1,893,090.32 2,655,065.72 \r\n272,429.87 123,775.20 \r\n \r\n2,655,065.72 272,429.87 123,775.20 \r\n \r\n1,912,751.31 1,893,090.32 \r\n- \r\n \r\n$ 6,858,566.32 $ 3,051,270.79 $ 3,807,295.53 \r\n \r\n- 19 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\nInterest Rate Risk \r\n \r\nInterest rate risk is the risk that changes in interest rates of debt investment will adversely affect the fair value of an investment. The School District does not have a formal policy for managing interest rate risk. \r\n \r\nCustodial Credit Risk \r\n \r\nCustodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, the School District will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The School District does not have a formal policy for managing custodial credit risk. \r\nAt June 30, 2021, $4,820,585.91 of the School District's applicable investments were held by the investment's counterparty, not in the School District's name. \r\n \r\nCredit Quality Risk \r\n \r\nCredit quality risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. State law limits investments to those prescribed O.C.G.A. 36-83-4. The School District does not have a formal policy that would further limit its investment choices or one that addresses credit risk. \r\nThe investments subject to credit quality risk are reflected below: \r\n \r\nRated Debt Investments \r\n \r\nFair Value \r\n \r\nQuality Ratings \r\n \r\nAAA \r\n \r\nUnrated \r\n \r\nDebt Securities U. S. Treasuries U. S. Agencies Implicitly Guaranteed Mutual Bond Funds Mutual Money Market Funds \r\n \r\n$ \r\n \r\n1,453.90 $ \r\n \r\n1,453.90 $ \r\n \r\n- \r\n \r\n1,912,751.31 1,893,090.32 \r\n123,775.20 \r\n \r\n1,912,751.31 - \r\n \r\n1,893,090.32 \r\n123,775.20 \r\n \r\nTotals by Quality Ratings \r\n \r\n$ 3,931,070.73 $ 1,914,205.21 $ 2,016,865.52 \r\n \r\nConcentration of Credit Risk \r\nConcentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The School District does not have a formal policy for managing concentration of credit risk. More than 5% of the School District's investments are in Mutual Equity Funds, Mutual Bond Funds, and U.S. Agencies Implicitly Guaranteed. These investments are 43%, 28%, and 28% respectively of the School District's total investments. \r\nNOTE 5: RESTRICTED ASSETS \r\nThe restricted assets represent the cash and investment balance of $1,914,205.21, for the QZAB Bond Sinking Fund. \r\n \r\n- 20 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 6: CAPITAL ASSETS \r\n \r\nThe following is a summary of changes in the capital assets for governmental activities during the fiscal year: \r\n \r\nGovernmental Activities Capital Assets, \r\nNot Being Depreciated: Land Construction in Progress \r\n \r\nBalances July 1, 2020 \r\n \r\nIncreases Decreases Transfers \r\n \r\nBalances June 30, 2021 \r\n \r\n$ 2,384,621.10 $ \r\n \r\n- $ \r\n \r\n9,937,407.94 2,694,295.24 \r\n \r\n- $ \r\n \r\n- $ \r\n \r\n- \r\n \r\n(11,126,637.55) \r\n \r\n2,384,621.10 1,505,065.63 \r\n \r\nTotal Capital Assets Not Being Depreciated \r\n \r\n12,322,029.04 2,694,295.24 \r\n \r\n- \r\n \r\n(11,126,637.55) \r\n \r\n3,889,686.73 \r\n \r\nCapital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements \r\n \r\n119,499,397.72 5,991,468.42 2,804,883.05 \r\n \r\n348,443.48 574,770.00 162,153.60 \r\n \r\nLess Accumulated Depreciation: Buildings and Improvements Equipment Land Improvements \r\n \r\n31,221,264.23 4,494,650.80 1,443,658.10 \r\n \r\n2,539,275.53 294,956.66 70,014.45 \r\n \r\nTotal Capital Assets, Being Depreciated, Net \r\n \r\n91,136,176.06 (1,818,879.56) \r\n \r\nGovernmental Activities Capital Assets - Net \r\n \r\n$ 103,458,205.10 $ 875,415.68 $ \r\n \r\n- \r\n \r\n10,901,637.55 130,749,478.75 \r\n \r\n- \r\n \r\n- \r\n \r\n6,566,238.42 \r\n \r\n- \r\n \r\n225,000.00 \r\n \r\n3,192,036.65 \r\n \r\n- \r\n \r\n- \r\n \r\n33,760,539.76 \r\n \r\n- \r\n \r\n- \r\n \r\n4,789,607.46 \r\n \r\n- \r\n \r\n- \r\n \r\n1,513,672.55 \r\n \r\n- \r\n \r\n11,126,637.55 100,443,934.05 \r\n \r\n- $ \r\n \r\n- $ 104,333,620.78 \r\n \r\nCurrent year depreciation expense by function is as follows: \r\nInstruction Support Services \r\nStudent Transportation Services Food Services \r\n \r\n$ 2,591,599.39 \r\n273,781.10 38,866.15 \r\n \r\n$ 2,904,246.64 \r\n \r\n- 21 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 7: INTERFUND TRANSFERS \r\n \r\nInterfund transfers for the year ended June 30, 2021, consisted of the following: \r\n \r\nTransfers to \r\n \r\nTransfers From Debt Service \r\nFund \r\n \r\nCapital Projects Fund \r\n \r\n$ 3,670,156.33 \r\n \r\nTransfers are used to move Special Purpose Local Option Sales Tax (SPLOST) revenues collected by the debt service fund to the capital projects fund for the payment of cost associated with construction projects approved by the Special Purpose Local Option Sales Tax (SPLOST) referendum. \r\n \r\nNOTE 8: LONG-TERM LIABILITIES \r\n \r\nThe changes in long-term liabilities during the fiscal year for governmental activities were as follows: \r\n \r\nBalance July 1, 2020 \r\n \r\nGovernmental Activities \r\n \r\nBalance \r\n \r\nAdditions \r\n \r\nDeductions \r\n \r\nJune 30, 2021 \r\n \r\nDue Within One Year \r\n \r\nGeneral Obligation (G.O.) Bonds $ 20,655,000.00 $ Qualified Zone Academy Bonds 2,000,000.00 \r\n \r\n- $ 2,605,000.00 $ 18,050,000.00 $ 3,425,000.00 \r\n \r\n- \r\n \r\n- \r\n \r\n2,000,000.00 \r\n \r\n- \r\n \r\nUnamTotratilzeBdonBdonDdebDtiscount \r\n \r\n22,655,000-.00 \r\n \r\n- \r\n \r\n2,605,000-.00 20,050,000-.00 3,425,000-.00 \r\n \r\nCapital Leases Compensated Absences (1) Unamortized Bond Premiums \r\n \r\n495,868.22 257,855.17 1,977,093.76 \r\n \r\n56,433.98 \r\n- \r\n \r\n159,260.89 55,753.47 538,380.41 \r\n \r\n336,607.33 258,535.68 1,438,713.35 \r\n \r\n165,215.20 - \r\n308,295.72 \r\n \r\n$ 25,385,817.15 $ 56,433.98 $ 3,358,394.77 $ 22,083,856.36 $ 3,898,510.92 \r\n \r\n(1) The portion of compensated absences due within one year has been determined to be immaterial to the basic financial statements. \r\nGeneral Obligation Debt Outstanding \r\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. \r\nThe School District's outstanding general obligation bonds related to governmental activities of $18,050,000.00 contain a provision that in the event of a nonpayment, the State Board is authorized to and must withhold from any state appropriations to which the School District may be entitled and apply so much thereof as shall be necessary to the payment of the principal of and interest on such indebtedness then due. \r\n \r\n- 22 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\nGeneral obligation bonds currently outstanding are as follows: \r\n \r\nDescription \r\n \r\nInterest Rates \r\n \r\nIssue Date \r\n \r\nMaturity Date \r\n \r\nAmount Issued \r\n \r\nAmount Outstanding \r\n \r\nGeneral Government - Series 2018 4.00% - 5.00% 3/1/2018 3/1/2026 $ 18,050,000.00 $ 18,050,000.00 \r\n \r\nThe following schedule details debt service requirements to maturity for the School District's total general obligation bonds payable: \r\n \r\nFiscal Year Ended June 30: \r\n \r\nGeneral Obligation Debt \r\n \r\nPrincipal \r\n \r\nInterest \r\n \r\nUnamortized Bond Premium \r\n \r\n2022 2023 2024 2025 20237 - 202340126 \r\n \r\n$ 3,425,000.00 $ 833,250.00 \r\n \r\n3,500,000.00 \r\n \r\n696,250.00 \r\n \r\n3,600,000.00 \r\n \r\n556,250.00 \r\n \r\n3,700,000.00 \r\n \r\n376,250.00 \r\n \r\n3,825,000-.00 \r\n \r\n191,250-.00 \r\n \r\nTotal Principal and Interest $ 18,050,000.00 $ 2,653,250.00 \r\n \r\n$ 308,295.72 308,295.72 308,295.72 308,295.72 205,530-.47 \r\n$ 1,438,713.35 \r\n \r\nQualified Zone Academy Bonds (QZAB) \r\n \r\nSection 226 of the Taxpayer Relief Act of 1997 (Public Law 105-34) provides for a source of capital at no or at nominal interest rates for costs incurred by School Districts in connection with the establishment of special academic programs, in partnership with the business community. The School District, in agreement with Regions Bank, has entered into such an arrangement. \r\nThis agreement establishes a method of repayment for the qualified interest-free debt instrument. The agreement requires the School District to deposit funds annually into a sinking fund account on or before June 30, 2021. The amount on deposit at June 30, 2021 was $1,914,205.21. \r\nIn the event the amount of funds lawfully available is not sufficient to pay the QZAB payments when due in any year, the School District shall levy an ad valorem tax on all taxable property located within the boundaries of the School District subject to taxation for such purposes, at such rate or rates (subject to the 20 Mills Limitation) as may be necessary to produce in each calendar year revenues which shall be sufficient to fulfill the School District's obligations. \r\nDebt currently outstanding under Qualified Zone Academy Bonds is as follows: \r\n \r\nDescription General Government - QZAB - Series 2006 \r\n \r\nInterest Rate \r\n0.00% \r\n \r\nIssue Date 12/5/2006 \r\n \r\nMaturity Date \r\n \r\nAmount Issued \r\n \r\nAmount Outstanding \r\n \r\n12/15/2022 $ 2,000,000.00 $ 2,000,000.00 \r\n \r\nThe following schedule reports the annual Qualified Zone Academy Bond payments: \r\n \r\nFiscal Year Ended June 30: \r\n \r\nPrincipal \r\n \r\n2023 \r\n \r\n$ 2,000,000.00 \r\n \r\n- 23 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\nCapital Leases \r\n \r\nThe School District has acquired school buses under the provisions of various long-term lease agreements classified as capital leases for accounting purposes because they provide for a bargain purchase option or a transfer of ownership by the end of the lease term. \r\nCapital leases currently outstanding are as follows: \r\n \r\nPurpose \r\n \r\nInterest Rate \r\n \r\nIssue Date \r\n \r\nMaturity Date \r\n \r\nAmount Issued \r\n \r\nAmount Outstanding \r\n \r\nSDcehsocroipl btounses \r\n \r\n3.74% \r\n \r\n10/26/2018 10/5/2022 $ \r\n \r\n827,733-.00 $ 336,607-.33 \r\n \r\nThe following assets were acquired through capital leases and are reflected in the capital asset note at fiscal year-end: \r\n \r\nGovernmental Activities \r\n \r\nEquipment \r\n \r\n$ \r\n \r\nLess: Accumulated Depreciation \r\n \r\n827,733.00 206,933.25 \r\n \r\n$ \r\n \r\n620,799.75 \r\n \r\nThe following is a schedule of total capital lease payments: \r\nFiscal Year Ended June 30: \r\n \r\nPrincipal \r\n \r\n2022 2023 \r\nTotal Principal and Interest \r\n \r\n$ 165,215.20 $ 171,392.13 \r\n$ 336,607.33 $ \r\n \r\nCompensated Absences \r\nCompensated absences represent obligations of the School District relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. Typically, the general fund is the fund used to liquidate this long-term debt. The School District uses the vesting method to compute compensated absences. \r\nNOTE 9: RISK MANAGEMENT \r\nInsurance \r\nCommercial Insurance \r\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. 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. \r\n- 24 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\nUnemployment Compensation \r\n \r\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 claims liability during the past two years. \r\n \r\nSurety Bond \r\n \r\nThe School District purchased a surety bond to provide additional insurance coverage as follows: \r\n \r\nPosition Covered \r\n \r\nAmount \r\n \r\nSuperintendent \r\n \r\n$ \r\n \r\n100,000.00 \r\n \r\nNOTE 10: FUND BALANCE CLASSIFICATION DETAILS \r\n \r\nThe School District's financial statements include the following amounts presented in the aggregate at June 30, 2021: \r\n \r\nNonspendable Inventories \r\nRestricted Continuation of Federal Programs $ Capital Projects Debt Service \r\nAssigned School Activity Accounts \r\nUnassigned \r\n \r\n$ \r\n4,344,120.21 3,757,605.77 5,339,248.94 \r\n \r\n134,761.59 \r\n13,440,974.92 1,000,593.45 21,620,593.41 \r\n \r\nFund Balance, June 30, 2021 \r\n \r\n$ 36,196,923.37 \r\n \r\nWhen multiple categories of fund balance are available for an 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. \r\n \r\n- 25 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 11: SIGNIFICANT COMMITMENTS \r\n \r\nCommitments Under Construction Contracts \r\n \r\nThe following is an analysis of significant outstanding construction or renovation contracts executed by the School District as of June 30, 2021. \r\n \r\nProject \r\n \r\nUnearned Executed Contracts (1) \r\n \r\nPayments through June 30, 2021 (2) \r\n \r\nCedartown High School Parking Lot \r\n \r\n$ \r\n \r\nEastside Elementary School Roof \r\n \r\nEastside Elementary School HVAC \r\n \r\nNorthside Elementary School Modular \r\n \r\n324,283.45 $ 380,734.40 362,309.75 \r\n68,456.25 \r\n \r\n465,716.55 14,715.60 \r\n156,190.25 426,958.80 \r\n \r\n$ \r\n \r\n1,135,783.85 $ 1,063,581.20 \r\n \r\n(1) The amounts described are not reflected in the basic financial statements. (2) Payments include contracts and retainages payable at year end. \r\nNOTE 12: SIGNIFICANT CONTINGENT LIABILITIES \r\nFederal Grants \r\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. \r\nLitigation \r\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. \r\nNOTE 13: OTHER POST-EMPLOYMENT BENEFITS (OPEB) \r\nGeorgia School Personnel Post-Employment Health Benefit Fund \r\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 post-employment 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. \r\n \r\n- 26 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\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 $1,509,114.00 for the year ended June 30, 2021. Active employees are not required to contribute to the School OPEB Fund. \r\nOPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB \r\nAt June 30, 2021, the School District reported a liability of $58,031,576.00 for its proportionate share of the net OPEB liability. The net OPEB liability was measured as of June 30, 2020. The total OPEB liability used to calculate the net OPEB liability was based on an actuarial valuation as of June 30, 2019. An expected total OPEB liability as of June 30, 2020 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, 2020. At June 30, 2020, the School District's proportion was 0.395104%, which was an increase of 0.003325% from its proportion measured as of June 30, 2019. \r\n \r\n- 27 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\nFor the year ended June 30, 2021, the School District recognized OPEB expense of $1,913,577.00. At June 30, 2021, the School District reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: \r\n \r\nOPEB \r\n \r\nDeferred \r\n \r\nDeferred \r\n \r\nOutflows of \r\n \r\nInflows of \r\n \r\nResources \r\n \r\nResources \r\n \r\nDifferences between expected and actual experience \r\nChanges of assumptions \r\nNet difference between projected and actual earnings on OPEB plan investments \r\nChanges in proportion and differences between School District contributions and proportionate share of contributions \r\n \r\n$ \r\n \r\n- $ 6,335,246.00 \r\n \r\n9,597,134.00 \r\n \r\n5,163,562.00 \r\n \r\n151,252.00 \r\n \r\n- \r\n \r\n416,346.00 \r\n \r\n1,580,689.00 \r\n \r\nSchool District contributions subsequent to the \r\n \r\nmeasurement date \r\n \r\n1,509,114.00 \r\n \r\n- \r\n \r\nTotal \r\n \r\n$ 11,673,846.00 $ 13,079,497.00 \r\n \r\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, 2022. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: \r\n \r\nYear Ended June 30: \r\n \r\nOPEB \r\n \r\n2022 2023 2024 2025 2026 Thereafter \r\n \r\n$ (1,544,979.00) $ (1,549,039.00) $ (1,133,461.00) $ (10,339.00) $ 950,708.00 $ 372,345.00 \r\n \r\n- 28 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\nActuarial Assumptions: The total OPEB liability as of June 30, 2020 was determined by an actuarial valuation as of June 30, 2019 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, 2020: \r\n \r\nOPEB: \r\n \r\nInflation \r\n \r\n2.50% \r\n \r\nSalary increases \r\n \r\n3.00%  8.75%, including inflation \r\n \r\nLong-term expected rate of return \r\n \r\n7.30%, compounded annually, net of investment expense, and including inflation \r\n \r\nHealthcare cost trend rate \r\n \r\nPre-Medicare Eligible \r\n \r\n7.00% \r\n \r\nMedicare Eligible \r\n \r\n5.25% \r\n \r\nUltimate trend rate \r\n \r\nPre-Medicare Eligible \r\n \r\n4.50% \r\n \r\nMedicare Eligible \r\n \r\n4.50% \r\n \r\nYear of Ultimate trend rate \r\n \r\nPre-Medicare Eligible \r\n \r\n2029 \r\n \r\nMedicare Eligible \r\n \r\n2023 \r\n \r\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: \r\n \r\n For TRS members: The Pub-2010 Teachers Headcount Weighted Below Median Healthy Retiree Mortality Table projected generationally with MP-2019 projection scale (set forward one year and adjusted 106%) is used for death prior to retirement and for service retirements and beneficiaries. The Pub-2010 Teachers Mortality Table for Disabled Retirees projected generationally with MP-2019 Projection scale (set forward one year and adjusted 106%) is used for disability retirements. For both, rates of improvement were reduced by 20% for all years prior to the ultimate rate. \r\n For PSERS members: 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) 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. Rates of mortality in active service was based on the RP-2000 Employee Mortality Table projected to 2025 with projection scale BB. There is a margin for future morality improvement in the tables used by the plan. \r\n \r\nThe actuarial assumptions used in the June 30, 2019 valuation were based on the results of an actuarial experience study for the pension systems, which covered the five-year period ending June 30, 2018, with the exception of the assumed annual rate of inflation which was changed from 2.75% to 2.50%, effective with the June 30, 2018 valuation. \r\n- 29 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\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, 2019 valuation were based on a review of recent plan experience done concurrently with the June 30, 2019 valuation. \r\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. \r\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: \r\n \r\nAsset class \r\n \r\nTarget Allocation \r\n \r\nLong-Term Expected Real Rate of Return* \r\n \r\nFixed Income Equity \r\n \r\n30.00% 70.00% \r\n \r\n0.50% 9.20% \r\n \r\nTotal \r\n \r\n100.00% \r\n \r\n*Net of Inflation \r\n \r\nDiscount Rate: In order to measure the total OPEB liability for the School OPEB Fund, a single equivalent interest rate of 2.22% was used as the discount rate, as compared with last year's rate of 3.58%. This is comprised mainly of the yield or index rate for 20-year tax-exempt general obligation bonds with an average rating of AA or higher (2.21% per the Municipal Bond Index Rate). 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. \r\nSensitivity of the School District's Proportionate Share of the Net OPEB Liability to Changes in the Discount Rate: The following presents the collective net OPEB liability of the participating employers calculated using the discount rate of 2.22%, 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 (1.22%) or 1-percentage-point higher (3.22%) than the current discount rate: \r\n \r\n1% Decrease (1.22%) \r\n \r\nCurrent Discount Rate (2.22%) \r\n \r\n1% Increase (3.22%) \r\n \r\nSchool District's proportionate share of the Net OPEB liability \r\n \r\n$ 68,177,528.00 $ \r\n \r\n58,031,576.00 $ 49,917,648.00 \r\n \r\n- 30 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\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 collective net OPEB liability of the participating employers, as well as what the collective net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower or 1-percentagepoint higher than the current healthcare cost trend rates: \r\n \r\n1% Decrease \r\n \r\nCurrent Healthcare Cost Trend Rate \r\n \r\n1% Increase \r\n \r\nSchool District's proportionate share of the Net OPEB liability \r\n \r\n$ 48,317,120.00 $ \r\n \r\n58,031,576.00 $ 70,608,974.00 \r\n \r\nOPEB Plan Fiduciary Net Position: Detailed information about the OPEB plan's fiduciary net position is available in the Annual Comprehensive Financial Report, which is publicly available at https://sao.georgia.gov/statewide-reporting/acfr. \r\n \r\nNOTE 14: RETIREMENT PLANS \r\n \r\nThe School District participates in various retirement plans administered by the State of Georgia, as further explained below. \r\n \r\nTeachers Retirement System of Georgia (TRS) \r\n \r\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 O.C.G.A 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. \r\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. \r\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 2021. The School District's contractually required contribution rate for the year ended June 30, 2021 was 19.06% of annual School District payroll, of which 18.98% of \r\n \r\n- 31 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\npayroll was required from the School District and 0.08% of payroll was required from the State. For the current fiscal year, employer contributions to the pension plan were $8,421,137.11 and $33,519.02 from the School District and the State, respectively. \r\nEmployees' Retirement System \r\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/financials. \r\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. \r\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. \r\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. \r\nContributions: Member contributions under the old plan are 4.00% of annual compensation, up to $4,200.00, plus 6.00% 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 total required contribution rate for the year ended June 30, 2021 was 24.66% of annual covered payroll for old plan members of which 19.91% was required from the School District and 4.75% was contributed on behalf of the School District by the state. Additionally, the School District's total required contribution rate was 24.66% for new plan members and 21.57% for GSEPS members. 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 $43,418.88 for the current fiscal year. \r\n \r\n- 32 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\nPublic School Employees Retirement System (PSERS) \r\n \r\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/financials. \r\n \r\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. \r\n \r\nUpon retirement, the member will receive a monthly benefit of $15.50, 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. \r\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. \r\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 $108,231.00. \r\nPension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions \r\nAt June 30, 2021, the School District reported a liability of $79,692,563.00 for its proportionate share of the net pension liability for TRS ($79,367,716.00) and ERS ($324,847.00). \r\nThe TRS net pension liability reflected a reduction for support provided to the School District by the State of Georgia for certain public school support personnel. The amount recognized by the School District as its proportionate share of the net pension liability, the related State of Georgia support, and the total portion of the net pension liability that was associated with the School District were as follows: \r\n \r\nSchool District's proportionate share of the net pension liability \r\n \r\n$ 79,367,716.00 \r\n \r\nState of Georgia's proportionate share of the net pension liability associated with the School District \r\nTotal \r\n \r\n287,053.00 $ 79,654,769.00 \r\n- 33 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\nThe net pension liability for TRS and ERS was measured as of June 30, 2020. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2019. An expected total pension liability as of June 30, 2020 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, 2020. \r\nAt June 30, 2020, the School District's TRS proportion was 0.327642%, which was an increase of 0.004779% from its proportion measured as of June 30, 2019. At June 30, 2020, the School District's ERS proportion was 0.007707%, which was an increase of 0.000557% from its proportion measured as of June 30, 2019. \r\nAt June 30, 2021, 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 $563,934.00. \r\nThe PSERS net pension liability was measured as of June 30, 2020. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2019. An expected total pension liability as of June 30, 2020 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, 2020. \r\nFor the year ended June 30, 2021, the School District recognized pension expense of $12,699,437.49 for TRS, $93,814.36 for ERS and $113,483.00 for PSERS and revenue of ($53,755.00) for TRS and $113,483.00 for PSERS. The revenue is support provided by the State of Georgia. For TRS the State of Georgia support is provided only for certain support personnel. \r\n \r\n- 34 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\nAt June 30, 2021, the School District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: \r\n \r\nTRS \r\n \r\nDeferred \r\n \r\nDeferred \r\n \r\nOutflows of \r\n \r\nInflows of \r\n \r\nResources \r\n \r\nResources \r\n \r\nERS Deferred Outflows of Resources \r\n \r\nDeferred Inflows of Resources \r\n \r\nDifferences between expected and actual \r\n \r\nexperience \r\n \r\n$ 3,456,489.00 $ \r\n \r\n- $ \r\n \r\n3,957.00 $ \r\n \r\n- \r\n \r\nChanges of assumptions \r\n \r\n8,174,966.00 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\nNet difference between projected \r\n \r\nand actual earnings on pension plan \r\n \r\ninvestments \r\n \r\n1,911,585.00 \r\n \r\n- \r\n \r\n4,589.00 \r\n \r\n- \r\n \r\nChanges in proportion and \r\n \r\ndifferences between School District \r\n \r\ncontributions and proportionate share of \r\n \r\ncontributions \r\n \r\n705,247.00 \r\n \r\n1,249,334.00 \r\n \r\n31,608.00 \r\n \r\n- \r\n \r\nSchool District contributions \r\n \r\nsubsequent to the measurement date \r\n \r\n8,421,137.11 \r\n \r\n- \r\n \r\n43,418.88 \r\n \r\n- \r\n \r\nTotal \r\n \r\n$ 22,669,424.11 $ 1,249,334.00 $ \r\n \r\n83,572.88 $ \r\n \r\n- \r\n \r\nThe School District contributions subsequent to the measurement date of 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, 2022. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: \r\n \r\nYear Ended June 30: \r\n \r\nTRS \r\n \r\nERS \r\n \r\n2022 2023 2024 2025 \r\n \r\n$ 2,310,946.00 $ $ 4,223,780.00 $ $ 4,506,333.00 $ $ 1,957,894.00 $ \r\n \r\n23,849.00 6,966.00 5,325.00 4,014.00 \r\n \r\n- 35 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\nActuarial Assumptions: The total pension liability as of June 30, 2020 was determined by an actuarial valuation as of June 30, 2019, using the following actuarial assumptions, applied to all periods included in the measurement: \r\n \r\nTeachers Retirement System: \r\n \r\nInflation \r\n \r\n2.50% \r\n \r\nSalary increases \r\n \r\n3.00%  8.75%, average, including inflation \r\n \r\nInvestment rate of return \r\n \r\n7.25%, net of pension plan investment expense, including inflation \r\n \r\nPost-retirement benefit increases 1.50% semi-annually \r\nPost-retirement mortality rates for service retirements and beneficiaries were based on the Pub-2010 Teachers Headcount Weighted Below Median Healthy Retiree mortality table (ages set forward one year and adjusted 106%) with the MP-2019 Projection scale applied generationally. The rates of improvement were reduced by 20% for all years prior to the ultimate rate. Post-retirement mortality rates for disability retirements were based on the Pub-2010 Teachers Mortality Table for Disabled Retirees (ages set forward one year and adjusted 106%) with the MP-2019 Projection scale applied generationally. The rates of improvement were reduced by 20% for all years prior to the ultimate rate. The Pub-2010 Teachers Headcount Weighted Below Median Employee mortality table with ages set forward one year and adjusted 106% as used for death prior to retirement. Future improvement in mortality rates was assumed using the MP-2019 projection scale generationally. These rates of improvement were reduced by 20% for all years prior to the ultimate rate. \r\nThe actuarial assumptions used in the June 30, 2019 valuation were based on the results of an actuarial experience study for the period July 1, 2013  June 30, 2018. \r\nEmployees' Retirement System: \r\n \r\nInflation \r\n \r\n2.75% \r\n \r\nSalary increases \r\n \r\n3.25% - 7.00%, including inflation \r\n \r\nInvestment rate of return \r\n \r\n7.30%, net of pension plan investment expense, including inflation \r\n \r\nPost-retirement mortality rates were based on the RP-2000 Combined Mortality Table with future mortality improvement projected to 2025 with the Society of Actuaries' projection scale BB and set forward 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 of Actuaries' projection scale BB and set back 7 years for males and set forward 3 years for 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 9-12% less than the actual number of deaths that occurred during the study period for service retirements 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. \r\n \r\n- 36 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\nThe actuarial assumptions used in the June 30, 2019 valuation were based on the results of an actuarial experience study for the period July 1, 2009  June 30, 2014, with the exception of the assumed investment rate of return. \r\n \r\nPublic School Employees Retirement System: \r\n \r\nInflation \r\n \r\n2.75% \r\n \r\nSalary increases \r\n \r\nN/A \r\n \r\nInvestment rate of return \r\n \r\n7.30%, net of pension plan investment expense, including inflation \r\n \r\nPost-retirement benefit increases 1.50% semi-annually \r\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. \r\nThe actuarial assumptions used in the June 30, 2019 valuation were based on the results of an actuarial experience study for the period July 1, 2009  June 30, 2014, with the exception of the assumed investment rate of return. \r\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 \r\n \r\n- 37 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\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: \r\n \r\nAsset class \r\n \r\nTRS Target allocation \r\n \r\nERS/PSERS Target \r\nallocation \r\n \r\nLong-term expected real rate of return* \r\n \r\nFixed income Domestic large stocks Domestic small stocks International developed market stocks International emerging market stocks Alternative \r\n \r\n30.00% 51.00% \r\n1.50% 12.40% \r\n5.10% -- \r\n \r\n30.00% 46.20% \r\n1.30% 12.40% \r\n5.10% 5.00% \r\n \r\n(0.10)% 8.90% 13.20% 8.90% 10.90% 12.00% \r\n \r\nTotal \r\n \r\n100.00% \r\n \r\n100.00% \r\n \r\n* Rates shown are net of the 2.75% assumed rate of inflation with the exception of TRS, which assumed a rate of 2.50% rate of inflation. \r\n \r\nDiscount Rate: The discount rate used to measure the total TRS pension liability was 7.25%. 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 plans' fiduciary net position were 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. \r\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 7.25% 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 (6.25% and 6.30%) or 1-percentage-point higher (8.25% and 8.30%) than the current rate: \r\n \r\nTeachers Retirement System: \r\n \r\n1% Decrease (6.25%) \r\n \r\nCurrent Discount Rate (7.25%) \r\n \r\n1% Increase (8.25%) \r\n \r\nSchool District's proportionate share of the net pension liability \r\n \r\n$ 125,858,252.00 $ \r\n \r\n79,367,716.00 $ 41,258,807.00 \r\n \r\nEmployees' Retirement System: \r\nSchool District's proportionate share of the net pension liability \r\n \r\n1% Decrease (6.30%) \r\n \r\nCurrent Discount Rate (7.30%) \r\n \r\n1% Increase (8.30%) \r\n \r\n$ \r\n \r\n457,002.00 $ \r\n \r\n324,847.00 $ \r\n \r\n212,067.00 \r\n \r\n- 38 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\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 publicly available at www.trsga.com/publications and http://www.ers.ga.gov/financials. \r\nPolk County School District Social Security Replacement Plan \r\nPlan Description: As of January 2004, the School District established a single employer defined benefit pension plan for the group of employees covered under the Public Service Employees Retirement System (PSERS). Recognizing that PSERS was a limited defined benefit plan that does not meet the requirements of a qualified social security replacement plan, the new plan was established for these employees to meet the requirements of a social security replacement plan. \r\nThe School District Social Security Replacement Plan (Plan) provides a pension benefit for each participant at retirement, equal to 1.5% of the participant's Average Monthly Compensation multiplied by his Years of Credited Service up to 40 Years of Credited Service. Years of service subsequent to July 1, 1991, are counted for purposes of determining a participant's benefit. The funding method and determination of benefits payable are provided in or authorized by various sections of Title 47 of the Official Code of Georgia Annotated (\"OCGA\"). The Plan does not issue a separate financial report. \r\nThe employee is always 100% vested in his accrued benefit in the Plan. \r\nThe Plan is funded by employer contributions held in trust by Reliance Trust Company. The Actuary for the Plan is Future Plan by Ascensus. The Actuary determines the Plan liabilities and required contributions on an annual basis. \r\nAs of January 1, 2021, there were 421 Plan participants, consisting of the following: \r\nJanuary 1, 2021 \r\n \r\nActive plan members \r\n \r\n108 \r\n \r\nVested terminated participants \r\n \r\n201 \r\n \r\nRetirees, beneficiaries, and disabled participants \r\n \r\n112 \r\n \r\n421 \r\n \r\nFunding Policy: Employees are neither required nor permitted to make contributions to the Plan. The Polk County School District (Employer) makes contributions required to fund the cost of the benefits provided to its eligible employees by this Plan. The Employer makes such contributions as necessary to fund the Plan in accordance with all applicable minimum funding standards under Georgia Law. \r\nThe Employer's Annual Required Minimum contribution is the actuarially determined amount necessary to fund the plan benefits. The current year required minimum contribution was $336,514.00. The current contribution rate was 15.94% of annual covered payroll. \r\nInvestments: The Plan maintains an investment policy which fosters prudent and sound judgment in the management of plan assets to ensure safety of capital consistent with its fiduciary responsibility to the citizens of Georgia and which conforms to the Plan's investment policy. All investments are consistent with Polk School District's policy and applicable Federal and state laws. \r\n \r\n- 39 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\nInvestments are reported at fair value. Securities are traded on a national or international exchange and are valued at the last reported sales price. The Plan's investment policy requires diversification of assets in an effort to avoid the risk of large losses and maximize the investment return to the Plan consistent with market and economic risk. \r\nAs of December 31, 2020, the Plan's assets are: \r\nAsset Class \r\n \r\nCash and Equivalent Short-Term Investments Domestic Equities International Equities Fixed Income \r\n \r\n$ \r\n \r\n4,877.83 \r\n \r\n123,775.20 \r\n \r\n2,655,065.72 \r\n \r\n272,429.87 \r\n \r\n1,893,090.32 \r\n \r\n$ 4,949,238.94 \r\n \r\nFor the plan year ended December 31, 2020, the annual money-weighted rate of return on pension plan investments, net of plan investment expense, was 11.52%. \r\nThe following table summarizes the adopted asset allocation policy at December 31, 2020: \r\n \r\nAsset Class \r\n \r\nAdopted Asset Allocation \r\n \r\nDomestic Equities International Equities Fixed Income Cash and Equivalent \r\nTotal \r\n \r\n40% to 50% 1% to 5% \r\n35% to 45% 1% to 10% \r\n100% \r\n \r\nPension Liability, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to the Plan: \r\nThe components of the net pension liability at December 31, 2020 were as follows: \r\n \r\nTotal pension liability \r\n \r\n$ \r\n \r\nPlan fiduciary net position \r\n \r\n9,050,006.00 (4,945,865.00) \r\n \r\nNet pension liability \r\n \r\n$ \r\n \r\n4,104,141.00 \r\n \r\nThe Plan's fiduciary net position as a percentage of its total pension liability is 54.65%. \r\nThe net pension liability for the Plan was measured as of December 31, 2020. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of January 1, 2020. An expected total pension liability as of December 31, 2020 was determined using standard roll-forward techniques. \r\n \r\n- 40 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\nFor the year ended June 30, 2021, the School District recognized pension expense of $339,519.00 for the Plan. \r\n \r\nAt June 30, 2021, the School District reported deferred outflows and resources and deferred inflows of resources related to the Plan from the following sources: \r\n \r\nDeferred Outflows of Resources \r\n \r\nDeferred Inflows of Resources \r\n \r\nDifference between projected and actual \r\n \r\nearnings on pension plan investments \r\n \r\n$ \r\n \r\n219,256.00 $ \r\n \r\n449,119.00 \r\n \r\nDifferences between expected and actual experiences \r\n \r\n141,654.00 \r\n \r\n323,743.00 \r\n \r\nChanges in actuarial assumptions \r\n \r\n840,558.00 \r\n \r\n226,190.00 \r\n \r\nTotal \r\n \r\n$ 1,201,468.00 $ 999,052.00 \r\n \r\nAmounts reported as deferred outflows of resources and deferred inflows of resources related to the Plan will be recognized in pension expense as follows: \r\nYear Ended June 30: \r\n \r\n2020 2021 \r\n \r\n$ (5,955.00) $ 22,465.00 \r\n \r\n2022 2023 2024 \r\n \r\n$ (87,159.00) $ (1,354.00) $ 38,304.00 \r\n \r\n2025 \r\n \r\n$ 236,115.00 \r\n \r\nActuarial Methods and Assumptions: The total pension liability was determined as of January 1, 2021 using the following actuarial assumptions and methods (see the January 1, 2021 actuarial valuation report for other assumptions): \r\n \r\nInflation \r\n \r\n2.50% \r\n \r\nSalary Increases \r\n \r\n3.00% \r\n \r\nInvestment rate of return \r\n \r\n7%, net of pension plan investment expense \r\n \r\nSingle equivalent discount rate \r\n \r\n4.83%, net of pension plan investment expense \r\n \r\nMorality rates were based on the RP-2014 Blue Collar with MP-2018. \r\nThe long-term expected rate of return on the Plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return, net of investment expenses and inflation, are developed for each major asset class. These ranges are combined to produce \r\n \r\n- 41 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\nthe long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by the expected inflation. Best estimates of arithmetic real rates of return for each major asset class, included in the Plan's target asset allocation as of December 31, 2020: \r\n \r\nAsset Class \r\n \r\nTarget Allocation \r\n \r\nLong-Term Expected Real Rate of Return* \r\n \r\nDomestic Equities International Equities Fixed Income Cash \r\n \r\n49% 5% 41% 5% \r\n \r\n6.40% 7.00% 2.75% 1.00% \r\n \r\n* Rates shown are net of the 2.50% assumed rate of inflation. \r\nDiscount Rate: The discount rate used to measure the total pension liability was the single equivalent discount rate shown above. The projection of cash flows used to determine the discount rate assumed that employer contributions will be made at rates equal to actuarially determined contribution rates. Based on this assumption, the Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current Plan members through 2055 and the long-term expected rate of return of 7.00% was applied to this period. The December 31, 2020 20-year tax-free municipal bond yield of 2.12% was applied after 2055. \r\nSensitivity of the Polk County School District's Net Pension Liability to Changes in the Discount Rate: The following represents the net pension liability calculated using the stated discount rate, as well as what the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (3.83%) or 1-percentage-point higher (5.83%) than the current rate: \r\n \r\nSchool District's proportionate share of the net pension liability \r\n \r\n1% Decrease (3.83%) \r\n$ 5,258,448.00 $ \r\n \r\nCurrent Rate (4.83%) \r\n \r\n1% Increase (5.83%) \r\n \r\n4,104,141.00 $ \r\n \r\n3,140,345.00 \r\n \r\nNOTE 15: TAX ABATEMENTS \r\nThe Development Authority of Polk County, the Cedartown Development Authority and the Rockmart Development Authority can enter into agreements with private individuals or entities for economic or industrial projects to encourage the creation of jobs and capital investment through an \"Economic Incentive Program\". This program is used to incentivize these businesses to build, relocate, expand, or renovate within incorporated and unincorporated Polk County. Each agreement provides a property tax benefit to the company through a schedule of discounted valuation that reduces, for ad valorem tax purposes, the fair market value of real and/or personal property that is held by the Authorities and leased to the company. Georgia case law and the Authorities' enabling legislation provides the Authorities with the power to enter into such agreements with private companies. \r\nThe Authorities may accept title to real and personal property assets from a company in return for job creation and capital investment and provide a tax benefit to the company through a lease agreement with the Authority. In considering eligibility for providing this benefit to a company, the Authorities review the following criteria: \r\n1. Eligible businesses can include new and existing industrial businesses. \r\n \r\n- 42 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2021 \r\n \r\nEXHIBIT \"I\" \r\n \r\n2. But for an incentive agreement, the company would not create the jobs and investment in the community. \r\n3. Eligible projects must involve significant investment in real and personal property. 4. The average wage of the business' employees should be above the average wage of goods \r\nproducing employees in Polk County. 5. The business should offer medical benefits to all employees. 6. The impact to job retention will be considered for each expansion project. 7. As a condition of assistance, a business will be required to work with the Authority to convey \r\ntitle to the Authority. \r\nIn return for a property tax benefit, a company is required to commit to creating jobs and capital investment within a defined period as part of a performance and accountability agreement with the Authority that includes provisions for the company to pay back a prorated portion of the benefit if they fail to meet the performance criteria by a specified date. The Authorities monitor compliance with performance and accountability agreements to ensure the companies meet their commitments. \r\nFor the Polk County School District's year ending June 30, 2021 the cumulative property tax not collected due to incentive agreements was $62,452.51; however, $581,825.86 was paid to the Polk County School District through the Economic Incentive Program for the same period. These agreements will result in an estimated $67.0 million in new capital investment for Polk County and more than 186 new/retained jobs. According to the National Association of Manufacturers, the new capital investment will generate an additional $167.4 million in our economy, and the 186 jobs will generate another 632 jobs in other sectors. \r\nIncluded in the $62,452.51 abated, the following are tax abatement agreements amounts with individual companies that each exceed 10.00 percent of the total amount abated: \r\n A property tax abatement was granted to Kimoto Tech in the amount of $24,483.00. \r\n A property tax abatement was granted to Westbound Solar in the amount of $17,735.10. \r\n Property tax abatements were granted to Inman Solar totaling $14,665.55. \r\nNOTE 16: SPECIAL ITEM \r\nDuring fiscal year 2021, the School District received a donation for paving labor and equipment cost on the Westside Elementary School and Cherokee High School projects. The fair value of this donated cost is $38,070.00. This is reflected as a special item on Exhibit B of this report. \r\nNOTE 17: SUBSEQUENT EVENTS \r\nOn November 2, 2021, voters authorized the School District to reimpose a special one percent sales and use tax for educational purposes and funding of capital projects. \r\nOn April 12, 2022, the School District sold General Obligation Bonds, Series 2022, in the amount of $25,000,000.00, generating a premium of $3,669,380.00, to provide the necessary funds for the acquisition, construction, and equipping of capital facilities. \r\n \r\n- 43 - \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY TEACHERS RETIREMENT SYSTEM OF GEORGIA \r\n \r\nSCHEDULE \"1\" \r\n \r\nFor the Year Ended \r\nJune 30 \r\n \r\nSchool District's proportion \r\nof the Net Pension Liability (NPL) \r\n \r\nSchool District's proportionate share of the NPL \r\n \r\nState of Georgia's proportionate \r\nshare of the NPL associated with \r\nthe School District \r\n \r\nTotal \r\n \r\nSchool District's covered payroll \r\n \r\nSchool District's proportionate share of the NPL as a percentage of its covered \r\npayroll \r\n \r\nPlan fiduciary net position \r\nas a percentage of the total \r\npension liability \r\n \r\n2021 2020 2019 2018 2017 2016 2015 \r\n \r\n0.327642% $ 79,367,716.00 $ 287,053.00 $ 79,654,769.00 $ 42,459,243.32 0.322863% $ 69,424,275.00 $ 327,916.00 $ 69,752,191.00 $ 39,589,606.96 0.327378% $ 60,768,369.00 $ 289,755.00 $ 61,058,124.00 $ 39,127,366.15 0.332680% $ 61,829,603.00 $ 748,059.00 $ 62,577,662.00 $ 38,673,234.64 0.342487% $ 70,658,887.00 $ 944,080.00 $ 71,602,967.00 $ 38,069,372.98 0.345774% $ 52,640,658.00 $ 600,892.00 $ 53,241,550.00 $ 36,915,144.69 0.346443% $ 43,768,503.00 $ 560,177.00 $ 44,328,680.00 $ 35,545,926.47 \r\n \r\n186.93% 175.36% 155.31% 159.88% 185.61% 142.60% 123.13% \r\n \r\n77.01% 78.56% 80.27% 79.33% 76.06% 81.44% 84.03% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 45 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \r\nSCHEDULE OF CONTRIBUTIONS TEACHERS RETIREMENT SYSTEM OF GEORGIA \r\n \r\nSCHEDULE \"2\" \r\n \r\nFor the Year Ended June 30 \r\n \r\nContractually required contribution \r\n \r\nContributions in relation to the contractually required contribution \r\n \r\nContribution deficiency (excess) \r\n \r\nSchool District's covered payroll \r\n \r\n2021 2020 2019 2018 2017 2016 2015 \r\n \r\n$ \r\n \r\n8,421,137.11 $ \r\n \r\n$ \r\n \r\n8,941,170.49 $ \r\n \r\n$ \r\n \r\n8,235,903.09 $ \r\n \r\n$ \r\n \r\n6,546,048.34 $ \r\n \r\n$ \r\n \r\n5,456,446.48 $ \r\n \r\n$ \r\n \r\n5,360,865.43 $ \r\n \r\n$ \r\n \r\n4,797,913.58 $ \r\n \r\n8,421,137.11 $ 8,941,170.49 $ 8,235,903.09 $ 6,546,048.34 $ 5,456,446.48 $ 5,360,865.43 $ 4,797,913.58 $ \r\n \r\n- \r\n \r\n$ 44,357,338.07 \r\n \r\n- \r\n \r\n$ 42,459,243.32 \r\n \r\n- \r\n \r\n$ 39,589,606.96 \r\n \r\n- \r\n \r\n$ \r\n \r\n39,127,366.15 \r\n \r\n- \r\n \r\n$ 38,673,234.64 \r\n \r\n- \r\n \r\n$ 38,069,372.98 \r\n \r\n- \r\n \r\n$ \r\n \r\n36,915,144.69 \r\n \r\nContribution as a percentage of covered payroll \r\n18.98% 21.06% 20.80% 16.73% \r\n14.11% 14.08% 13.00% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 46 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \r\n \r\nSCHEDULE \"3\" \r\n \r\nFor the Year Ended June 30 \r\n2021 2020 2019 2018 2017 2016 2015 \r\n \r\nSchool District's proportion of the Net Pension Liability (NPL) \r\n \r\nSchool District's proportionate share \r\nof the NPL \r\n \r\nSchool District's covered payroll \r\n \r\nSchool District's proportionate share \r\nof the NPL as a percentage of covered payroll \r\n \r\nPlan fiduciary net position as a \r\npercentage of total pension liability \r\n \r\n0.007707% $ 0.007150% $ 0.005132% $ 0.005232% $ 0.004803% $ 0.003427% $ 0.003393% $ \r\n \r\n324,847.00 $ 295,047.00 $ 210,978.00 $ 212,489.00 $ 227,202.00 $ 138,841.00 $ 127,258.00 $ \r\n \r\n206,943.46 180,218.56 130,926.01 128,331.00 111,677.30 78,360.00 76,400.48 \r\n \r\n156.97% 163.72% 161.14% 165.58% 203.45% 177.18% 166.57% \r\n \r\n76.21% 76.74% 76.68% 76.33% 72.34% 76.20% 77.99% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 47 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \r\nSCHEDULE OF CONTRIBUTIONS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \r\n \r\nSCHEDULE \"4\" \r\n \r\nFor the Year Ended June 30 \r\n \r\nContractually required contribution \r\n \r\nContributions in relation to the contractually required contribution \r\n \r\nContribution deficiency (excess) \r\n \r\nSchool District's covered payroll \r\n \r\nContribution as a percentage of covered payroll \r\n \r\n2021 \r\n \r\n$ \r\n \r\n2020 \r\n \r\n$ \r\n \r\n2019 \r\n \r\n$ \r\n \r\n2018 \r\n \r\n$ \r\n \r\n2017 \r\n \r\n$ \r\n \r\n2016 \r\n \r\n$ \r\n \r\n2015 \r\n \r\n$ \r\n \r\n2014 \r\n \r\n$ \r\n \r\n2013 \r\n \r\n$ \r\n \r\n2012 \r\n \r\n$ \r\n \r\n43,418.88 $ 51,023.36 $ 44,658.15 $ 32,475.72 $ 31,838.88 $ 27,606.43 $ 17,207.88 $ 14,104.00 $ 11,306.36 $ \r\n2,581.12 $ \r\n \r\n43,418.88 $ 51,023.36 $ 44,658.15 $ 32,475.72 $ 31,838.88 $ 27,606.43 $ 17,207.88 $ 14,104.00 $ 11,306.36 $ \r\n2,581.12 $ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n176,070.11 206,943.46 180,218.56 130,926.01 128,331.00 \r\n111,677.30 78,360.00 76,400.48 75,872.88 22,193.64 \r\n \r\n24.66% 24.66% 24.78% 24.81% 24.81% 24.72% 21.96% 18.46% 14.90% 11.63% \r\n \r\n- 48 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA \r\n \r\nSCHEDULE \"5\" \r\n \r\nFor the Year Ended \r\nJune 30 \r\n \r\nSchool District's proportion of the Net Pension Liability (NPL) \r\n \r\nSchool District's proportionate share of the NPL \r\n \r\nState of Georgia's proportionate \r\nshare of the NPL associated with the School District \r\n \r\nTotal \r\n \r\nSchool District's covered payroll \r\n \r\nSchool District's proportionate share of the NPL as a percentage of its covered \r\npayroll \r\n \r\nPlan fiduciary net position as a percentage \r\nof the total pension liability \r\n \r\n2021 2020 2019 2018 2017 2016 2015 \r\n \r\n0.00% $ 0.00% $ 0.00% $ 0.00% $ 0.00% $ 0.00% $ 0.00% $ \r\n \r\n- \r\n \r\n$ \r\n \r\n563,934.00 $ 563,934.00 $ 1,569,655.68 \r\n \r\n- \r\n \r\n$ \r\n \r\n553,552.00 $ 553,552.00 $ 1,712,200.77 \r\n \r\n- \r\n \r\n$ \r\n \r\n565,141.00 $ \r\n \r\n565,141.00 $ 1,883,260.87 \r\n \r\n- \r\n \r\n$ \r\n \r\n551,379.00 $ 551,379.00 $ 1,810,170.59 \r\n \r\n- \r\n \r\n$ \r\n \r\n762,372.00 $ 762,372.00 $ 1,791,780.27 \r\n \r\n- \r\n \r\n$ \r\n \r\n485,473.00 $ 485,473.00 $ 1,790,955.74 \r\n \r\n- \r\n \r\n$ 443,309.00 $ 443,309.00 $ 1,692,625.17 \r\n \r\nN/A \r\n \r\n84.45% \r\n \r\nN/A \r\n \r\n85.02% \r\n \r\nN/A \r\n \r\n85.26% \r\n \r\nN/A \r\n \r\n85.69% \r\n \r\nN/A \r\n \r\n81.00% \r\n \r\nN/A \r\n \r\n87.00% \r\n \r\nN/A \r\n \r\n88.29% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 49 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET OPEB LIABILITY \r\nSCHOOL OPEB FUND \r\n \r\nSCHEDULE \"6\" \r\n \r\nFor the Year Ended \r\nJune 30 \r\n \r\nSchool District's proportion of the Net OPEB Liability (NOL) \r\n \r\nSchool District's proportionate share of the NOL \r\n \r\nState of Georgia's proportionate share of the NOL associated with the School \r\nDistrict \r\n \r\nTotal \r\n \r\nSchool District's covered- \r\nemployee payroll \r\n \r\nSchool District's proportionate share of the \r\nNOL as a percentage of \r\nits coveredemployee payroll \r\n \r\nPlan fiduciary net position as a percentage of the total \r\nOPEB liability \r\n \r\n2021 2020 2019 2018 \r\n \r\n0.395104% $ 58,031,576.00 $ 0.391779% $ 48,079,689.00 $ 0.396941% $ 50,449,983.00 $ 0.402911% $ 56,608,834.00 $ \r\n \r\n- \r\n \r\n$ 58,031,576.00 $ 36,339,858.85 \r\n \r\n- \r\n \r\n$ 48,079,689.00 $ 32,761,391.83 \r\n \r\n- \r\n \r\n$ 50,449,983.00 $ 32,469,171.98 \r\n \r\n- \r\n \r\n$ 56,608,834.00 $ 31,880,339.52 \r\n \r\n159.69% 146.76% 155.38% 177.57% \r\n \r\n3.99% 4.63% 2.93% 1.61% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 50 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \r\nSCHEDULE OF CONTRIBUTIONS SCHOOL OPEB FUND \r\n \r\nSCHEDULE \"7\" \r\n \r\nFor the Year Ended June 30 \r\n \r\nContractually required contribution \r\n \r\nContributions in relation to the contractually required \r\ncontribution \r\n \r\nContribution deficiency (excess) \r\n \r\nSchool District's covered-employee \r\npayroll \r\n \r\nContribution as a percentage of \r\ncovered-employee payroll \r\n \r\n2021 \r\n \r\n$ \r\n \r\n1,509,114.00 $ \r\n \r\n2020 \r\n \r\n$ \r\n \r\n1,336,150.00 $ \r\n \r\n2019 \r\n \r\n$ \r\n \r\n2,110,001.00 $ \r\n \r\n2018 \r\n \r\n$ \r\n \r\n2,057,312.00 $ \r\n \r\n2017 \r\n \r\n$ \r\n \r\n2,100,811.00 $ \r\n \r\n1,509,114.00 $ 1,336,150.00 $ 2,110,001.00 $ 2,057,312.00 $ 2,100,811.00 $ \r\n \r\n- \r\n \r\n$ 37,827,087.46 \r\n \r\n- \r\n \r\n$ 36,339,858.85 \r\n \r\n- \r\n \r\n$ 32,761,391.83 \r\n \r\n- \r\n \r\n$ 32,469,171.98 \r\n \r\n- \r\n \r\n$ 31,880,339.52 \r\n \r\n3.99% 3.68% 6.44% 6.34% 6.59% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 51 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN THE NET POSITION LIABILITY AND RELATED RATIOS \r\nSOCIAL SECURITY REPLACEMENT PLAN YEAR ENDING DECEMBER 31 \r\n \r\nTotal Pension Liability Service Cost Interest Differences Between Expected and Actual Experience Change of Assumptions Benefit Payments \r\nNet Change in Total Pension Liability \r\nTotal Pension Liability - beginning \r\nTotal Pension Liability - ending (a) \r\n \r\n2021 \r\n \r\n2020 \r\n \r\n2019 \r\n \r\n$ \r\n \r\n196,414.00 $ \r\n \r\n200,141.00 $ \r\n \r\n205,015.00 $ \r\n \r\n436,782.00 \r\n \r\n429,921.00 \r\n \r\n424,569.00 \r\n \r\n74,724.00 \r\n \r\n(21,491.00) \r\n \r\n(128,097.00) \r\n \r\n474,227.00 \r\n \r\n177,923.00 \r\n \r\n(149,027.00) \r\n \r\n(375,690.00) \r\n \r\n(358,105.00) \r\n \r\n(333,310.00) \r\n \r\n806,457.00 \r\n \r\n428,389.00 \r\n \r\n19,150.00 \r\n \r\n8,243,549.00 \r\n \r\n7,815,160.00 \r\n \r\n7,796,010.00 \r\n \r\n$ 9,050,006.00 $ 8,243,549.00 $ \r\n \r\n7,815,160.00 $ \r\n \r\nPlan Fiduciary Net Position Contributions - Employer Net Investment Income Benefit Payments Administrative Expenses Due to Broker \r\n \r\n$ \r\n \r\n336,514.00 $ \r\n \r\n335,053.00 $ \r\n \r\n332,646.00 $ \r\n \r\n503,539.00 \r\n \r\n684,749.00 \r\n \r\n(271,717.00) \r\n \r\n(375,690.00) \r\n \r\n(358,105.00) \r\n \r\n(333,310.00) \r\n \r\n(9,949.00) \r\n \r\n(22,682.00) \r\n \r\n(21,147.00) \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\nNet change in Plan Fiduciary Net Position \r\n \r\n454,414.00 \r\n \r\n639,015.00 \r\n \r\n(293,528.00) \r\n \r\nPlan Fiduciary Net Position - beginning Plan Fiduciary Net Position - ending (b) \r\n \r\n4,491,451.00 \r\n \r\n3,852,436.00 \r\n \r\n4,145,964.00 \r\n \r\n$ 4,945,865.00 $ 4,491,451.00 $ 3,852,436.00 $ \r\n \r\nNet Pension Liability - ending (a - b) \r\n \r\n$ \r\n \r\n4,104,141.00 $ 3,752,098.00 $ 3,962,724.00 $ \r\n \r\nPlan Fiduciary Net Position as a percentage of the Total Pension Liability \r\n \r\n54.65% \r\n \r\n54.48% \r\n \r\n49.29% \r\n \r\nCovered-Employee Payroll \r\n \r\n$ \r\n \r\nNet Pension Liability as percentage of Covered-Employee \r\n \r\n2,110,591.00 $ 2,290,640.00 $ 2,347,678.00 $ \r\n \r\n194.45% \r\n \r\n163.80% \r\n \r\n168.79% \r\n \r\nSCHEDULE \"8\" \r\n2018 202,546.00 416,164.00 (63,999.00) \r\n128,319.00 (332,304.00) 350,726.00 7,445,284.00 7,796,010.00 \r\n335,798.00 392,875.00 (332,304.00) (24,030.00) \r\n372,339.00 3,773,625.00 4,145,964.00 3,650,046.00 \r\n53.18% 2,416,621.00 \r\n151.04% \r\n \r\n- 52 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN THE NET POSITION LIABILITY AND RELATED RATIOS \r\nSOCIAL SECURITY REPLACEMENT PLAN YEAR ENDING DECEMBER 31 \r\n \r\nSCHEDULE \"8\" \r\n \r\nTotal Pension Liability \r\n \r\nService Cost \r\n \r\n$ \r\n \r\nInterest \r\n \r\nDifferences Between Expected and Actual Experience \r\n \r\nChange of Assumptions \r\n \r\nBenefit Payments \r\n \r\nNet Change in Total Pension Liability \r\n \r\nTotal Pension Liability - beginning \r\n \r\nTotal Pension Liability - ending (a) \r\n \r\n$ \r\n \r\nPlan Fiduciary Net Position \r\n \r\nContributions - Employer \r\n \r\n$ \r\n \r\nNet Investment Income \r\n \r\nBenefit Payments \r\n \r\nAdministrative Expenses \r\n \r\nDue to Broker \r\n \r\nNet change in Plan Fiduciary Net Position \r\n \r\nPlan Fiduciary Net Position - beginning \r\n \r\nPlan Fiduciary Net Position - ending (b) \r\n \r\n$ \r\n \r\nNet Pension Liability - ending (a - b) \r\n \r\n$ \r\n \r\nPlan Fiduciary Net Position as a percentage of the Total Pension Liability \r\n \r\nCovered-Employee Payroll \r\n \r\n$ \r\n \r\nNet Pension Liability as percentage of Covered-Employee \r\n \r\n2017 \r\n211,474.00 $ 393,557.00 70,820.00 (153,139.00) (321,825.00) \r\n200,887.00 \r\n7,244,397.00 \r\n7,445,284.00 $ \r\n \r\n2016 \r\n252,078.00 $ 357,947.00 \r\n62,585.00 (61,902.00) (294,805.00) \r\n315,903.00 \r\n6,928,494.00 \r\n7,244,397.00 $ \r\n \r\n349,969.00 $ 238,741.00 (321,825.00) (21,220.00) \r\n(1,113.00) \r\n244,552.00 \r\n3,529,073.00 \r\n3,773,625.00 $ \r\n3,671,659.00 $ \r\n \r\n315,891.00 $ (20,197.00) (294,805.00) (29,660.00) \r\n(1,229.00) \r\n(30,000.00) \r\n3,559,073.00 \r\n3,529,073.00 $ \r\n3,715,324.00 $ \r\n \r\n50.68% 2,377,259.00 $ \r\n154.45% \r\n \r\n48.71% 2,600,407.00 $ \r\n142.87% \r\n \r\n2015 \r\n \r\n2014 \r\n \r\n203,802.00 $ 378,679.00 (446,217.00) 471,960.00 (244,169.00) \r\n \r\n164,756.00 363,955.00 \r\n251,101.00 832,322.00 (221,185.00) \r\n \r\n364,055.00 \r\n \r\n1,390,949.00 \r\n \r\n6,564,439.00 \r\n \r\n5,173,490.00 \r\n \r\n6,928,494.00 $ 6,564,439.00 \r\n \r\n310,889.00 $ 147,675.00 (244,169.00) (25,205.00) \r\n(4,493.00) \r\n \r\n304,253.00 473,233.00 (221,185.00) (23,094.00) \r\n(242.00) \r\n \r\n184,697.00 \r\n \r\n532,965.00 \r\n \r\n3,374,376.00 \r\n \r\n2,841,411.00 \r\n \r\n3,559,073.00 $ 3,374,376.00 \r\n \r\n3,369,421.00 $ 3,190,063.00 \r\n \r\n51.37% \r\n \r\n51.40% \r\n \r\n2,562,945.00 $ 2,726,676.00 \r\n \r\n131.47% \r\n \r\n117.00% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 53 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \r\nSCHEDULE OF CONTRIBUTIONS SOCIAL SECURITY REPLACEMENT PLAN \r\nFOR THE YEAR END DECEMBER 31 \r\n \r\nSCHEDULE \"9\" \r\n \r\nFor the Year \r\n \r\nActual determined contribution \r\n \r\nContributions in relation to the contractually required contribution \r\n \r\nContribution deficiency (excess) \r\n \r\nSchool District's covered payroll \r\n \r\nContribution as a percentage of covered payroll \r\n \r\n2021 \r\n \r\n$ \r\n \r\n2020 \r\n \r\n$ \r\n \r\n2019 \r\n \r\n$ \r\n \r\n2018 \r\n \r\n$ \r\n \r\n2017 \r\n \r\n$ \r\n \r\n2016 \r\n \r\n$ \r\n \r\n2015 \r\n \r\n$ \r\n \r\n2014 \r\n \r\n$ \r\n \r\n336,514.00 $ 335,053.00 $ 332,646.00 $ 335,798.00 $ 328,611.00 $ 315,891.00 $ 310,889.00 $ 304,253.00 $ \r\n \r\n336,514.00 $ 335,053.00 $ 332,646.00 $ 335,798.00 $ 349,969.00 $ 315,891.00 $ 310,889.00 $ 304,253.00 $ \r\n \r\n- \r\n \r\n$ \r\n \r\n2,110,591.00 \r\n \r\n- \r\n \r\n$ 2,290,640.00 \r\n \r\n- \r\n \r\n$ 2,347,678.00 \r\n \r\n- \r\n \r\n$ \r\n \r\n2,416,621.00 \r\n \r\n(21,358.00) $ 2,377,259.00 \r\n \r\n- \r\n \r\n$ 2,600,407.00 \r\n \r\n- \r\n \r\n$ 2,562,945.00 \r\n \r\n- \r\n \r\n$ 2,726,676.00 \r\n \r\n15.94% 14.63% 14.17% 13.90% 14.72% 12.15% 12.13% 11.16% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 54 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \r\nSCHEDULE OF INVESTMENT RETURNS SOCIAL SECURITY REPLACEMENT PLAN \r\nFOR THE YEAR END DECEMBER 31 \r\n \r\nYear Ended \r\n2021 2020 2019 2018 2017 2016 2015 2014 \r\n \r\nAnnual Money - Weighted Rate of Return, Net of Investment Expense \r\n11.52% 18.47% (6.73)% 10.88% 7.04% (0.59)% 4.55% 17.25% \r\n \r\nSCHEDULE \"10\" \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 55 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION \r\nFOR THE YEAR ENDED JUNE 30, 2021 \r\n \r\nSCHEDULE \"11\" \r\n \r\nTeachers Retirement System Changes 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. \r\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 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). \r\n \r\nOn May 15, 2019, the Board adopted recommended changes from the smoothed valuation interest rate methodology that has been in effect since June 30, 2009, to a constant interest rate method. In conjunction with the methodology, the long-term assumed rate of return in assets (discount rate) has been changed from 7.50% to 7.25%, and the assumed annual rate of inflation has been reduced from 2.75% to 2.50%. \r\n \r\nIn 2019 and later, the expectation of retired life mortality was changed to the Pub-2010 Teacher Headcount Weighted Below Median Healthy Retiree mortality table from the RP-2000 Mortality Tables. In 2019, rates of withdrawal, retirement, disability and mortality were adjusted to more closely reflect actual experience. \r\nEmployees' Retirement System Changes 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, and a one-time 3% payment was granted to certain retirees and beneficiaries effective July 2017. Two one-time 2% payments were granted to certain retirees and beneficiaries effective July 2018 and January 2019. Two onetime 3% payments were granted to certain retirees and beneficiaries effective July 2019 and January 2020. \r\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, withdrawal and salary increases. \r\n \r\nOn 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. The assumed investment rate of return remained at 7.30% for the June 30, 2019 actuarial valuation. \r\nPublic School Employees Retirement System Changes of benefit terms: The member contribution rate was increased from $4.00 to $10.00 per month for members joining the System on or after July 1, 2012. The monthly benefit accrual rate was increased from $14.75 to $15.00 per year of credible service effective July 1, 2017. The monthly benefit accrual was increased from $15.00 to $15.25 per year of credible service effective July 1, 2018. The monthly benefit accrual was increased from $15.25 to $15.50 per year of credible service effective July 1, 2019. A 2% cost-of-living adjustment (COLA) was granted to certain retirees and beneficiaries effective July 2016, another July 2017, and another July 2018. Two 1.5% COLAs were granted to certain retirees and beneficiaries effective July 2019 and January 2020. \r\nChanges of assumptions: In 2010 and later, the expectation of retired life mortality was changed to the RP-2000 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. \r\n \r\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 RP-2000 Blue Collar Mortality Table projected to 2025 with projection scale BB (set forward 3 years for males and 2 years for females). \r\n \r\nOn 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. The assumed investment rate of return remained at 7.30% for the June 30, 2019 valuation. \r\n \r\n- 56 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION \r\nFOR THE YEAR ENDED JUNE 30, 2021 \r\n \r\nSCHEDULE \"11\" \r\n \r\nSchool OPEB Fund Changes of benefit terms: There have been no changes in benefit terms. \r\nChanges in assumptions : 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 State OPEB fund based on their last employer payroll location; irrespective of retirement affiliation. \r\nThe June 30, 2019 decremental valuation were changed to reflect the Teachers Retirement Systems experience study. \r\nThe discount rate was updated from 3.07% as of June 30, 2016 to 3.58% as of June 30, 2017 to 3.87% as of June 30, 2018, to 3.58% as of June 30, 2019, and to 2.22% as of June 30, 2020. \r\n \r\nSocial Security Replacement Plan Changes of assumptions: There were no changes in benefits that affected the measurement of the total pension liability since the prior measurement date. However, in 2020 the amounts reported as changes in assumptions resulted from an decrease in the discount rate \r\nfrom 5.30% to 4.83% since the prior measurement date. \r\n \r\nMethod and assumptions used in calculations of actuarially determined contributions: The actuarially determined contribution rates in the schedule of contributions are calculated as of January 1, 2021. The following actuarial methods and assumptions were used to determine the contractually required contributions for year ended June 30, 2021 reported in that schedule: \r\n \r\nValuation date Actuarial cost method Amortization method Remaining amortization period Asset valuation Method \r\nInflation rate Salary increases Investment rate of return \r\n \r\nJanuary 1, 2020 Entry Age Level percentage of payroll 18 years Method recognized a portion of the difference between the market value of assets and expected actuarial value of assets, based on the assumed interest rate of return. The amount recognized each year is 20% of the difference between market value and expected actuarial value. 2.50% 3.00% per annum 7.00%, net of pension plan investment \r\n \r\n- 57 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT GENERAL FUND \r\nSCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL \r\nYEAR ENDED JUNE 30, 2021 \r\n \r\nSCHEDULE \"12\" \r\n \r\nREVENUES Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous Total Revenues \r\nEXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Enterprise Operations Food Services Operation Total Expenditures \r\nExcess of Revenues over (under) Expenditures \r\nOTHER FINANCING SOURCES (USES) Other Sources Other Uses Total Other Financing Sources (Uses) Net Change in Fund Balances \r\nFund Balances - Beginning \r\nAdjustments \r\nFund Balances - Ending \r\n \r\nNONAPPROPRIATED BUDGETS \r\n \r\nORIGINAL (1) \r\n \r\nFINAL (1) \r\n \r\n$ \r\n \r\n13,035,000.00 $ \r\n \r\n13,035,000.00 $ \r\n \r\n- \r\n \r\n- \r\n \r\n50,656,755.71 \r\n \r\n51,489,322.49 \r\n \r\n6,984,589.12 \r\n \r\n31,240,987.23 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n250,000.00 \r\n \r\n250,000.00 \r\n \r\n70,926,344.83 \r\n \r\n96,015,309.72 \r\n \r\n57,549,843.77 \r\n2,250,532.51 1,468,368.28 1,130,560.89 \r\n968,055.96 4,627,411.95 1,145,488.56 7,331,483.50 2,981,674.07 205,755.66 \r\n43,494.00 - \r\n5,647,579.90 85,350,249.05 (14,423,904.22) \r\n \r\n76,424,946.50 \r\n5,463,171.46 2,898,996.24 1,232,397.67 \r\n982,223.96 5,328,763.95 \r\n1,151,576.56 7,836,531.50 4,312,231.07 206,770.66 \r\n49,038.42 - \r\n6,849,280.05 112,735,928.04 (16,720,618.32) \r\n \r\n(350,000.00) (350,000.00) (14,773,904.22) \r\n \r\n267,857.00 (628,283.67) (360,426.67) (17,081,044.99) \r\n \r\n23,883,749.59 \r\n \r\n23,883,749.59 \r\n \r\n64,649.58 \r\n \r\n- \r\n \r\n$ \r\n \r\n9,174,494.95 $ \r\n \r\n6,802,704.60 $ \r\n \r\nACTUAL AMOUNTS \r\n \r\nVARIANCE OVER/UNDER \r\n \r\n17,564,256.45 $ 339,372.83 \r\n54,644,802.51 15,235,151.17 1,776,872.54 4,194.33 1,329,929.00 \r\n90,894,578.83 \r\n \r\n4,529,256.45 339,372.83 \r\n3,155,480.02 (16,005,836.06) \r\n1,776,872.54 4,194.33 \r\n1,079,929.00 (5,120,730.89) \r\n \r\n58,328,875.72 \r\n3,885,922.58 1,400,131.26 1,232,392.87 1,180,624.02 4,671,353.83 1,051,991.00 7,157,577.89 3,517,252.99 178,691.07 102,343.19 94,605.78 4,918,325.88 \r\n87,720,088.08 3,174,490.75 \r\n \r\n18,096,070.78 \r\n1,577,248.88 1,498,864.98 \r\n4.80 (198,400.06) \r\n657,410.12 99,585.56 678,953.61 794,978.08 28,079.59 (53,304.77) (94,605.78) 1,930,954.17 25,015,839.96 19,895,109.07 \r\n \r\n3,174,490.75 \r\n23,925,577.91 \r\n- \r\n27,100,068.66 $ \r\n \r\n(267,857.00) 628,283.67 360,426.67 20,255,535.74 \r\n41,828.32 \r\n- \r\n20,297,364.06 \r\n \r\nNotes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual \r\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 $1,764,240.69 and $1,621,352.96, respectively. \r\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. \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 58 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \r\nYEAR ENDED JUNE 30, 2021 \r\n \r\nSCHEDULE \"13\" \r\n \r\nFUNDING AGENCY PROGRAM/GRANT \r\nAgriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program Total U.S. Department of Agriculture \r\nEducation, U. S. Department of Education Stabilization Fund Pass-Through From Georgia Department of Education COVID-19 - Elementary and Secondary School Emergency Relief Fund COVID-19 - Elementary and Secondary School Emergency Relief Fund COVID-19 - American Rescue Plan Elementary and Secondary School Emergency Relief Fund Total Education Stabilization Fund \r\nSpecial Education Cluster Pass-Through From Georgia Department of Education Special Education Grants to States Grants to States Preschool Grants Preschool Grants Total Special Education Cluster \r\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 Rural Education Rural Education Student Support and Academic Enrichment Program Student Support and Academic Enrichment Program Supporting Effective Instruction State Grants Title I Grants to Local Educational Agencies Title I Grants to Local Educational Agencies Total Other Programs Total U. S. Department of Education \r\nHealth and Human Services, U. S. Department of Pass-Through From Bright From the Start Georgia Department of Early Care and Learning COVID-19 - Child Care and Development Block Grant \r\nTotal Expenditures of Federal Awards \r\n \r\nASSISTANCE LISTING NUMBER \r\n \r\nPASSTHROUGH \r\nENTITY ID \r\nNUMBER \r\n \r\nEXPENDITURES IN PERIOD \r\n \r\n10.553 10.555 \r\n \r\n215GA324N1199 $ 215GA324N1199 \r\n \r\n1,991,212.36 2,716,065.36 4,707,277.72 \r\n \r\n84.425D 84.425D \r\n84.425U \r\n \r\nS425D200012 S425D210012 \r\nS425U210012 \r\n \r\n1,708,282.57 1,570,686.91 \r\n4,407.48 3,283,376.96 \r\n \r\n84.027A 84.027A 84.173A 84.173A \r\n \r\nH027A190073 H027A200073 H173A190081 H173A200081 \r\n \r\n222,557.00 1,360,487.67 \r\n41,872.00 17,228.42 1,642,145.09 \r\n \r\n84.048A 84.365A 84.365A 84.358B 84.358B 84.424A 84.424A 84.367A 84.010A 84.010A \r\n \r\nV048A200010 S365A190010 S365A200010 S365B190010 S365B200010 S424A190011 S424A200011 S367A200001 S010A190010 S010A200010-20A \r\n \r\n112,670.00 7,401.00 \r\n72,374.92 39,687.00 135,331.44 63,278.24 151,935.75 152,246.26 624,675.00 2,524,371.48 3,883,971.09 8,809,493.14 \r\n \r\n93.575 \r\n \r\n2100GACCCS $ \r\n \r\n30,435.00 13,547,205.86 \r\n \r\n- 59 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \r\nYEAR ENDED JUNE 30, 2021 \r\n \r\nSCHEDULE \"13\" \r\n \r\nNotes to the Schedule of Expenditures of Federal Awards \r\nNote 1. Basis of Presentation \r\nThe accompanying schedule of expenditures of federal awards (the \"Schedule\") includes the federal award activity of the Polk County School District (the \"Board\") under programs of the federal government for the year ended June 30, 2021. 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. \r\nNote 2. Summary of Significant Accounting Policies \r\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. \r\nNote 3. Indirect Cost Rate \r\nThe Board has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 60 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2021 \r\n \r\nSCHEDULE \"14\" \r\n \r\nAGENCY/FUNDING \r\n \r\nGRANTS \r\n \r\nBright From the Start: \r\n \r\nGeorgia Department of Early Care and Learning \r\n \r\nPre-Kindergarten Program \r\n \r\n$ \r\n \r\nEducation, Georgia Department of \r\n \r\nQuality Basic Education \r\n \r\nDirect Instructional Cost \r\n \r\nKindergarten Program \r\n \r\nKindergarten Program - Early Intervention Program \r\n \r\nPrimary Grades (1-3) Program \r\n \r\nPrimary Grades - Early Intervention (1-3) Program \r\n \r\nUpper Elementary Grades (4-5) Program \r\n \r\nUpper Elementary Grades - Early Intervention (4-5) Program \r\n \r\nMiddle School (6-8) Program \r\n \r\nHigh School General Education (9-12) Program \r\n \r\nVocational Laboratory (9-12) Program \r\n \r\nStudents with Disabilities \r\n \r\nGifted Student - Category VI \r\n \r\nRemedial Education Program \r\n \r\nAlternative Education Program \r\n \r\nEnglish Speakers of Other Languages (ESOL) \r\n \r\nMedia Center Program \r\n \r\n20 Days Additional Instruction \r\n \r\nStaff and Professional Development \r\n \r\nPrincipal Staff and Professional Development \r\n \r\nIndirect Cost \r\n \r\nCentral Administration \r\n \r\nSchool Administration \r\n \r\nFacility Maintenance and Operations \r\n \r\nMid-term Adjustment Hold-Harmless \r\n \r\nAmended Formula Adjustment \r\n \r\nCategorical Grants \r\n \r\nPupil Transportation \r\n \r\nRegular \r\n \r\nBus Replacement \r\n \r\nNursing Services \r\n \r\nEducation Equalization Funding Grant \r\n \r\nOther State Programs \r\n \r\nFood Services \r\n \r\nHygiene Products \r\n \r\nMath and Science Supplements \r\n \r\nPreschool Disability Services \r\n \r\nPupil Transportation - State Bonds \r\n \r\nResidential Treatment Centers Grant \r\n \r\nSchool Safety Grant \r\n \r\nTeachers Retirement \r\n \r\nVocational Education \r\n \r\nVocational Supervisors \r\n \r\nGeorgia Emergency Management Agency \r\n \r\nDonations to LEA for COVID \r\n \r\nGeorgia State Financing and Investment Commission \r\n \r\nReimbursement on Construction Projects \r\n \r\nOffice of the State Treasurer \r\n \r\nPublic School Employees Retirement \r\n \r\nCONTRACT \r\n \r\nHuman Resources, Georgia Department of \r\n \r\nFamily Connections \r\n \r\n$ \r\n \r\nGOVERNMENTAL FUND TYPES \r\n \r\nGENERAL FUND \r\n \r\nCAPITAL PROJECTS FUND \r\n \r\n1,411,463.24 $ \r\n \r\n- $ \r\n \r\n2,543,588.00 269,654.00 6,101,231.00 804,058.00 \r\n3,154,032.00 350,903.00 5,841,198.00 \r\n4,643,543.00 1,913,286.00 7,195,682.00 1,400,822.00 \r\n551,195.00 409,252.00 1,029,234.00 952,360.00 295,340.00 166,852.00 \r\n3,291.00 \r\n1,110,684.00 1,973,433.00 2,017,998.00 1,122,863.00 (1,425,113.00) \r\n811,064.00 308,880.00 165,392.00 7,851,861.00 \r\n135,204.00 5,420.00 \r\n38,605.00 215,139.00 231,660.00 487,680.96 24,905.99 33,519.02 163,158.00 27,298.00 \r\n147,471.49 \r\n- \r\n108,231.00 \r\n52,463.81 \r\n54,644,802.51 $ \r\n \r\n- \r\n- \r\n- \r\n- \r\n- \r\n554,990.07 \r\n- \r\n- \r\n554,990.07 $ \r\n \r\nTOTAL \r\n1,411,463.24 \r\n2,543,588.00 269,654.00 6,101,231.00 804,058.00 \r\n3,154,032.00 350,903.00 5,841,198.00 \r\n4,643,543.00 1,913,286.00 7,195,682.00 1,400,822.00 \r\n551,195.00 409,252.00 1,029,234.00 952,360.00 295,340.00 166,852.00 \r\n3,291.00 \r\n1,110,684.00 1,973,433.00 2,017,998.00 1,122,863.00 (1,425,113.00) \r\n811,064.00 308,880.00 165,392.00 7,851,861.00 \r\n135,204.00 5,420.00 \r\n38,605.00 215,139.00 231,660.00 487,680.96 24,905.99 33,519.02 163,158.00 27,298.00 \r\n147,471.49 \r\n554,990.07 \r\n108,231.00 \r\n52,463.81 \r\n55,199,792.58 \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 61 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \r\nYEAR ENDED JUNE 30, 2021 \r\n \r\nSCHEDULE \"15\" \r\n \r\nPROJECT \r\nSPLOST V \r\nConstruction, remodeling, improving, and equipping of existing facilities including Cedartown High School, Rockmart High School, Westside Elementary School and Eastside Elementary School. \r\nSPLOST VI For the purposes acquiring, constructing, and equipping the following capital projects: Elementary school classroom additions and related facilities, roofing and air conditioning HVAC improvements, track resurfacing at Rockmart and Cedartown High Schools, gym renovations at Rockmart High School, parking lots and access roads, equipment and furnishings, technology devices, and physical education and athletic equipment; System-wide instructional and administrative technology/infrastructure; Cedartown High School Fine Arts building with the expansion of and improvements to band and drama facilities, college and career facilities, and expansions to administrative offices; Rockmart High agriculture barn/learning center and college and career facilities; System-wide safety and security systems and equipment; Press box at Rockmart High School; Concession Stand-Rockmart High School/Rockmart Middle; Purchasing school buses; Rockmart Middle School field house; Purchasing vocational, fine arts and cafeteria equipment; Purchasing textbooks; Acquiring real and personal property necessary or to be used for the foregoing purposes; All other general purposes related to these capital outlay projects; and 2017 bond issuance costs. \r\nTotal SPLOST VI \r\nTotal \r\n \r\nORIGINAL ESTIMATED \r\nCOST (1) \r\n \r\nCURRENT ESTIMATED COSTS (2) \r\n \r\nESTIMATED COMPLETION \r\nDATE \r\n \r\n$ \r\n \r\n300,000.00 $ \r\n \r\n3,908,385.61 \r\n \r\nComplete \r\n \r\n11,644,647.02 1,750,000.00 \r\n \r\n7,817,792.97 1,000,000.00 \r\n \r\n6/30/2026 6/30/2026 \r\n \r\n6,850,682.01 \r\n \r\n8,987,577.43 \r\n \r\n1,276,159.00 284,750.00 480,000.00 274,002.00 889,000.00 \r\n- \r\n \r\n1,297,842.65 350,000.00 444,547.00 \r\n33,741.36 889,000.00 \r\n198,749.99 - \r\n \r\n301,142.00 \r\n925,008.00 324,609.97 25,000,000.00 \r\n \r\n368,746.78 \r\n800,000.00 327,834.97 \r\n22,515,833.15 \r\n \r\n$ 25,300,000.00 $ 26,424,218.76 \r\n \r\nComplete \r\nComplete 6/30/2022 Complete Complete 6/30/2024 Complete \r\nComplete \r\n6/30/2022 6/30/2026 \r\n \r\n- 62 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \r\nYEAR ENDED JUNE 30, 2021 \r\n \r\nSCHEDULE \"15\" \r\n \r\nPROJECT \r\n \r\nAMOUNT EXPENDED IN CURRENT YEAR (3) (4) \r\n \r\nAMOUNT EXPENDED IN PRIOR YEARS (3) (4) \r\n \r\nTOTAL COMPLETION \r\nCOST \r\n \r\nEXCESS PROCEEDS NOT \r\nEXPENDED \r\n \r\nSPLOST V \r\n \r\nConstruction, remodeling, improving, and equipping of existing \r\n \r\nfacilities including Cedartown High School, Rockmart High School, \r\n \r\nWestside Elementary School and Eastside Elementary School. \r\n \r\n$ 2,609,956.56 $ \r\n \r\n1,298,429.05 $ 3,908,385.61 $ \r\n \r\n- \r\n \r\nSPLOST VI \r\n \r\nFor the purposes acquiring, constructing, and equipping the \r\n \r\nfollowing capital projects: \r\n \r\nElementary school classroom additions and related facilities, roofing \r\n \r\nand air conditioning HVAC improvements, track resurfacing at \r\n \r\nRockmart and Cedartown High Schools, gym renovations at \r\n \r\nRockmart High School, parking lots and access roads, equipment \r\n \r\nand furnishings, technology devices, and physical education and \r\n \r\nathletic equipment; \r\n \r\n832,294.46 \r\n \r\n3,343,439.87 \r\n \r\n- \r\n \r\n- \r\n \r\nSystem-wide instructional and administrative \r\n \r\ntechnology/infrastructure; \r\n \r\n41,760.00 \r\n \r\n943,938.38 \r\n \r\n- \r\n \r\n- \r\n \r\nCedartown High School Fine Arts building with the expansion of \r\n \r\nand improvements to band and drama facilities, college and career \r\n \r\nfacilities, and expansions to administrative offices; \r\n \r\n85,530.07 \r\n \r\n8,902,047.36 \r\n \r\n8,987,577.43 \r\n \r\n- \r\n \r\nRockmart High agriculture barn/learning center and college and \r\n \r\ncareer facilities; \r\n \r\n- \r\n \r\n1,297,842.65 \r\n \r\n1,297,842.65 \r\n \r\n- \r\n \r\nSystem-wide safety and security systems and equipment; \r\n \r\n- \r\n \r\n320,789.48 \r\n \r\n- \r\n \r\n- \r\n \r\nPress box at Rockmart High School; \r\n \r\n- \r\n \r\n444,547.00 \r\n \r\n444,547.00 \r\n \r\n- \r\n \r\nConcession Stand-Rockmart High School/Rockmart Middle; \r\n \r\n- \r\n \r\n33,741.36 \r\n \r\n33,741.36 \r\n \r\n- \r\n \r\nPurchasing school buses; \r\n \r\n177,800.00 \r\n \r\n355,600.00 \r\n \r\n- \r\n \r\n- \r\n \r\nRockmart Middle School field house; \r\n \r\n- \r\n \r\n198,749.99 \r\n \r\n198,749.99 \r\n \r\n- \r\n \r\nPurchasing vocational, fine arts and cafeteria equipment; \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\nPurchasing textbooks; \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\nAcquiring real and personal property necessary or to be used for \r\n \r\nthe foregoing purposes; \r\n \r\n- \r\n \r\n368,746.78 \r\n \r\n368,746.78 \r\n \r\n- \r\n \r\nAll other general purposes related to these capital outlay projects; \r\n \r\nand \r\n \r\n69,055.74 \r\n \r\n703,372.68 \r\n \r\n- \r\n \r\n- \r\n \r\n2017 bond issuance costs. \r\n \r\n1,075.00 \r\n \r\n326,759.97 \r\n \r\n- \r\n \r\n- \r\n \r\nTotal SPLOST VI \r\n \r\n1,207,515.27 \r\n \r\n17,239,575.52 \r\n \r\n11,331,205.21 \r\n \r\n- \r\n \r\nTotal \r\n \r\n$ 3,817,471.83 $ 18,538,004.57 $ 15,239,590.82 $ \r\n \r\n- \r\n \r\n(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax. (2) The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion. (3) The voters of Polk County approved the imposition of a 1% sales tax to fund the above projects and retire associated debt. \r\nAmounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the projects. (4) In addition to the expenditures shown above, the School District has incurred interest to provide advance funding as follows: \r\n \r\nPrior Years Current Year Total \r\n \r\n$ 4,069,945.00 963,500.00 \r\n$ 5,033,445.00 \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 63 - \r\n \r\n Section II Compliance and Internal Control Reports \r\n \r\n Greg S. Griffin State Auditor \r\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 \r\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 \r\nand Dr. Katherine Thomas, Superintendent and Members of the Polk County School District \r\nWe have audited the financial statements of the governmental activities, each major fund, and fiduciary activities of the Polk County School District (School District), as of and for the year ended June 30, 2021, 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 23, 2022. We conducted our audit 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. \r\nInternal Control Over Financial Reporting \r\nIn planning and performing our audit of the financial statements, we considered the School District's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the basic 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. \r\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 a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the School District'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. \r\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. \r\n270 Washington Street, SW, Suite 4-101 Atlanta, Georgia 30334 | Phone (404) 656-2180 \r\n \r\n Compliance and Other Matters \r\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 financial statements. 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. \r\nPurpose of this Report \r\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. \r\nRespectfully submitted, \r\nGreg S. Griffin State Auditor \r\nAugust 23, 2022 \r\n \r\n Greg S. Griffin State Auditor \r\nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE \r\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 \r\nand Dr. Katherine Thomas, Superintendent and Members of the Polk County School District \r\nReport on Compliance for Each Major Federal Program \r\nWe have audited the Polk County School District'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, 2021. 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. \r\nManagement's Responsibility \r\nManagement is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. \r\nAuditor's Responsibility \r\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. \r\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. \r\n270 Washington Street, SW, Suite 4-101 Atlanta, Georgia 30334 | Phone (404) 656-2180 \r\n \r\n Opinion on Each Major Federal Program \r\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, 2021. \r\nReport on Internal Control over Compliance \r\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. \r\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 a 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. \r\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. \r\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. \r\nRespectfully submitted, \r\nGreg S. Griffin State Auditor \r\nAugust 23, 2022 \r\n \r\n Section III Auditee's Response to Prior Year Findings and Questioned Costs \r\n \r\n POLK COUNTY SCHOOL DISTRICT AUDITEE'S RESPONSE \r\nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2021 \r\nPRIOR YEAR FINANCIAL STATEMENT FINDINGS No matters were reported. \r\nPRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. \r\n \r\n Section IV Findings and Questioned Costs \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2021 \r\n \r\nI SUMMARY OF AUDITOR'S RESULTS \r\nFinancial Statements \r\nType of auditor's report issued: Governmental Activities, Each Major Fund, and Fiduciary Activities \r\nInternal control over financial reporting:  Material weakness(es) identified?  Significant deficiency(ies) identified? \r\nNoncompliance material to financial statements noted: \r\nFederal Awards \r\nInternal Control over major programs:  Material weakness(es) identified?  Significant deficiency(ies) identified? \r\nType of auditor's report issued on compliance for major programs: \r\nAll major programs \r\n \r\nUnmodified No \r\nNone Reported No \r\nNo None Reported \r\nUnmodified \r\n \r\nAny audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? \r\n \r\nIdentification of major programs: \r\n \r\nAssistance Listing Numbers Assistance Listing Program or Cluster Title \r\n \r\n10.553, 10.555 84.425 \r\n \r\nChild Nutrition Cluster Education Stabilization Fund \r\n \r\nDollar threshold used to distinguish between Type A and Type B programs: \r\n \r\nAuditee qualified as low-risk auditee? \r\n \r\nNo \r\n$750,000.00 No \r\n \r\nII FINANCIAL STATEMENT FINDINGS No matters were reported. Ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. \r\n \r\n "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-be26-bp7-b2020-belec-p-btext","title":"Polk School District, Cedartown, Georgia, annual financial report for the fiscal year ended 2020 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":["2021-07-13"],"dcterms_description":["Annual financial report for the Polk 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":["Polk School District (Ga.)--Appropriations and expenditures--Periodicals.","Education--Georgia--Polk County--Auditing--Periodicals.","Education--Georgia--Polk County--Finance--Statistics--Periodicals.","Georgia Government Documents--Serial"],"dcterms_title":["Polk School District, Cedartown, Georgia, annual financial report for the fiscal year ended 2020 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-bp7-b2020-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-be26-bp7-b2020-belec-p-btext"],"dcterms_temporal":null,"dcterms_rights_holder":null,"dcterms_bibliographic_citation":null,"dlg_local_right":null,"dcterms_medium":["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":"POLK SCHOOL DISTRICT CEDARTOWN, GEORGIA \r\nANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED \r\nJUNE 30, 2020 (Including Independent Auditor's Reports) \r\n \r\n POLK COUNTY SCHOOL DISTRICT \r\n \r\n- TABLE OF CONTENTS - \r\n \r\nSECTION I \r\n \r\nPage \r\n \r\nFINANCIAL \r\n \r\nINDEPENDENT AUDITOR'S REPORT \r\n \r\nREQUIRED SUPPLEMENTARY INFORMATION \r\n \r\nMANAGEMENT'S DISCUSSION AND ANALYSIS \r\n \r\ni \r\n \r\nEXHIBITS \r\n \r\nBASIC FINANCIAL STATEMENTS \r\n \r\nGOVERNMENT-WIDE FINANCIAL STATEMENTS \r\n \r\nA \r\n \r\nSTATEMENT OF NET POSITION \r\n \r\n1 \r\n \r\nB \r\n \r\nSTATEMENT OF ACTIVITIES \r\n \r\n2 \r\n \r\nFUND FINANCIAL STATEMENTS \r\n \r\nC \r\n \r\nBALANCE SHEET \r\n \r\nGOVERNMENTAL FUNDS \r\n \r\n3 \r\n \r\nD \r\n \r\nRECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \r\n \r\nTO THE STATEMENT OF NET POSITION \r\n \r\n4 \r\n \r\nE \r\n \r\nSTATEMENT OF REVENUES, EXPENDITURES AND CHANGES \r\n \r\nIN FUND BALANCES \r\n \r\nGOVERNMENTAL FUNDS \r\n \r\n5 \r\n \r\nF \r\n \r\nRECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT \r\n \r\nOF REVENUES, EXPENDITURES AND CHANGES IN FUND \r\n \r\nBALANCES TO THE STATEMENT OF ACTIVITIES \r\n \r\n6 \r\n \r\nG \r\n \r\nSTATEMENT OF FIDUCIARY NET POSITION \r\n \r\nFIDUCIARY FUNDS \r\n \r\n7 \r\n \r\nH \r\n \r\nSTATEMENT OF CHANGES IN FIDUCIARY NET POSITION \r\n \r\nFIDUCIARY FUNDS \r\n \r\n8 \r\n \r\nI NOTES TO THE BASIC FINANCIAL STATEMENTS \r\n \r\n10 \r\n \r\nSCHEDULES \r\n \r\nREQUIRED SUPPLEMENTARY INFORMATION \r\n \r\n1 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY \r\n \r\nTEACHERS RETIREMENT SYSTEM OF GEORGIA \r\n \r\n41 \r\n \r\n2 SCHEDULE OF CONTRIBUTIONS  TEACHERS RETIREMENT SYSTEM OF GEORGIA \r\n \r\n42 \r\n \r\n3 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY \r\n \r\nEMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \r\n \r\n43 \r\n \r\n4 SCHEDULE OF CONTRIBUTIONS  EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA 44 \r\n \r\n5 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY \r\n \r\nPUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA \r\n \r\n45 \r\n \r\n6 SCHEDULE OF PROPORTIONATE SHARE OF THE NET OPEB LIABILITY \r\n \r\nSCHOOL OPEB FUND \r\n \r\n46 \r\n \r\n7 SCHEDULE OF CONTRIBUTIONS  SCHOOL OPEB FUND \r\n \r\n47 \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT \r\n- TABLE OF CONTENTS - \r\nSECTION I \r\nFINANCIAL \r\nSCHEDULES \r\nREQUIRED SUPPLEMENTARY INFORMATION \r\n8 SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS  SOCIAL SECURITY REPLACEMENT PLAN \r\n9 SCHEDULE OF CONTRIBUTIONS  SOCIAL SECURITY REPLACEMENT PLAN 10 SCHEDULE OF INVESTMENT RETURNS  SOCIAL SECURITY REPLACEMENT PLAN 11 NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION 12 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES \r\nIN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND \r\nSUPPLEMENTARY INFORMATION \r\n13 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 14 SCHEDULE OF STATE REVENUE 15 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \r\n \r\nPage \r\n48 49 50 51 52 \r\n53 54 55 \r\n \r\nSECTION II \r\nCOMPLIANCE AND INTERNAL CONTROL REPORTS \r\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 \r\nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE \r\n \r\nSECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS \r\n \r\nSECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\n \r\n (This page left intentionally blank) \r\n \r\n SECTION I FINANCIAL \r\n \r\n (This page left intentionally blank) \r\n \r\n Greg S. Griffin \r\nSTATE AUDITOR \r\n(404) 656-2174 \r\n \r\nDEPARTMENT OF AUDITS AND ACCOUNTS \r\n270 Washington Street, S.W., Suite 4-101 Atlanta, Georgia 30334-8400 \r\n \r\nINDEPENDENT AUDITOR'S REPORT \r\n \r\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 \r\nand Superintendent and Members of the Polk County School District \r\nReport on the Financial Statements \r\nWe have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Polk County School District (School District), as of and for the year ended June 30, 2020, 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. \r\nManagement's Responsibility for the Financial Statements \r\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. \r\nAuditor's Responsibility \r\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. \r\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. \r\n \r\n (This page left intentionally blank) \r\n \r\n We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. \r\nOpinions \r\nIn our opinion, the 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, 2020, 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. \r\nEmphasis of Matter \r\nAs described in Note 2 to the financial statements, in 2020, the Polk County School District early adopted new accounting guidance, Governmental Accounting Standards Board (GASB) Statement No. 84, Fiduciary Activities. The cumulative effect of GASB Statement No. 84 is described in the restatement note in the Notes to the Basic Financial Statements. Our opinions are not modified with respect to this matter. \r\nOther Matters \r\nRequired Supplementary Information \r\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. \r\nOther Information \r\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. \r\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 \r\n \r\n (This page left intentionally blank) \r\n \r\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 taken as a whole. \r\nOther Reporting Required by Government Auditing Standards \r\nIn accordance with Government Auditing Standards, we have also issued our report dated July 13, 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. \r\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. \r\nRespectfully submitted, \r\n \r\nJuly 13, 2021 \r\n \r\nGreg S. Griffin State Auditor \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 \r\n \r\nINTRODUCTION \r\n \r\nThe intent of this discussion and analysis is to look at the Polk County School District's (School District) financial performance as a whole. The reader should review the notes to the basic financial statements and the financial statements to enhance their understanding of the School District's financial performance. The School District's financial statements for the fiscal year ended June 30, 2020 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 Position 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. The fund financial statements provide information about all of the School District's funds. \r\n \r\nFINANCIAL HIGHLIGHTS \r\n \r\nKey financial highlights for fiscal year 2020 are as follows: \r\n \r\nOn the government-wide financial statements: \r\n Government-wide net position at June 30, 2020 was approximately ($4.5) million. Net position reflects the difference between all assets of the School District including capital assets, net of depreciation, deferred outflows and all liabilities, both short-term and long-term, and deferred inflows. The net position at June 30, 2020 of ($4.5) million represented an increase of approximately $7.6 million when compared to the prior year. This large increase is due to a decrease in long-term liabilities and an increase in construction in progress capitalized as an asset. The School District has completed the fine arts building and is currently constructing renovations and modifications. \r\n \r\n The School District had $87.6 million in expenses relating to governmental activities; only $62.2 million of these expenses were offset by program revenues in charges for services, operating and capital grants and contributions. However, the general revenues (primarily property and sales taxes) of approximately $33.0 million provided additional funding of these expenses. \r\n \r\n As stated above, general revenues accounted for $33.0 million or about 35% of all revenues totaling approximately $95.1 million. Program specific revenues in the form of charges for services, operating and capital grants, and contributions accounted for the balance of these revenues. \r\n \r\nSource of Revenues \r\n \r\nGeneral Revenue - Equalization 8% \r\nGeneral Revenue - Sales Taxes 7% \r\n \r\nGeneral Revenue - All Other 2% \r\n \r\nGeneral Revenue - Property Taxes 18% \r\n \r\nProgram Revenues 65% \r\n \r\ni \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 \r\nOn the fund financial statements: \r\n Among major funds, the general fund had approximately $87.5 million in revenues and $82.7 million in expenditures. The general fund balance of approximately $24.0 million at June 30, 2020 increased by approximately $4.8 million from the prior year. \r\nOVERVIEW OF THE FINANCIAL STATEMENTS \r\nThis annual report consist of three parts; management's discussion and analysis (this section), the basic financial statements, including notes to the 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. \r\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 School District's overall financial status. \r\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 School District, the general fund, capital projects fund, and debt service fund are all considered to be major funds. The School District has no non-major funds as defined by GASB Statement No. 34 for purposes of this report. \r\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. \r\nGovernment-Wide Statements \r\nSince the School District has no operations that have been classified as \"Business Activities\", the government-wide financial statements are basically a consolidation of the entire School District's operating funds into one column called governmental activities. In reviewing the government-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 School District's assets, deferred outflows, liabilities, and deferred inflows which uses the accrual basis of accounting similar to the accounting used by most private-sector companies. This basis of accounting takes into accounts all of the current year's revenues and expenses regardless of when cash is received or paid. \r\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. \r\nii \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 \r\nWhen analyzing government-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: \r\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 \r\naccrual basis of accounting  Allocate net position as follows: \r\no Net Investment in Capital Assets o Restricted net position is that with constraints placed on the use by external sources \r\nsuch as creditors, grantors, contributors or laws and regulations. o Unrestricted net position is net position that does not meet any of the above \r\nrestrictions. \r\nFund Financial Statements \r\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 non-major funds as defined by generally accepted accounting principles. \r\nThe School District has two kinds of funds as discussed below: \r\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 governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds are reconciled in the financial statements. \r\nFiduciary Funds  The School District is the trustee, or fiduciary, for assets that belong to clubs, organizations, and others within the principals' accounts as well as an employer sponsored pension plan. 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 government-wide financial statements because it cannot use these assets to finance its operations. \r\nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT AS A WHOLE \r\nNet position, which is the difference between total assets, deferred outflows of resources, total liabilities and deferred inflows of resources, is one indicator of the financial condition of the School 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 decreases in the School District's net \r\niii \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 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 non-financial factors should be considered in assessing the overall health of the School District. The School District had approximately $84.5 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 position, it must be recognized that this portion of the net position is not available for future spending. The deficit balance of unrestricted net position of approximately $99.0 million reflects the net pension liability adjustments as required by GASB Statement No. 68 and GASB Statement No. 71 and the OPEB liability adjustments as required by GASB Statement No. 75. \r\niv \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 \r\n \r\nTable 1 provides a summary of the School District's net position for this fiscal year as compared to the prior year. \r\n \r\nTable 1 Net Position \r\n \r\nAssets Current and Other Assets Capital Assets, Net \r\n \r\nGovernmental Activities \r\n \r\nFiscal Year \r\n \r\nFiscal Year \r\n \r\n2020 \r\n \r\n2019 (1) \r\n \r\n$ 45,291,514 $ 103,458,205 \r\n \r\n45,770,230 96,023,350 \r\n \r\nTotal Assets \r\n \r\n148,749,719 \r\n \r\n141,793,580 \r\n \r\nDeferred Outflows of Resources Related Defined Benefits Pension Plans Related OPEB Plan \r\n \r\n20,525,982 3,110,566 \r\n \r\n14,203,373 2,178,260 \r\n \r\nTotal Deferred Outflows \r\n \r\n23,636,548 \r\n \r\n16,381,633 \r\n \r\nLiabilities Current and Other Liabilities Long-Term Liabilities Net Pension Liability Net OPEB Liability \r\n \r\n11,158,005 25,385,817 73,471,420 48,079,689 \r\n \r\n10,152,519 28,573,756 64,942,071 50,449,983 \r\n \r\nTotal Liabilities \r\n \r\n158,094,931 \r\n \r\n154,118,329 \r\n \r\nDeferred Inflows of Resources Related Defined Benefits Pension Plans Related OPEB Plan \r\n \r\n4,758,965 14,063,641 \r\n \r\n4,788,444 11,442,776 \r\n \r\nTotal Deferred Inflows \r\n \r\n18,822,606 \r\n \r\n16,231,220 \r\n \r\nNet Position Net Investment in Capital Assets Restricted Unrestricted (Deficit) \r\n \r\n84,470,128 10,045,718 (99,047,116) \r\n \r\n80,981,531 8,596,666 \r\n(101,752,533) \r\n \r\nTotal Net Position \r\n \r\n$ (4,531,270) $ (12,174,336) \r\n \r\n(1) Fiscal year 2019 balances do not reflect the effect of the Restatement of Net Position. See Note 15 in the Notes to the Basic Financial Statements for additional information. \r\n \r\nv \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 \r\n \r\nTotal net position increased by approximately $7.5 million in fiscal year 2020 not including the effect of the restatement of net position. This change in net position is detailed in Table 2 below. Table 2 also shows the change in net position as compared to the prior fiscal year. \r\n \r\nTable 2 Change in Net Position \r\n \r\nRevenues Program Revenues: Charges for Services Operating Grants and Contributions Capital Grants and Contributions \r\n \r\nGovernmental Activities \r\n \r\nFiscal Year \r\n \r\nFiscal Year \r\n \r\n2020 \r\n \r\n2019 (1) \r\n \r\n$ 2,150,761 $ 2,436,513 \r\n \r\n58,772,928 \r\n \r\n55,048,208 \r\n \r\n1,249,268 \r\n \r\n- \r\n \r\nTotal Program Revenues \r\n \r\n62,172,957 \r\n \r\n57,484,721 \r\n \r\nGeneral Revenues: Taxes Property Taxes For Maintenance and Operations Other Taxes Sales Taxes Special Purpose Local Option Sales Tax - Other Taxes For Debt Services Other Sales Tax Grant and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous \r\nSpecial Item Donation - Land \r\n \r\n17,044,897 64,504 \r\n \r\n15,825,873 62,970 \r\n \r\n6,220,591 258,512 \r\n7,954,400 330,691 \r\n1,044,866 \r\n50,000 \r\n \r\n5,383,841 245,694 \r\n6,414,331 508,913 \r\n1,240,633 \r\n- \r\n \r\nTotal General Revenues and Special Item \r\n \r\n32,968,461 \r\n \r\n29,682,255 \r\n \r\nTotal Revenues and Special Item \r\n \r\n95,141,418 \r\n \r\n87,166,976 \r\n \r\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 \r\n \r\n58,544,312 \r\n3,729,124 1,313,844 1,246,683 1,031,230 4,679,716 \r\n902,985 7,312,839 3,337,804 \r\n206,623 65,796 \r\n40,935 4,657,480 \r\n541,976 \r\n \r\n51,132,968 \r\n1,961,747 1,269,422 1,025,710 \r\n835,540 3,966,521 \r\n664,743 6,869,485 2,665,243 \r\n185,746 60,787 \r\n2,276,859 4,599,524 \r\n630,461 \r\n \r\nTotal Expenses \r\n \r\n87,611,347 \r\n \r\n78,144,756 \r\n \r\nIncrease in Net Position \r\n \r\n$ 7,530,071 $ 9,022,220 \r\n \r\n(1) Fiscal year 2019 balances do not reflect the effect of the Restatement of Net Position. See Note 15 in the Notes to the Basic Financial Statements for additional information. \r\nvi \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 \r\n \r\nCost of Providing Services \r\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. \r\n \r\nTable 3 Governmental Activities \r\n \r\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 \r\n \r\nTotal Cost of Services \r\n \r\nFiscal Year \r\n \r\nFiscal Year \r\n \r\n2020 \r\n \r\n2019 (1) \r\n \r\nNet Cost of Services \r\n \r\nFiscal Year \r\n \r\nFiscal Year \r\n \r\n2020 \r\n \r\n2019 (1) \r\n \r\n$ 58,544,312 $ 51,132,968 $ 14,351,323 $ 10,856,208 \r\n \r\n3,729,124 1,313,844 1,246,683 1,031,230 4,679,716 \r\n902,985 7,312,839 3,337,804 \r\n206,623 65,796 \r\n \r\n1,961,747 1,269,422 1,025,710 \r\n835,540 3,966,521 \r\n664,743 6,869,485 2,665,243 \r\n185,746 60,787 \r\n \r\n1,174,923 758,471 79,482 (812,358) \r\n2,251,170 892,711 \r\n4,363,598 2,070,384 \r\n204,447 61,181 \r\n \r\n1,034,953 626,861 (26,442) (524,894) \r\n1,773,452 655,593 \r\n4,424,096 1,681,572 \r\n183,178 60,133 \r\n \r\n40,935 4,657,480 \r\n541,976 \r\n \r\n2,276,859 4,599,524 \r\n630,461 \r\n \r\n40,935 (539,853) 541,976 \r\n \r\n(108,209) (606,927) 630,461 \r\n \r\nTotal Expenses \r\n \r\n$ 87,611,347 $ 78,144,756 $ 25,438,390 $ 20,660,035 \r\n \r\n(1) Fiscal year 2019 balances do not reflect the effect of the Restatement of Net Position. See Note 15 in the Notes to the Basic Financial Statements for additional information. \r\n \r\nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT'S FUNDS \r\n \r\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 and other financing sources of $97.2 million and total expenditures and other financial uses of $99.5 million in fiscal year 2020. Total governmental fund balances of approximately $32.7 million at June 30, 2020, decreased approximately $2.3 million from the prior year. \r\n \r\nGeneral Fund Budget Highlights \r\n \r\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 2020, the School District amended its general fund budget as needed. \r\n \r\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. \r\nvii \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 \r\nFor the general fund, the final actual revenues of $87.5 million were greater than the final budgeted amount of $77.6 million by approximately $9.9 million. This can be primarily attributed to receiving more property taxes, state funds, federal funds, charges for services and miscellaneous income than originally expected. \r\n \r\nThe general fund's final actual expenditures of $82.7 million were more than the final budget amount of $82.1 million by less than $663 thousand. The School District believes it effectively managed its budget during the fiscal year. \r\n \r\nCAPITAL ASSETS AND DEBT ADMINISTRATION \r\n \r\nCapital Assets \r\nAt fiscal year ended June 30, 2020, the School District had $103.5 million invested in capital assets, net of accumulated depreciation, all in governmental activities. These assets are made up of a broad range of items including buildings, land, land improvements, food service, transportation and maintenance equipment. Table 4 reflects a summary of these balances, net of accumulated depreciation, as compared to the prior fiscal year. \r\n \r\nTable 4 Capital Assets (Net of Depreciation) \r\n \r\nGovernmental Activities \r\n \r\nFiscal Year \r\n \r\nFiscal Year \r\n \r\n2020 \r\n \r\n2019 \r\n \r\nLand Construction in Progress Building and Improvements Equipment Land Improvements \r\n \r\n$ \r\n \r\n2,384,621 $ \r\n \r\n2,284,296 \r\n \r\n9,937,408 \r\n \r\n3,462,995 \r\n \r\n88,278,133 \r\n \r\n87,465,326 \r\n \r\n1,496,818 \r\n \r\n1,600,868 \r\n \r\n1,361,225 \r\n \r\n1,209,865 \r\n \r\nTotal \r\n \r\n$ 103,458,205 $ 96,023,350 \r\n \r\nAdditional information about the School District's capital assets can be found in the Notes to the Basic Financial Statements. \r\n \r\nDebt Administration \r\n \r\nAt June 30, 2020, the School District had $22.7 million in bonds outstanding with $2.6 million due within one year and $496 thousand in capital leases with $159 thousand due within one year. \r\n \r\nTable 5 Debt at June 30 \r\n \r\nGovernmental Activities \r\n \r\nFiscal Year \r\n \r\nFiscal Year \r\n \r\n2020 \r\n \r\n2019 \r\n \r\nBond Debt Capital Leases \r\n \r\n$ 22,655,000 $ 25,200,000 \r\n \r\n495,868 \r\n \r\n653,324 \r\n \r\nTotal \r\n \r\n$ 23,150,868 $ 25,853,324 \r\n \r\nviii \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 \r\nNet Pension and OPEB Liabilities \r\nAt June 30, 2020 the School District reported liabilities for its proportionate share of the net pension and OPEB liabilities. Reporting this liabilities were required by GASB Statement No. 68, GASB Statement No. 71 and GASB Statement No. 75. \r\nFACTORS BEARING ON THE SCHOOL DISTRICT'S FUTURE \r\nCurrently known circumstances that are expected to have a significant effect on financial position or results of operations in future years are as follows: \r\n The School District is financially stable. The School District's operating millage for 2019 was 16.080. It was rolled back in 2020 to 15.664. \r\n The general fund had a fund balance as of June 30, 2020 of $23.9 million which is up $4.8 million from the prior year. In fiscal year 2020, the $1.3 million remaining interfund loan, related to the construction of the Polk County College and Career Academy was repaid to the general fund from the capital projects fund. \r\n The School District is financially challenged by the State's continuing reduction of state revenue appropriations to local school districts. The School District is scheduled to receive a $4.9 million decrease of state revenue for fiscal year 2021. The general fund is healthy enough to offset payroll step increases. In addition, bonds were sold at a premium of $20.5 million in fiscal year 2018. \r\n The School District student population increased from 7,728 in fiscal year 2019 to 7,859 in fiscal year 2020. The School District will continue to renovate the existing facilities to accommodate any growth as needed. The School District plans to fund additional capital outlays with the one percent local sales tax revenue, general obligation bonds and state capital outlay grants. A fine arts building has been constructed at Cedartown High School. Technology upgrades will be made. Also, additions and modifications will be done as needed. \r\nCONTACTING THE SCHOOL DISTRICT'S FINANCIAL MANAGEMENT \r\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 Mrs. Tammy McDonald, Director of Finance, Polk County School District, 612 South College Street, Cedartown, Georgia 30125. You may also email your questions to Mrs. McDonald at tammy@polk.k12.ga.us. \r\nix \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT STATEMENT OF NET POSITION JUNE 30, 2020 \r\nASSETS \r\nCash and Cash Equivalents Investments Receivables, Net \r\nTaxes State Government Federal Government Other Inventories Restricted Assets Investments with Fiscal Agent or Trustee Capital Assets, Non-Depreciable Capital Assets, Depreciable (Net of Accumulated Depreciation) \r\nTotal Assets \r\nDEFERRED OUTFLOWS OF RESOURCES \r\nRelated to Defined Benefits Pension Plans Related to OPEB Plan \r\nTotal Deferred Outflows of Resources \r\nLIABILITIES \r\nAccounts Payable Salaries and Benefits Payable Interest Payable Contracts Payable Retainages Payable Net Pension Liability Net OPEB Liability Long-Term Liabilities \r\nDue Within One Year Due in More Than One Year \r\nTotal Liabilities \r\nDEFERRED INFLOWS OF RESOURCES \r\nRelated to Defined Benefits Pension Plans Related to OPEB Plan \r\nTotal Deferred Inflows of Resources \r\nNET POSITION \r\nNet Investment in Capital Assets Restricted for \r\nContinuation of Federal Programs Debt Service Capital Projects Unrestricted (Deficit) \r\nTotal Net Position \r\n \r\nEXHIBIT \"A\" \r\n \r\nGOVERNMENTAL ACTIVITIES \r\n \r\n$ \r\n \r\n31,953,571.47 \r\n \r\n10,781.70 \r\n \r\n3,106,612.45 6,370,526.73 1,634,782.93 \r\n267,407.87 103,120.37 \r\n \r\n1,844,710.28 12,322,029.04 91,136,176.06 \r\n \r\n148,749,718.90 \r\n \r\n20,525,982.09 3,110,566.00 \r\n23,636,548.09 \r\n \r\n40,108.38 9,315,439.32 \r\n310,312.50 1,421,192.00 \r\n70,952.75 73,471,420.00 48,079,689.00 \r\n3,302,641.30 22,083,175.85 \r\n158,094,931.10 \r\n \r\n4,758,965.00 14,063,641.00 \r\n18,822,606.00 \r\n \r\n84,470,127.56 \r\n2,741,300.30 5,822,984.27 1,481,433.59 (99,047,115.83) \r\n \r\n$ \r\n \r\n(4,531,270.11) \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 1 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT STATEMENT OF ACTIVITIES \r\nFOR THE YEAR ENDED JUNE 30, 2020 \r\n \r\nEXHIBIT \"B\" \r\n \r\nGOVERNMENTAL ACTIVITIES \r\nInstruction Support Services \r\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 \r\nTotal Governmental Activities \r\n \r\nEXPENSES \r\n \r\nCHARGES FOR SERVICES \r\n \r\nPROGRAM REVENUES OPERATING GRANTS AND \r\nCONTRIBUTIONS \r\n \r\nCAPITAL GRANTS AND CONTRIBUTIONS \r\n \r\nNET (EXPENSES) REVENUES \r\nAND CHANGES IN NET POSITION \r\n \r\n$ 58,544,312.38 $ \r\n \r\n245,957.24 $ 43,019,013.57 $ \r\n \r\n3,729,124.33 1,313,844.28 1,246,682.51 1,031,229.95 4,679,716.13 \r\n902,984.91 7,312,838.56 3,337,804.10 \r\n206,623.14 65,795.54 \r\n \r\n1,646,296.65 - \r\n58,213.71 - \r\n125,801.40 - \r\n27,926.58 13,555.83 \r\n924.03 \r\n \r\n907,904.63 555,373.70 1,108,986.28 1,843,587.54 2,302,744.91 \r\n10,274.03 2,921,313.92 \r\n944,984.07 2,176.12 671.47 \r\n \r\n40,934.81 4,657,480.35 \r\n541,975.90 \r\n \r\n32,085.15 \r\n- \r\n \r\n5,155,898.03 \r\n- \r\n \r\n$ 87,611,346.89 $ 2,150,760.59 $ 58,772,928.27 $ \r\n \r\n928,018.55 $ \r\n308,880.00 3,019.30 \r\n9,349.81 \r\n- \r\n1,249,267.66 \r\n \r\n(14,351,323.02) \r\n(1,174,923.05) (758,470.58) (79,482.52) 812,357.59 \r\n(2,251,169.82) (892,710.88) \r\n(4,363,598.06) (2,070,384.20) \r\n(204,447.02) (61,180.74) \r\n(40,934.81) 539,852.64 (541,975.90) \r\n(25,438,390.37) \r\n \r\nGeneral Revenues Taxes Property Taxes For Maintenance and Operations Other Taxes 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 \r\nSpecial Item Donation - Land \r\nTotal General Revenues and Special Item \r\nChange in Net Position \r\nNet Position - Beginning of Year - Restated \r\n \r\n17,044,897.61 64,504.08 \r\n6,220,591.20 258,511.95 \r\n7,954,400.00 330,690.66 \r\n1,044,865.95 \r\n50,000.00 \r\n32,968,461.45 \r\n7,530,071.08 \r\n(12,061,341.19) \r\n \r\nNet Position - End of Year \r\n \r\n$ \r\n \r\n(4,531,270.11) \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 2 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT BALANCE SHEET \r\nGOVERNMENTAL FUNDS JUNE 30, 2020 \r\n \r\nEXHIBIT \"C\" \r\n \r\nASSETS \r\nCash and Cash Equivalents Investments Receivables, Net \r\nTaxes State Government Federal Government Other Inventories Restricted Investments with a Fiscal Agent or Trustee \r\n \r\nGENERAL FUND \r\n \r\nCAPITAL PROJECTS \r\nFUND \r\n \r\nDEBT SERVICE \r\nFUND \r\n \r\nTOTAL \r\n \r\n$ 24,081,035.70 $ 10,781.70 \r\n2,053,284.80 6,370,526.73 1,634,782.93 \r\n167,407.87 103,120.37 \r\n- \r\n \r\n4,637,276.93 $ - \r\n \r\n3,235,258.84 $ - \r\n \r\n31,953,571.47 10,781.70 \r\n \r\n100,000.00 - \r\n \r\n1,053,327.65 - \r\n \r\n3,106,612.45 6,370,526.73 1,634,782.93 \r\n267,407.87 103,120.37 \r\n \r\n- \r\n \r\n1,844,710.28 \r\n \r\n1,844,710.28 \r\n \r\nTotal Assets \r\nLIABILITIES \r\nAccounts Payable Salaries and Benefits Payable Contracts Payable Retainages Payable \r\nTotal Liabilities \r\nDEFERRED INFLOWS OF RESOURCES \r\nUnavailable Revenue - Property Taxes Unavailable Revenue - Special Purpose Local Option Sales Tax \r\nTotal Deferred Inflows of Resources \r\nFUND BALANCES \r\nNonspendable Restricted Assigned Unassigned \r\nTotal Fund Balances \r\nTotal Liabilities, Deferred Inflows of Resources, and Fund Balances \r\n \r\n$ 34,420,940.10 $ \r\n \r\n4,737,276.93 $ 6,133,296.77 $ 45,291,513.80 \r\n \r\n$ \r\n \r\n40,108.38 $ \r\n \r\n- $ \r\n \r\n9,315,439.32 \r\n \r\n- \r\n \r\n- \r\n \r\n1,421,192.00 \r\n \r\n- \r\n \r\n70,952.75 \r\n \r\n9,355,547.70 \r\n \r\n1,492,144.75 \r\n \r\n- $ - \r\n \r\n40,108.38 9,315,439.32 1,421,192.00 \r\n70,952.75 \r\n \r\n- \r\n \r\n10,847,692.45 \r\n \r\n1,139,814.49 - \r\n1,139,814.49 \r\n \r\n- \r\n \r\n- \r\n \r\n1,139,814.49 \r\n \r\n- \r\n \r\n563,499.74 \r\n \r\n563,499.74 \r\n \r\n- \r\n \r\n563,499.74 \r\n \r\n1,703,314.23 \r\n \r\n103,120.37 2,638,179.93 \r\n857,927.42 20,326,350.19 \r\n23,925,577.91 \r\n \r\n3,245,132.18 \r\n- \r\n3,245,132.18 \r\n \r\n5,569,797.03 \r\n- \r\n5,569,797.03 \r\n \r\n103,120.37 11,453,109.14 \r\n857,927.42 20,326,350.19 \r\n32,740,507.12 \r\n \r\n$ 34,420,940.10 $ \r\n \r\n4,737,276.93 $ 6,133,296.77 $ 45,291,513.80 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 3 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \r\nTO THE STATEMENT OF NET POSITION JUNE 30, 2020 \r\n \r\nEXHIBIT \"D\" \r\n \r\nTotal fund balances - governmental funds (Exhibit \"C\") \r\nAmounts reported for governmental activities in the Statement of Net Position are different because: \r\nCapital assets used in governmental activities are not financial resources and therefore are not reported in the funds. \r\nLand Construction in progress Buildings and improvements Equipment Land improvements Accumulated depreciation \r\nSome liabilities are not due and payable in the current period and, therefore, are not reported in the funds. \r\nNet pension liability Net OPEB liability \r\nDeferred outflows and inflows of resources related to pensions/OPEB are applicable to future periods and, therefore, are not reported in the funds. \r\nRelated to pensions Related to OPEB \r\nTaxes that are not available to pay for current period expenditures are deferred in the funds. \r\nLong-term liabilities, and related accrued interest, are not due and payable in the current period and therefore are not reported in the funds. \r\nBonds payable Accrued interest payable Capital leases payable Compensated absences payable Unamortized bond premiums \r\n \r\n$ \r\n \r\n32,740,507.12 \r\n \r\n$ \r\n \r\n2,384,621.10 \r\n \r\n9,937,407.94 \r\n \r\n119,499,397.72 \r\n \r\n5,991,468.42 \r\n \r\n2,804,883.05 \r\n \r\n(37,159,573.13) \r\n \r\n103,458,205.10 \r\n \r\n$ \r\n \r\n(73,471,420.00) \r\n \r\n(48,079,689.00) \r\n \r\n(121,551,109.00) \r\n \r\n$ \r\n \r\n15,767,017.09 \r\n \r\n(10,953,075.00) \r\n \r\n4,813,942.09 1,703,314.23 \r\n \r\n$ \r\n \r\n(22,655,000.00) \r\n \r\n(310,312.50) \r\n \r\n(495,868.22) \r\n \r\n(257,855.17) \r\n \r\n(1,977,093.76) \r\n \r\n(25,696,129.65) \r\n \r\nNet position of governmental activities (Exhibit \"A\") \r\n \r\n$ \r\n \r\n(4,531,270.11) \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 4 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES \r\nGOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2020 \r\n \r\nEXHIBIT \"E\" \r\n \r\nREVENUES \r\nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous \r\nTotal Revenues \r\nEXPENDITURES \r\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 \r\nCapital Outlay Debt Service \r\nPrincipal Dues and Fees Interest \r\nTotal Expenditures \r\nRevenues over (under) Expenditures \r\nOTHER FINANCING SOURCES (USES) \r\nTransfers In Transfers Out \r\nTotal Other Financing Sources (Uses) \r\nNet Change in Fund Balances \r\nFund Balances - Beginning - Restated \r\n \r\nGENERAL FUND \r\n \r\nCAPITAL PROJECTS \r\nFUND \r\n \r\nDEBT SERVICE \r\nFUND \r\n \r\nTOTAL \r\n \r\n$ 17,007,026.01 $ 258,511.95 \r\n56,745,360.37 10,304,367.03 \r\n2,150,760.59 71,204.76 \r\n944,865.95 \r\n87,482,096.66 \r\n \r\n- $ 940,387.66 120,234.56 100,000.00 \r\n1,160,622.22 \r\n \r\n- $ 5,657,091.46 \r\n139,251.34 - \r\n \r\n17,007,026.01 5,915,603.41 \r\n57,685,748.03 10,304,367.03 \r\n2,150,760.59 330,690.66 \r\n1,044,865.95 \r\n \r\n5,796,342.80 \r\n \r\n94,439,061.68 \r\n \r\n54,816,126.68 \r\n3,701,353.30 1,276,515.63 1,216,207.96 \r\n905,887.38 4,568,914.03 \r\n890,692.72 7,341,791.41 2,773,948.88 \r\n188,655.33 52,069.31 40,934.81 \r\n4,940,233.05 - \r\n- \r\n82,713,330.49 \r\n4,768,766.17 \r\n \r\n15,515.23 \r\n2,800.00 390,590.49 9,793,410.68 \r\n157,456.19 1,075.00 \r\n20,343.81 \r\n10,381,191.40 \r\n(9,220,569.18) \r\n \r\n- \r\n3,675.00 - \r\n2,545,000.00 - \r\n1,090,750.00 \r\n3,639,425.00 \r\n2,156,917.80 \r\n \r\n54,831,641.91 \r\n3,701,353.30 1,276,515.63 1,216,207.96 \r\n909,562.38 4,568,914.03 \r\n893,492.72 7,732,381.90 2,773,948.88 \r\n188,655.33 52,069.31 40,934.81 \r\n4,940,233.05 9,793,410.68 \r\n2,702,456.19 1,075.00 \r\n1,111,093.81 \r\n96,733,946.89 \r\n(2,294,885.21) \r\n \r\n4,768,766.17 19,156,811.74 \r\n \r\n2,806,972.00 - \r\n2,806,972.00 (6,413,597.18) 9,658,729.36 \r\n \r\n(2,806,972.00) (2,806,972.00) \r\n(650,054.20) 6,219,851.23 \r\n \r\n2,806,972.00 (2,806,972.00) \r\n(2,294,885.21) 35,035,392.33 \r\n \r\nFund Balances - Ending \r\n \r\n$ 23,925,577.91 $ 3,245,132.18 $ 5,569,797.03 $ 32,740,507.12 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 5 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF \r\nREVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2020 \r\n \r\nEXHIBIT \"F\" \r\n \r\nNet change in fund balances total governmental funds (Exhibit \"E\") \r\nAmounts reported for governmental activities in the Statement of Activities are different because: \r\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. \r\nCapital outlay Depreciation expense \r\nTaxes reported in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. \r\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. \r\nAmortization of bonds premium Bond principal retirements Capital lease payments \r\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. \r\nPension expense OPEB expense \r\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. \r\nAccrued interest on issuance of bonds Compensated absences \r\n \r\n$ \r\n \r\n(2,294,885.21) \r\n \r\n$ 10,186,489.04 (2,751,633.63) \r\n \r\n7,434,855.41 665,875.42 \r\n \r\n$ \r\n \r\n538,380.41 \r\n \r\n2,545,000.00 \r\n \r\n157,456.19 \r\n \r\n3,240,836.60 \r\n \r\n$ \r\n \r\n(2,177,261.15) \r\n \r\n681,735.00 \r\n \r\n(1,495,526.15) \r\n \r\n$ \r\n \r\n31,812.50 \r\n \r\n(52,897.49) \r\n \r\n(21,084.99) \r\n \r\nChange in net position of governmental activities (Exhibit \"B\") \r\n \r\n$ \r\n \r\n7,530,071.08 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 6 - \r\n \r\n ASSETS Cash and Cash Equivalents Investments \r\nTotal Assets LIABILITIES Due to Broker NET POSITION Employee's Pension Benefits Held in Trust for Private Purposes \r\n \r\nPOLK COUNTY SCHOOL DISTRICT STATEMENT OF FIDUCIARY NET POSITION \r\nFIDUCIARY FUNDS JUNE 30, 2020 \r\n \r\nEXHIBIT \"G\" \r\n \r\nPRIVATE PURPOSE TRUSTS \r\n \r\nPENSION TRUST FUND \r\nDecember 31, 2019 \r\n \r\n$ \r\n \r\n9,796.72 $ \r\n \r\n8,691.12 \r\n \r\n- \r\n \r\n4,483,151.51 \r\n \r\n$ \r\n \r\n9,796.72 $ \r\n \r\n4,491,842.63 \r\n \r\n$ \r\n \r\n391.63 \r\n \r\n$ \r\n \r\n4,491,451.00 \r\n \r\n$ \r\n \r\n9,796.72 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 7 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT STATEMENT OF CHANGES IN FIDUCIARY NET POSITION \r\nFIDUCIARY FUNDS YEAR ENDED JUNE 30, 2020 \r\n \r\nEXHIBIT \"H\" \r\n \r\nADDITIONS \r\nContributions Donors Employer Contributions \r\nInvestment Earnings Net Increase in Fair Value of Investments \r\nTotal Additions \r\nDEDUCTIONS \r\nAdministrative Expenses Benefits Paid to Participants Other Deductions \r\nTotal Deductions \r\nChange in Net Position \r\nNet Position - Beginning \r\n \r\nPRIVATE PURPOSE TRUSTS \r\n \r\nPENSION TRUST FUND \r\nDecember 31,2019 \r\n \r\n$ \r\n \r\n200.00 $ \r\n \r\n- \r\n \r\n335,053.00 \r\n \r\n- \r\n \r\n684,749.00 \r\n \r\n200.00 \r\n \r\n1,019,802.00 \r\n \r\n130.00 \r\n130.00 \r\n70.00 \r\n9,726.72 \r\n \r\n22,682.00 358,105.00 \r\n- \r\n380,787.00 \r\n639,015.00 \r\n3,852,436.00 \r\n \r\nNet Position - Ending \r\n \r\n$ \r\n \r\n9,796.72 $ \r\n \r\n4,491,451.00 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 8 - \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY \r\nREPORTING ENTITY \r\nThe Polk County School District (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. \r\nNOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES \r\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. \r\nBASIS OF PRESENTATION \r\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. \r\nGOVERNMENT-WIDE STATEMENTS: \r\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. \r\nThe Statement of Net Position presents the School District's non-fiduciary assets, deferred outflows of resources, deferred inflows of resources and liabilities, with the difference reported as net position. Net position is reported in three categories as follows: \r\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. \r\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. \r\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. \r\nThe Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities. \r\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. \r\n \r\n- 10 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\nFUND FINANCIAL STATEMENTS \r\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. \r\nThe School District reports the following major governmental funds: \r\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. \r\n The 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 for capital outlay expenditures, including the acquisition or construction of capital facilities and other capital assets. \r\n The debt service fund accounts for and reports financial resources that are restricted, committed, or assigned including taxes (property and sales) legally restricted for the payment of general long-term principal and interest. \r\nThe School District reports the following fiduciary fund types: \r\n Private purpose trust funds are used to report all trust arrangements, other than those properly reported elsewhere, in which principal and income benefit individuals, private organizations or other governments. \r\n Pension trust fund accounts for the activities of Polk County School District Social Security Replacement Plan, a single employer defined benefit pension plan for the group of employees covered by the Public School Employees Retirement Systems (PSERS). \r\nBASIS OF ACCOUNTING \r\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. \r\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. \r\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 \r\n- 11 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"I\" \r\n \r\nintergovernmental 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 and compensated absences, 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. \r\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 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. \r\nNEW ACCOUNTING PRONOUNCEMENTS \r\nIn fiscal year 2020, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 95, Postponement of the Effective Dates of Certain Authoritative Guidance. The primary objective of this statement is to provide temporary relief to governments and other stakeholders in light of the COVID-19 pandemic. That objective is accomplished by postponing the effective dates of certain provisions in statements and Implementation Guides that first became effective or are scheduled to become effective for period beginning after June 15, 2018, and later. \r\nIn fiscal year 2020, the School District early adopted Governmental Accounting Standards Board (GASB) Statement No. 84, Fiduciary Activities. This statement establishes criteria for identifying fiduciary activities of all state and local governments. The focus of the criteria generally is on (1) whether a government is controlling the assets of the fiduciary activity and (2) the beneficiaries with whom a fiduciary relationship exists. Separate criteria are included to identify fiduciary component units and postemployment benefit arrangements that are fiduciary activities. An activity meeting the criteria should be reported in a fiduciary fund in the basic financial statements. Governments with activities meeting the criteria should present a statement of fiduciary net position and a statement of changes in fiduciary net position. The cumulative effect of GASB Statement No. 84 is described in the restatement note. \r\nFISCAL YEAR END \r\nAll funds are reported using fiscal years which end on June 30, except defined benefit pension plan (fiduciary fund), which has a fiscal year ending December 31. \r\nCASH AND CASH EQUIVALENTS \r\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. \r\nINVESTMENTS \r\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. \r\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. \r\n \r\n- 12 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"I\" \r\n \r\nFor accounting purposes, certificates of deposit are classified as investments if they have an original maturity greater than three months when acquired. \r\nRECEIVABLES \r\n \r\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. \r\nINVENTORIES \r\nFood Inventories \r\n \r\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. \r\nRESTRICTED ASSETS \r\n \r\nCertain resources set aside for repayment of debt are classified as restricted assets on the Statement of Net Position because their use is limited by applicable debt statutes, e.g. Qualified Zone Academy Bond sinking funds. \r\nCAPITAL ASSETS \r\n \r\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. \r\n \r\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. \r\n \r\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. \r\n \r\nCapitalization thresholds and estimated useful lives of capital assets reported in the government-wide statements are as follows: \r\n \r\nCapitalization Policy \r\n \r\nEstimated Useful Life \r\n \r\nLand \r\n \r\nLand Improvements \r\n \r\n$ \r\n \r\nBuildings and Improvements $ \r\n \r\nEquipment \r\n \r\n$ \r\n \r\nIntangible Assets \r\n \r\n$ \r\n \r\nAll 50,000.00 50,000.00 50,000.00 50,000.00 \r\n \r\nN/A 20 to 60 years 25 to 60 years \r\n5 to 50 years 10 to 20 years \r\n \r\n- 13 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"I\" \r\n \r\nDEFERRED OUTFLOWS/INFLOWS OF RESOURCES \r\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. \r\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. \r\nCOMPENSATED ABSENCES \r\nCompensated absences payable consists of vacation leave employees earned based on services already rendered. \r\nVacation leave of 10 days is awarded annually to all full-time personnel employed on a twelve-month basis with less than 15 years of experience and 15 days annually to all full-time personnel employed on a twelve-month basis with between 15 and 40 years of experience. Twelve-month employees with 40 or more years of services to the School District are eligible for 5 additional vacation days annually. No other employees are eligible to earn vacation leave. \r\nFor twelve-month employees with 15 or more years of experience, all unused vacation days may be carried forward into the next employment year up to and including June 30. This is a maximum of 15 days earned from previous year. Upon expiration of this limit, a maximum of 5 unused vacation days may be carried forward. Therefore, this employee could have a maximum of 20 days of acquired vacation at the start of a new fiscal year. \r\nFor twelve-month employees with less than 15 years of experience, all unused vacation days may be carried forward into the next employment year up to and including June 30. This is a maximum of 10 days earned from previous year. Upon expiration of this limit, a maximum of 5 unused vacation days may be carried forward. Therefore, this employee could have a maximum of 15 days of acquired vacation at the start of a new fiscal year. \r\nUpon terminating employment, the School District pays all unused and unforfeited vacation benefits to employees. Accordingly, vacation benefits are accrued as a liability in the government-wide financial statements. A liability for these amounts is reported in the governmental fund financial statements only if they have matured, for example, as a result of employee resignations and retirements by fiscalyear end. \r\nMembers of the Teachers Retirement System of Georgia (TRS) may apply unused sick leave toward early retirement. The liability for early retirement will be borne by TRS rather than by the individual School Districts. Otherwise, sick leave does not vest with the employee, and no liability is reported in the School District's financial statements. \r\nLONG-TERM LIABILITIES AND BOND DISCOUNTS/PREMIUMS \r\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. \r\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. \r\n- 14 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"I\" \r\n \r\nPENSIONS \r\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. \r\nPOSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS (OPEB) \r\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. \r\nFUND BALANCES \r\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. \r\nThe School District's fund balances are classified as follows: \r\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. \r\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. \r\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. \r\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. \r\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. \r\nUSE OF ESTIMATES \r\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. \r\n \r\n- 15 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"I\" \r\n \r\nPROPERTY TAXES \r\n \r\nThe Polk County Board of Commissioners adopted the property tax levy for the 2019 tax digest year (calendar year) on September 3, 2019 (levy date) based on property values as of January 1, 2019. Taxes were due on December 1, 2019 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2019 tax digest are reported as revenue in the governmental funds for fiscal year 2020. The Polk 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, 2020, for maintenance and operations amounted to $14,854,950.60. \r\n \r\nThe tax millage rate levied for the 2019 tax year (calendar year) for the School District was as follows (a mill equals $1 per thousand dollars of assessed value): \r\n \r\nSchool Operations \r\n \r\n15.664 mills \r\n \r\nAdditionally, Title Ad Valorem Tax revenues, at the fund reporting level, amounted to $2,087,571.33 during fiscal year ended June 30, 2020. \r\nSALES TAXES \r\nEducation Special Purpose Local Option Sales Tax (ESPLOST), at the fund reporting level, during the year amounted to $5,657,091.46 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. \r\nNOTE 3: BUDGETARY DATA \r\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 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. \r\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. \r\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. \r\nNOTE 4: DEPOSITS, CASH EQUIVALENTS AND INVESTMENTS \r\nCOLLATERALIZATION OF DEPOSITS \r\n \r\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 \r\n \r\n- 16 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"I\" \r\n \r\ndeduction 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. \r\nAcceptable security for deposits consists of any one of or any combination of the following: \r\n(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, \r\n(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, \r\n(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia, \r\n(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, \r\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, \r\n(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and \r\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. \r\nCATEGORIZATION OF DEPOSITS \r\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, 2020, the School District had deposits with a carrying amount of $24,756,178.40, and a bank balance of $29,229,320.79. The bank balances insured by Federal depository insurance were $1,010,940.21. \r\nAt June 30, 2020, $28,218,380.58 of the School District's bank balances were exposed to custodial credit risk. This balance was in the State's Secure Deposit Program (SDP). \r\nThe School District participates in the State's Secure Deposit Program (SDP), a multi-bank pledging pool. The SDP requires participating banks that accept public deposits in Georgia to operate under the policy and procedures of the program. The Georgia Office of State Treasurer (OST) sets the collateral requirements and pledging level for each covered depository. There are four tiers of collateralization levels specifying percentages of eligible securities to secure covered deposits: 25%, 50%, 75%, and 110%. The SDP also provides for collateral levels to be increased in amount of up to 125% if economic or financial conditions warrants. The program lists the types of eligible collateral. The OST approves authorized custodians. \r\nIn accordance with the SDP, if a covered depository defaults, losses to public depositors are first satisfied with any applicable insurance, followed by demands of payment under any letters of credit or sale of the covered depository's collateral. If necessary, any remaining losses are to be satisfied by assessments made against the other participating covered depositories. Therefore, for disclosure purposes, all deposits of the SDP are considered to be fully collateralized. \r\n \r\n- 17 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"I\" \r\n \r\nReconciliation of cash and cash equivalents balances to carrying value of deposits: \r\n \r\nCash and cash equivalents Statement of Net Position Statement of Fiduciary Net Position \r\n \r\n$ 31,953,571.47 18,487.84 \r\n \r\nTotal cash and cash equivalents \r\n \r\n31,972,059.31 \r\n \r\nAdd: Deposits with original maturity of three months or more reported as investments \r\n \r\n10,781.70 \r\n \r\nLess: Investment pools reported as cash and cash equivalents \r\nGeorgia Fund 1 \r\n \r\n7,226,662.61 \r\n \r\nTotal carrying value of deposits - June 30, 2020 \r\n \r\n$ 24,756,178.40 \r\n \r\nCATEGORIZATION OF CASH EQUIVALENTS \r\n \r\nThe School District reported cash equivalents of $7,226,662.61 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, $1.00 per share, which approximates fair value. The pool is an AAAf rated investment pool by Standard and Poor's. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2020 was 38 days. \r\n \r\nGeorgia Fund 1, administered by the State of Georgia, Office of the State Treasurer, is not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office of the State Treasurer for the Georgia Fund 1, does not provide for investment in derivatives or similar investments. Additional information on the Georgia Fund 1 is disclosed in the State of Georgia Comprehensive Annual Financial Report, which is publicly available at https://www.sao.georgia.gov/comprehensive-annual-financial-reports. \r\nCATEGORIZATION OF INVESTMENTS \r\n \r\nAt June 30, 2020, the School District had the following investments: \r\n \r\nInvestment Type \r\n \r\nFair Value \r\n \r\nInvestment Maturity Less Than 1 Year \r\n \r\nDebt Securities U. S. Agencies Implicitly Guaranteed \r\n \r\n$ \r\n \r\n1,844,710.28 $ \r\n \r\n1,844,710.28 \r\n \r\nOther Investments Mutual Bond Funds Mutual Equity Funds Mutual Money Market Funds \r\nTotal Investments \r\n \r\n1,838,616.26 2,464,788.33 \r\n179,746.92 \r\n \r\n$ \r\n \r\n6,327,861.79 \r\n \r\n- 18 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"I\" \r\n \r\nFair Value of Investments \r\nThe School District measures and records its investments using fair value measurement guidelines established by generally accepted accounting principles. These guidelines recognize a three-tiered fair value hierarchy, as follows: \r\nLevel 1: Quoted prices for identical investments in active markets; Level 2: Observable inputs other than quoted market prices; and, Level 3: Unobservable inputs. \r\n \r\nAt June 30, the School District had the following investments by fair value level: \r\n \r\nInvestments by fair value level: \r\n \r\nFair Value \r\n \r\nLevel 1 \r\n \r\nLevel 2 \r\n \r\nU. S. Agencies Implicitly Guaranteed \r\nMutual Bond Funds Equity Mutual Funds - Domestic Equity Mutual Funds - International Mutual Money Market Funds \r\n \r\n$ 1,844,710.28 $ \r\n \r\n- $ 1,844,710.28 \r\n \r\n1,838,616.26 1,838,616.26 \r\n \r\n- \r\n \r\n2,239,837.68 2,239,837.68 \r\n \r\n- \r\n \r\n224,950.65 \r\n \r\n224,950.65 \r\n \r\n- \r\n \r\n179,746.92 \r\n \r\n179,746.92 \r\n \r\n- \r\n \r\nTotal investments by fair value level $ 6,327,861.79 $ 4,483,151.51 $ 1,844,710.28 \r\nInterest Rate Risk \r\nInterest rate risk is the risk that changes in interest rates of debt investment will adversely affect the fair value of an investment. The School District does not have a formal policy for managing interest rate risk. Custodial Credit Risk \r\nCustodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, the School District will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The School District does not have a formal policy for managing custodial credit risk. \r\nAt June 30, 2020, $4,303,404.59 of the School District's applicable investments were held by the investment's counterparty, not in the School District's name. Credit Quality Risk \r\nCredit quality risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. State law limits investments to those prescribed O.C.G.A. 36-83-4. The School District does not have a formal policy that would further limit its investment choices or one that addresses credit risk. \r\n \r\nThe investments subject to credit quality risk are reflected below: \r\n \r\nRated Debt Investments \r\n \r\nFair Value \r\n \r\nQuality Ratings \r\n \r\nAAA \r\n \r\nUnrated \r\n \r\nDebt Securities U. S. Agencies Implicitly Guaranteed Mutual Bond Funds Mutual Money Market Funds \r\n \r\n$ 1,844,710.28 $ 1,838,616.26 179,746.92 \r\n \r\n1,844,710.28 $ - \r\n \r\n1,838,616.26 \r\n179,746.92 \r\n \r\nTotals by Quality Ratings \r\n \r\n$ 3,863,073.46 $ 1,844,710.28 $ 2,018,363.18 \r\n \r\n- 19 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"I\" \r\n \r\nConcentration of Credit Risk \r\nConcentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The School District does not have a formal policy for managing concentration of credit risk. More than 5% of the School District's investments are in Mutual Equity Funds, Mutual Bond Funds U.S. Agencies, Implicitly Guaranteed. These investments are 39%, 29%, and 29% of the School District's total investments respectively. \r\nNOTE 5: RESTRICTED ASSETS \r\nThe restricted assets represent the investment balance of $1,844,710.28, for the QZAB Bond Sinking Fund. \r\nNOTE 6: CAPITAL ASSETS \r\nThe following is a summary of changes in the capital assets for governmental activities during the fiscal year: \r\n \r\nBalances July 1, 2019 \r\n \r\nIncreases \r\n \r\nDecreases \r\n \r\nTransfers \r\n \r\nBalances June 30, 2020 \r\n \r\nGovernmental Activities Capital Assets, Not Being Depreciated: \r\nLand Construction in Progress \r\n \r\n$ 2,284,296.10 $ 100,325.00 $ 3,462,994.87 9,486,504.44 \r\n \r\n- $ \r\n \r\n- $ 2,384,621.10 \r\n \r\n- \r\n \r\n(3,012,091.37) \r\n \r\n9,937,407.94 \r\n \r\nTotal Capital Assets Not Being Depreciated \r\n \r\n5,747,290.97 9,586,829.44 \r\n \r\n- \r\n \r\n(3,012,091.37) 12,322,029.04 \r\n \r\nCapital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements \r\nLess Accumulated Depreciation for: Buildings and Improvements Equipment Land Improvements \r\n \r\n116,337,306.35 5,751,972.82 2,594,719.05 \r\n \r\n150,000.00 239,495.60 210,164.00 \r\n \r\n28,871,980.25 4,151,104.87 1,384,854.38 \r\n \r\n2,349,283.98 343,545.93 58,803.72 \r\n \r\n- \r\n \r\n3,012,091.37 119,499,397.72 \r\n \r\n- \r\n \r\n- \r\n \r\n5,991,468.42 \r\n \r\n- \r\n \r\n- \r\n \r\n2,804,883.05 \r\n \r\n- \r\n \r\n- \r\n \r\n31,221,264.23 \r\n \r\n- \r\n \r\n- \r\n \r\n4,494,650.80 \r\n \r\n- \r\n \r\n- \r\n \r\n1,443,658.10 \r\n \r\nTotal Capital Assets, Being Depreciated, Net \r\n \r\n90,276,058.72 (2,151,974.03) \r\n \r\n- \r\n \r\n3,012,091.37 \r\n \r\n91,136,176.06 \r\n \r\nGovernmental Activities Capital Assets - Net $ 96,023,349.69 $ 7,434,855.41 $ \r\n \r\n- $ \r\n \r\n- $ 103,458,205.10 \r\n \r\nCurrent year depreciation expense by function is as follows: \r\n \r\nInstruction Support Services \r\nStudent Transportation Services Central Support Services Food Services \r\n \r\n$ 265,440.30 8,640.00 \r\n \r\n$ 2,390,167.58 \r\n274,080.30 87,385.75 \r\n$ 2,751,633.63 \r\n \r\n- 20 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 7: INTERFUND TRANSFERS \r\n \r\nInterfund transfers for the year ended June 30, 2020, consisted of the following: \r\n \r\nTransfers to \r\n \r\nTransfers From Debt Service \r\nFund \r\n \r\nCapital Projects Fund $ 2,806,972.00 \r\n \r\nTransfers are used to move Special Purpose Local Option Sales Tax (SPLOST) revenues collected by the debt service fund to the capital projects fund for the payment of cost associated with construction projects approved by the Special Purpose Local Option Sales Tax (SPLOST) referendum. NOTE 8: LONG-TERM LIABILITIES \r\nThe changes in long-term liabilities during the fiscal year for governmental activities were as follows: \r\n \r\nBalance July 1, 2019 \r\n \r\nAdditions \r\n \r\nGovernmental Activities \r\n \r\nBalance \r\n \r\nDeductions \r\n \r\nJune 30, 2020 \r\n \r\nDue Within One Year \r\n \r\nGeneral Obligation (G.O.) Bonds $ 23,200,000.00 $ \r\n \r\nQualified Zone Academy Bonds \r\n \r\n2,000,000.00 \r\n \r\n- $ 2,545,000.00 $ 20,655,000.00 $ 2,605,000.00 \r\n \r\n- \r\n \r\n- \r\n \r\n2,000,000.00 \r\n \r\n- \r\n \r\nTotal Bond Debt \r\n \r\n25,200,000.00 \r\n \r\n- \r\n \r\n2,545,000.00 22,655,000.00 \r\n \r\n2,605,000.00 \r\n \r\nCapital Leases Compensated Absences (1) Unamortized Bond Premiums \r\n \r\n653,324.41 204,957.68 2,515,474.17 \r\n \r\n75,794.61 \r\n- \r\n \r\n157,456.19 22,897.12 \r\n538,380.41 \r\n \r\n495,868.22 257,855.17 1,977,093.76 \r\n \r\n159,260.89 - \r\n538,380.41 \r\n \r\n$ 28,573,756.26 $ \r\n \r\n75,794.61 $ 3,263,733.72 $ 25,385,817.15 $ 3,302,641.30 \r\n \r\n(1) The portion of compensated absences due within one year has been determined to be immaterial to the basic financial statements. \r\nGENERAL OBLIGATION DEBT OUTSTANDING \r\nThe School District's bonded debt consists of various issues 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 property taxes. General obligation bonds are direct obligations and pledge the full faith and credit of the School District. \r\nThe School District's outstanding general obligation bonds related to governmental activities of $20,655,000.00 contain a provision that in the event of a nonpayment, the State Board is authorized to and must withhold from any state appropriations to which the School District may be entitled and apply so much thereof as shall be necessary to the payment of the principal of and interest on such indebtedness then due. \r\nGeneral obligation bonds currently outstanding are as follows: \r\n \r\nDescription \r\n \r\nInterest Rates Issue Date Maturity Date Amount Issued \r\n \r\nAmount Outstanding \r\n \r\nGeneral Government - Series 2014 2.00% - 5.00% 7/22/2014 General Government - Series 2018 4.00% - 5.00% 3/1/2018 \r\n \r\n4/1/2021 $ 12,500,000.00 $ 2,605,000.00 \r\n \r\n3/1/2026 18,050,000.00 \r\n \r\n18,050,000.00 \r\n \r\n$ 30,550,000.00 $ 20,655,000.00 \r\n \r\n- 21 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"I\" \r\n \r\nThe following schedule details debt service requirements to maturity for the School District's total general obligation bonds payable: \r\n \r\nFiscal Year Ended June 30: \r\n \r\nGeneral Obligation Debt \r\n \r\nPrincipal \r\n \r\nInterest \r\n \r\nUnamortized Bond Premium \r\n \r\n2021 2022 2023 2024 2025 2026 \r\n \r\n$ 2,605,000.00 $ 3,425,000.00 3,500,000.00 3,600,000.00 3,700,000.00 3,825,000.00 \r\n \r\n963,500.00 $ 833,250.00 696,250.00 556,250.00 376,250.00 191,250.00 \r\n \r\n538,380.41 308,295.72 308,295.72 308,295.72 308,295.72 205,530.47 \r\n \r\nTotal Principal and Interest $ 20,655,000.00 $ 3,616,750.00 $ 1,977,093.76 \r\n \r\nQUALIFIED ZONE ACADEMY BONDS (QZAB) \r\n \r\nSection 226 of the Taxpayer Relief Act of 1997 (Public Law 105-34) provides for a source of capital at no or at nominal interest rates for costs incurred by School Districts in connection with the establishment of special academic programs, in partnership with the business community. The School District, in agreement with Regions Bank, has entered into such an arrangement. \r\n \r\nThis agreement establishes a method of repayment for the qualified interest-free debt instrument. The agreement requires the School District to deposit funds annually into a sinking fund account on or before June 30, 2020. The amount on deposit at June 30, 2020 was $1,844,710.28. \r\n \r\nIn the event the amount of funds lawfully available is not sufficient to pay the QZAB payments when due in any year, the School District shall levy an ad valorem tax on all taxable property located within the boundaries of the School District subject to taxation for such purposes, at such rate or rates (subject to the 20 Mills Limitation) as may be necessary to produce in each calendar year revenues which shall be sufficient to fulfill the School District's obligations. \r\n \r\nDebt currently outstanding under Qualified Zone Academy Bond is as follows: \r\n \r\nDescription \r\n \r\nInterest Rate \r\n \r\nIssue Date Maturity Date \r\n \r\nAmount Issued \r\n \r\nAmount Outstanding \r\n \r\nGeneral Government - QZAB - Series 2006 \r\n \r\n0.00% 12/5/2006 12/15/2022 $ 2,000,000.00 $ 2,000,000.00 \r\n \r\nThe following schedule reports the annual Qualified Zone Academy Bond payments: \r\n \r\nFiscal Year Ended June 30: \r\n \r\nPrincipal \r\n \r\n2023 \r\n \r\n$ 2,000,000.00 \r\n \r\nCAPITAL LEASES \r\n \r\nThe School District has acquired school buses under the provisions of various long-term lease agreements classified as capital leases for accounting purposes because they provide for a bargain purchase option or a transfer of ownership by the end of the lease term. \r\n \r\nCapital leases currently outstanding are as follows: \r\n \r\nPurpose \r\n \r\nInterest Rate \r\n \r\nIssue Date \r\n \r\nMaturity Date \r\n \r\nAmount Issued \r\n \r\nAmount Outstanding \r\n \r\nSchool buses \r\n \r\n3.74% \r\n \r\n10/26/2018 10/5/2022 $ 827,733.00 $ 495,868.22 \r\n \r\n- 22 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"I\" \r\n \r\nThe following assets were acquired through capital leases and are reflected in the capital asset note at fiscal year-end: \r\n \r\nGovernmental Activities \r\n \r\nEquipment \r\n \r\n$ \r\n \r\n827,733.00 \r\n \r\nLess: Accumulated Depreciation \r\n \r\n124,160.00 \r\n \r\n$ \r\n \r\n703,573.00 \r\n \r\nThe following is a schedule of total capital lease payments: \r\n \r\nFiscal Year Ended June 30: \r\n \r\nPrincipal \r\n \r\nInterest \r\n \r\n2021 2022 2023 \r\n \r\n$ 159,260.89 $ 165,215.20 171,392.13 \r\n \r\n18,539.81 12,584.80 \r\n6,407.87 \r\n \r\nTotal Principal and Interest $ 495,868.22 $ \r\n \r\n37,532.48 \r\n \r\nCOMPENSATED ABSENCES \r\n \r\nCompensated absences represent obligations of the School District relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. Typically, the general fund is the fund used to liquidate this long-term debt. The School District uses the vesting method to compute compensated absences. \r\nNOTE 9: RISK MANAGEMENT \r\nINSURANCE \r\nCommercial Insurance \r\n \r\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. 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. \r\nUNEMPLOYMENT COMPENSATION \r\n \r\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 claims liability during the past two years. \r\nSURETY BOND \r\n \r\nThe School District purchased a surety bond to provide additional insurance coverage as follows: \r\n \r\nPosition Covered \r\n \r\nAmount \r\n \r\nSuperintendent $ 100,000.00 \r\n \r\n- 23 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 10: FUND BALANCE CLASSIFICATION DETAILS \r\n \r\nThe School District's financial statements include the following amounts presented in the aggregate at June 30, 2020: \r\n \r\nNonspendable Inventories \r\nRestricted Continuation of Federal Programs $ Capital Projects Debt Service \r\nAssigned School Activity Accounts \r\nUnassigned \r\n \r\n$ \r\n \r\n103,120.37 \r\n \r\n2,638,179.93 3,245,132.18 5,569,797.03 \r\n \r\n11,453,109.14 \r\n \r\n857,927.42 20,326,350.19 \r\n \r\nFund Balance, June 30, 2020 \r\n \r\n$ 32,740,507.12 \r\n \r\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. \r\nNOTE 11: SIGNIFICANT COMMITMENTS \r\nCOMMITMENTS UNDER CONSTRUCTION CONTRACTS \r\n \r\nThe following is an analysis of significant outstanding construction or renovation contracts executed by the School District as of June 30, 2020. \r\n \r\nProject \r\n \r\nUnearned Executed Contracts (1) \r\n \r\nPayments through June 30, 2020 (2) \r\n \r\nCedartown High School Fine Arts Center \r\n \r\n$ \r\n \r\nCedartown High School Kitchen Renovations \r\n \r\nCedartown High School Modifications \r\n \r\nWestside Elementary School Roof \r\n \r\nCedartown High School Asphalt Paving \r\n \r\n8,902.47 $ 62,106.27 730,494.02 153,984.00 196,197.49 \r\n \r\n8,892,404.52 239,707.84 341,298.07 435,195.00 28,802.51 \r\n \r\n$ 1,151,684.25 $ \r\n \r\n9,937,407.94 \r\n \r\n(1) The amounts described are not reflected in the basic financial statements. (2) Payments include contracts and retainages payable at year end. \r\nNOTE 12: SIGNIFICANT CONTINGENT LIABILITIES \r\nFEDERAL GRANTS \r\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. \r\n \r\n- 24 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"I\" \r\n \r\nLITIGATION \r\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. \r\nNOTE 13: OTHER POST-EMPLOYMENT BENEFITS (OPEB) \r\nGEORGIA SCHOOL PERSONNEL POST-EMPLOYMENT HEALTH BENEFIT FUND \r\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. \r\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. \r\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 $1,336,150.00 for the year ended June 30, 2020. Active employees are not required to contribute to the School OPEB Fund. \r\nOPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB \r\nAt June 30, 2020, the School District reported a liability of $48,079,689.00 for its proportionate share of the net OPEB liability. The net OPEB liability was measured as of June 30, 2019. The total OPEB liability used to calculate the net OPEB liability was based on an actuarial valuation as of June 30, 2018. An expected total OPEB liability as of June 30, 2019 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, 2019. At June 30, 2019, the School District's proportion was 0.391779%, which was a decrease of 0.005162% from its proportion measured as of June 30, 2018. \r\n \r\n- 25 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"I\" \r\n \r\nFor the year ended June 30, 2020, the School District recognized OPEB expense of $654,415.00. At June 30, 2020, the School District reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: \r\n \r\nDeferred Outflows of Resources \r\n \r\nOPEB \r\n \r\nDeferred Inflows of Resources \r\n \r\nDifferences between expected and actual \r\n \r\nexperience \r\n \r\n$ \r\n \r\n- $ 5,230,569.00 \r\n \r\nChanges of assumptions \r\n \r\n1,669,714.00 \r\n \r\n6,777,718.00 \r\n \r\nNet difference between projected and \r\n \r\nactual earnings on OPEB plan investments \r\n \r\n104,702.00 \r\n \r\n- \r\n \r\nChanges in proportion and differences between School District contributions and proportionate share of contributions \r\n \r\n- \r\n \r\n2,055,354.00 \r\n \r\nSchool District contributions subsequent to \r\n \r\nthe measurement date \r\n \r\n1,336,150.00 \r\n \r\n- \r\n \r\nTotal \r\n \r\n$ 3,110,566.00 $ 14,063,641.00 \r\n \r\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, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: \r\n \r\nYear Ended June 30: \r\n \r\nOPEB \r\n \r\n2021 2022 2023 2024 2025 Thereafter \r\n \r\n$ (2,785,927.00) $ (2,785,927.00) $ (2,789,953.00) $ (2,377,073.00) $ (1,261,839.00) $ (288,506.00) \r\n \r\n- 26 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"I\" \r\n \r\nActuarial assumptions: The total OPEB liability as of June 30, 2019 was determined by an actuarial valuation as of June 30, 2018 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, 2019: \r\nOPEB: \r\n \r\nInflation Salary increases Long-term expected rate of return Healthcare cost trend rate \r\nPre-Medicare Eligible Medicare Eligible Ultimate trend rate Pre-Medicare Eligible Medicare Eligible Year of Ultimate trend rate Pre-Medicare Eligible Medicare Eligible \r\n \r\n2.50% 3.00% - 8.75%, including inflation 7.30%, compounded annually, net of investment expense, and including inflation \r\n7.25% 5.375% \r\n4.75% 4.75% \r\n2028 2022 \r\n \r\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: \r\n \r\n For TRS members: The RP-2000 White Collar Mortality Table projected to 2025 with projection \r\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. \r\n For PSERS members: The RP-2000 Blue-Collar Mortality Table projected to 2025 with \r\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. \r\n \r\nThe actuarial assumptions used in the June 30, 2018 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, and adopted by the pension Board on December 17, 2015. The next experience study for TRS will be for the period ending June 30, 2018. \r\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, 2018 valuation were based on a review of recent plan experience done concurrently with the June 30, 2018 valuation. \r\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. \r\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 \r\n \r\n- 27 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"I\" \r\n \r\nweighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. During fiscal year 2018, the School OPEB fund updated their investment strategy to a more long-term approach. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: \r\n \r\nAsset class \r\n \r\nTarget allocation \r\n \r\nLong-Term Expected Real Rate of Return* \r\n \r\nFixed income Domestic Stocks -- Large Cap Domestic Stocks -- Small Cap Int'l Stocks - Developed Mkt Int'l Stocks - Emerging Mkt Alternatives \r\n \r\n30.00% 46.20% \r\n1.30% 12.40% \r\n5.10% 5.00% \r\n \r\n(0.10)% 8.90% \r\n13.20% 8.90% \r\n10.90% 12.00% \r\n \r\nTotal \r\n \r\n100.00% \r\n \r\n*Net of Inflation \r\n \r\nDiscount Rate: The discount rate has changed since the prior measurement date from 3.87% to 3.58%. 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 (3.50% 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 2119. 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 2026. Therefore, the calculated discount rate of 3.58% was applied to all periods of projected benefit payments to determine the total OPEB liability. \r\n \r\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 \r\ncalculated using the discount rate of 3.58%, 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 (2.58%) or 1 percentage-point higher (4.58%) than the current discount rate: \r\n \r\nSchool District's proportionate share of the Net OPEB Liability \r\n \r\n1% Decrease (2.58%) \r\n \r\nCurrent Discount Rate (3.58%) \r\n \r\n1% Increase (4.58%) \r\n \r\n$ 55,884,468.00 $ \r\n \r\n48,079,689.00 $ 41,730,852.00 \r\n \r\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 OPEB liability, as well as what the School District's proportionate share of the net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower or 1percentage-point higher than the current healthcare cost trend rates: \r\n \r\nSchool District's proportionate share of the Net OPEB Liability \r\n \r\n1% Decrease \r\n \r\nCurrent Healthcare Cost Trend Rate \r\n \r\n1% Increase \r\n \r\n$ 40,502,044.00 $ \r\n \r\n48,079,689.00 $ 57,703,873.00 \r\n \r\nOPEB plan fiduciary net position: Detailed information about the OPEB plan's fiduciary net position is available in the Comprehensive Annual Financial Report which is publicly available at https://sao.georgia.gov/comprehensive-annual-financial-reports. \r\n \r\n- 28 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 14: RETIREMENT PLANS \r\nThe School District participates in various retirement plans administered by the State of Georgia, as further explained below. \r\nTEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) \r\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 O.C.G.A. 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. \r\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. \r\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 2020. The School District's contractually required contribution rate for the year ended June 30, 2020 was 21.14% of annual School District payroll, of which 21.06% of payroll was required from the School District and 0.08% of payroll was required from the State. For the current fiscal year, employer contributions to the pension plan were $8,941,170.49 and $32,702.13 from the School District and the State, respectively. \r\nEMPLOYEES' RETIREMENT SYSTEM \r\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/financials. \r\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. \r\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. \r\n- 29 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\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, 2020 was 24.66% of annual covered payroll for old and new plan members and 21.64% for GSEPS members. 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 $51,023.36 for the current fiscal year. \r\nPUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM (PSERS) \r\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/financials. \r\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. \r\nUpon retirement, the member will receive a monthly benefit of $15.25, 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. \r\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. \r\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 $111,379.00. \r\n \r\n- 30 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"I\" \r\n \r\nPension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions \r\nAt June 30, 2020, the School District reported a liability of $69,719,322.00 for its proportionate share of the net pension liability for TRS ($69,424,275.00) and ERS ($295,047.00). \r\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: \r\nSchool District's proportionate share of the net pension liability $ 69,424,275.00 \r\n \r\nState of Georgia's proportionate share of the net pension liability associated with the School District \r\n \r\n327,916.00 \r\n \r\nTotal \r\n \r\n$ 69,752,191.00 \r\n \r\nThe net pension liability for TRS and ERS was measured as of June 30, 2019. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2018. An expected total pension liability as of June 30, 2019 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, 2019. \r\nAt June 30, 2019, the School District's TRS proportion was 0.322863%, which was a decrease of 0.004515% from its proportion measured as of June 30, 2018. At June 30, 2019, the School District's ERS proportion was 0.007150%, which was an increase of 0.002018% from its proportion measured as of June 30, 2018. \r\nAt June 30, 2020, 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 $553,552.00. \r\nThe PSERS net pension liability was measured as of June 30, 2019. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2018. An expected total pension liability as of June 30, 2019 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, 2019. \r\nFor the year ended June 30, 2020, the School District recognized pension expense of $10,938,119.00 for TRS, $88,928.00 for ERS and $170,709.00 for PSERS and revenue of $40,147.00 for TRS and $170,709.00 for PSERS. The revenue is support provided by the State of Georgia. For TRS the State of Georgia support is provided only for certain support personnel. \r\n \r\n- 31 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"I\" \r\n \r\nAt June 30, 2020, the School District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: \r\n \r\nTRS \r\n \r\nDeferred \r\n \r\nDeferred \r\n \r\nOutflows of \r\n \r\nInflows of \r\n \r\nResources \r\n \r\nResources \r\n \r\nERS \r\n \r\nDeferred \r\n \r\nDeferred \r\n \r\nOutflows of \r\n \r\nInflows of \r\n \r\nResources \r\n \r\nResources \r\n \r\nDifferences between expected and actual \r\n \r\nexperience \r\n \r\n$ \r\n \r\n3,913,106.00 $ \r\n \r\n20,583.00 \r\n \r\n$ \r\n \r\n9,826.00 $ \r\n \r\n- \r\n \r\nChanges of assumptions \r\n \r\n6,662,165.00 \r\n \r\n- \r\n \r\n5,193.00 \r\n \r\n- \r\n \r\nNet difference between projected and actual earnings on pension plan investments \r\n \r\n- \r\n \r\n1,653,204.00 \r\n \r\n- \r\n \r\n9,184.00 \r\n \r\nChanges in proportion and differences between School District contributions and proportionate share of contributions \r\n \r\n- \r\n \r\n2,033,950.00 \r\n \r\n48,237.00 \r\n \r\n927.00 \r\n \r\nSchool District contributions subsequent to the \r\n \r\nmeasurement date \r\n \r\n8,941,170.49 \r\n \r\n- \r\n \r\n51,023.36 \r\n \r\n- \r\n \r\nTotal \r\n \r\n$ 19,516,441.49 $ 3,707,737.00 \r\n \r\n$ \r\n \r\n114,279.36 $ \r\n \r\n10,111.00 \r\n \r\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, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: \r\n \r\nYear Ended June 30: \r\n \r\nTRS \r\n \r\nERS \r\n \r\n2021 2022 2023 2024 \r\n \r\n$ 3,004,666.00 $ \r\n \r\n$ \r\n \r\n(65,888.00) $ \r\n \r\n$ 1,823,714.00 $ \r\n \r\n$ 2,105,042.00 $ \r\n \r\n43,124.00 10,613.00 (1,809.00) \r\n1,217.00 \r\n \r\nActuarial assumptions: The total pension liability as of June 30, 2019 was determined by an actuarial valuation as of June 30, 2018, using the following actuarial assumptions, applied to all periods included in the measurement: \r\n \r\nTeachers Retirement System: \r\n \r\nInflation Salary increases Investment rate of return \r\nPost-retirement benefit increases \r\n \r\n2.50% \r\n3.00%  8.75%, average, including inflation \r\n7.25%, net of pension plan investment expense, including inflation 1.50% semi-annually \r\n \r\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. \r\n \r\n- 32 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"I\" \r\n \r\nThe actuarial assumptions used in the June 30, 2018 valuation were based on the results of an actuarial experience study for the period July 1, 2009  June 30, 2014, with the exception of the assumed investment rate of return. \r\nEmployees' Retirement System: \r\n \r\nInflation \r\n \r\n2.75% \r\n \r\nSalary increases \r\n \r\n3.25% - 7.00%, including inflation \r\n \r\nInvestment rate of return \r\n \r\n7.30%, net of pension plan investment expense, including inflation \r\n \r\nPost-retirement mortality rates were based on the RP-2000 Combined Mortality Table with future \r\n \r\nmortality improvement projected to 2025 with the Society of Actuaries' projection scale BB and set \r\n \r\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 \r\n \r\nof Actuaries' projection scale BB and set back 7 years for males and set forward 3 years for females \r\n \r\nwas used for death after disability retirement. There is a margin for future mortality improvement in \r\n \r\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 \r\n \r\nactual number of deaths that occurred during the study period for service retirements and \r\n \r\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. \r\n \r\nThe actuarial assumptions used in the June 30, 2018 valuation were based on the results of an actuarial experience study for the period July 1, 2009  June 30, 2014, with the exception of the assumed investment of return. \r\nPublic School Employees Retirement System: \r\n \r\nInflation Salary increases Investment rate of return \r\nPost-retirement benefit increases \r\n \r\n2.75% \r\nN/A 7.30%, net of pension plan investment expense, including inflation 1.50% semi-annually \r\n \r\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. \r\nThe actuarial assumptions used in the June 30, 2018 valuation were based on the results of an actuarial experience study for the period July 1, 2009  June 30, 2014, with the exception of the assumed investment rate of return. \r\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 \r\n \r\n- 33 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"I\" \r\n \r\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: \r\n \r\nAsset class \r\n \r\nTRS Target allocation \r\n \r\nERS/PSERS Target \r\nallocation \r\n \r\nLong-term expected real rate of return* \r\n \r\nFixed income Domestic large stocks Domestic small stocks International developed market stocks International emerging market stocks Alternative \r\n \r\n30.00% 51.00% \r\n1.50% 12.40% \r\n5.10% - \r\n \r\n30.00% 46.20% \r\n1.30% 12.40% \r\n5.10% 5.00% \r\n \r\n(0.10)% 8.90% 13.20% 8.90% 10.90% 12.00% \r\n \r\nTotal \r\n \r\n100.00% \r\n \r\n100.00% \r\n \r\n* Rates shown are net of assumed rate of inflation. \r\nDiscount Rate: The discount rate used to measure the total TRS pension liability was 7.25%. 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. \r\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 7.25% 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 (6.25% and 6.30%) or 1-percentage-point higher (8.25% and 8.30%) than the current rate: \r\n \r\nTeachers Retirement System: \r\nSchool District's proportionate share of the net pension liability \r\n \r\n1% Decrease (6.25%) \r\n \r\nCurrent Discount Rate (7.25%) \r\n \r\n1% Increase (8.25%) \r\n \r\n$ 112,695,918.00 $ \r\n \r\n69,424,275.00 $ 33,839,610.00 \r\n \r\nEmployees' Retirement System: \r\n \r\n1% Decrease (6.30%) \r\n \r\nCurrent Discount Rate (7.30%) \r\n \r\n1% Increase (8.30%) \r\n \r\nSchool District's proportionate share \r\n \r\nof the net pension liability \r\n \r\n$ \r\n \r\n419,289.00 $ \r\n \r\n295,047.00 $ \r\n \r\n189,133.00 \r\n \r\nPension plan fiduciary net position: Detailed information about the pension plan's fiduciary net \r\n \r\nposition is available in the separately issued TRS, ERS and PSERS financial report which is publicly \r\n \r\navailable at www.trsga.com/publications and http://www.ers.ga.gov/financials. \r\n \r\nPOLK COUNTY SCHOOL DISTRICT SOCIAL SECURITY REPLACEMENT PLAN \r\n \r\nPlan Description: As of January 2004, the School District established a single employer defined benefit pension plan for the group of employees covered under the Public Service Employees Retirement System (PSERS). Recognizing that PSERS was a limited defined benefit plan that does not meet the requirements of a qualified social security replacement plan, the new plan was established for these employees to meet the requirements of a social security replacement plan. \r\n \r\n- 34 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"I\" \r\n \r\nThe School District Social Security Replacement Plan (Plan) provides a pension benefit for each participant at retirement, equal to 1.5% of the participant's Average Monthly Compensation multiplied by his Years of Credited Service up to 40 Years of Credited Service. Years of service subsequent to July 1, 1991, are counted for purposes of determining a participant's benefit. The funding method and determination of benefits payable are provided in or authorized by various sections of Title 47 of the Official Code of Georgia Annotated (\"O.C.G.A.\"). The Plan does not issue a separate financial report. \r\nThe employee is always 100% vested in his accrued benefit in the Plan. \r\nThe Plan is funded by employer contributions held in trust by Reliance Trust Company. The Actuary for the Plan is Swerdlin \u0026 Company. The Actuary determines the Plan liabilities and required contributions on an annual basis. \r\nAs of January 1, 2020, there were 402 Plan participants, consisting of the following: \r\n \r\nJanuary 1, 2020 \r\n \r\nActive Plan members \r\n \r\n111 \r\n \r\nVested terminated participants \r\n \r\n185 \r\n \r\nRetirees, beneficiaries, and disabled participants \r\n \r\n106 \r\n \r\n402 \r\nFunding Policy: Employees are neither required nor permitted to make contributions to the Plan. The Polk County School District (Employer) makes contributions required to fund the cost of the benefits provided to its eligible employees by this Plan. The Employer makes such contributions as necessary to fund the Plan in accordance with all applicable minimum funding standards under Georgia law. \r\nThe Employer's Annual Required Minimum Contribution is the actuarially determined amount necessary to fund the plan benefits. The current year required minimum contribution was $335,053.00. The current year contribution rate was 14.63% of annual covered payroll. Investments: The Plan maintains an investment policy which fosters prudent and sound judgment in the management of plan assets to ensure safety of capital consistent with the fiduciary responsibility to the citizens of Georgia and which conforms to the Plan's investment policy. All investments are consistent with Polk School District's policy and applicable Federal and state laws. \r\nInvestments are reported at fair value. Securities are traded on a national or international exchange and are valued at the last reported sales price. The Plan's investment policy requires diversification of assets in an effort to avoid the risk of large losses and maximize the investment return to the Plan consistent with market and economic risk. \r\nAs of December 31, 2019, the Plan's assets are: \r\nAsset Class \r\n \r\nCash and Equivalent Short-Term Investments Domestic Equities International Equities Fixed Income \r\n \r\n$ \r\n \r\n8,691.12 \r\n \r\n179,746.92 \r\n \r\n2,239,837.68 \r\n \r\n224,950.65 \r\n \r\n1,838,616.26 \r\n \r\n$ 4,491,842.63 \r\nFor the plan year ended December 31, 2019, the annual money-weighted rate of return on pension plan investments, net of plan investment expense, was 18.47%. \r\n- 35 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"I\" \r\n \r\nThe following table summarizes the adopted asset allocation policy at December 31, 2019: \r\n \r\nAsset Class \r\n \r\nAdopted Asset Allocation \r\n \r\nDomestic Equities International Equities Fixed Income Cash \r\n \r\n40% to 50% 1% to 5% \r\n35% to 45% 1% to 10% \r\n \r\nTotal \r\n \r\n100% \r\n \r\nPension Liability, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to the Plan: \r\n \r\nThe components of the net pension liability at December 31, 2019 were as follows: \r\n \r\nTotal pension liability Plan fiduciary net position \r\n \r\n$ 8,243,549.00 (4,491,451.00) \r\n \r\nNet pension liability \r\n \r\n$ 3,752,098.00 \r\n \r\nThe Plan's fiduciary net position as a percentage of its total pension liability is 54.48%. \r\n \r\nThe net pension liability for the Plan was measured as of December 31, 2019. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of January 1, 2020. An expected total pension liability as of December 31, 2019 was determined using standard roll-forward techniques. \r\n \r\nFor the year ended June 30, 2020, the School District recognized pension expense of $437,314.00 for the Plan. \r\n \r\nAt June 30, 2020, the School District reported deferred outflows of resources and deferred inflows of resources related to the Plan from the following sources: \r\n \r\nDifference between projected and actual earnings on pension plan investments \r\n \r\nDeferred Outflows of Resources \r\n \r\nDeferred Inflows of Resources \r\n \r\n$ \r\n \r\n84,727.00 $ 382,614.00 \r\n \r\nDifferences between expected and actual experiences \r\n \r\n479,116.00 \r\n \r\n258,436.00 \r\n \r\nChanges in actuarial assumptions \r\n \r\n330,652.00 \r\n \r\n400,067.00 \r\n \r\nTotal \r\n \r\n$ 894,495.00 $ 1,041,117.00 \r\n \r\n- 36 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"I\" \r\n \r\nAmounts reported as deferred outflows of resources and deferred inflows of resources related to the Plan will be recognized in pension expense as follow: \r\n \r\nYear Ended June 30: \r\n \r\n2020 2021 2022 2023 2024 2025 \r\nActuarial Methods and Assumptions \r\n \r\n$ \r\n \r\n(13,360.00) \r\n \r\n$ \r\n \r\n(15,125.00) \r\n \r\n$ \r\n \r\n13,295.00 \r\n \r\n$ \r\n \r\n(96,329.00) \r\n \r\n$ \r\n \r\n(10,526.00) \r\n \r\n$ \r\n \r\n(24,577.00) \r\n \r\nThe total pension liability was determined as of January 1, 2020 using the following actuarial assumptions and methods (see the January 1, 2020 actuarial valuation report for other assumptions): \r\n \r\nInflation Salary Increases Investment rate of return Single equivalent discount rate \r\n \r\n2.50% 3.00% 7%, net of pension plan investment expense 5.30%, net of pension plan investment expense \r\n \r\nMorality rates were based on the RP-2014 Blue Collar with MP-2018. \r\nThe long-term expected rate of return on the Plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return, net investment expenses and inflation, are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by the expected inflation. Best estimates of arithmetic real rates of return for each major asset class, included in the Plan's target asset allocation as of December 31, 2019: \r\n \r\nAsset Class \r\nDomestic Equities International Equities Fixed Income Cash \r\n \r\nTarget Allocation \r\n \r\nLong-Term Expected Real Rate of Return* \r\n \r\n49% 5% \r\n41% 5% \r\n \r\n6.40% 7.00% 2.75% 1.00% \r\n \r\n*Rates shown are net of the 2.50% assumed rate of inflation. \r\nDiscount Rate: The discount rate used to measure the total pension liability was the single equivalent discount rate shown above. The projection of cash flows used to determine the discount rate assumed that employer contributions will be made at rates equal to actuarially determined contribution rates. Based on this assumption, the Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current Plan members through 2053 and the long-term expected rate of return of 7.00% was applied to this period. The December 31, 2019 20-year tax-free municipal bond yield of 2.74% was applied after 2053. \r\n \r\n- 37 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"I\" \r\n \r\nSensitivity of the Polk County School District's net pension liability to changes in the discount rate: The following represents the net pension liability calculated using the stated discount rate, as well as what the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (4.30%) or 1-percentage-point higher (6.30%) than the current rate: \r\n \r\n1% Decrease (4.30%) \r\n \r\nCurrent Rate (5.30%) \r\n \r\n1% Increase (6.30%) \r\n \r\nSchool District's proportionate share of the net pension liability \r\n \r\n$ 4,795,166.00 $ \r\n \r\n3,752,098.00 $ \r\n \r\n2,878,502.00 \r\n \r\nNOTE 15: RESTATEMENT OF PRIOR YEAR NET POSITION \r\n \r\nFor fiscal year 2020, the School District made prior period adjustments due to the adoption of GASB Statement No. 84, as described in \"New Accounting Pronouncements,\" which requires the restatement of the June 30, 2019 net position in governmental activities and fund balance in the general fund and fiduciary funds. These changes are in accordance with generally accepted accounting principles. \r\n \r\nNet Position, July 1, 2019 as previously reported \r\n \r\n$ (12,174,335.88) \r\n \r\nPrior Period Adjustment - Implementation of GASB No. 84: School Activity Account Reclassification \r\n \r\n112,994.69 \r\n \r\nNet Position, July 1, 2019, as restated \r\n \r\n$ (12,061,341.19) \r\n \r\nFund Balance (General Fund), July 1, 2019, as previously reported $ 19,043,817.05 \r\n \r\nPrior Period Adjustment - Implementation of GASB No. 84: School Activity Account Reclassification \r\n \r\n112,994.69 \r\n \r\nFund Balance (General Fund), July 1, 2019, as restated \r\n \r\n$ 19,156,811.74 \r\n \r\nNet Position (Fiduciary Funds), July 1, 2019 as previously reported $ \r\n \r\n112,994.69 \r\n \r\nPrior Period Adjustment - Implementation of GASB No. 84: Restatement for Custodial Funds Beginning Net Position \r\n \r\n(112,994.69) \r\n \r\nNet Position (Fiduciary Funds), July 1, 2019, as restated \r\n \r\n$ \r\n \r\n- \r\n \r\nNOTE 16: TAX ABATEMENTS \r\nThe Development Authority of Polk County, the Cedartown Development Authority and the Rockmart Development Authority can enter into agreements with private individuals or entities for economic or industrial projects to encourage the creation of jobs and capital investment through an \"Economic Incentive Program.\" This program is used to incentivize these businesses to build, relocate, expand, or renovate within incorporated and unincorporated Polk County. Each agreement provides a property tax benefit to the company through a schedule of discounted valuation that reduces, for ad valorem tax purposes, the fair market value of real and/or personal property that is held by the Authorities and leased to the company. Georgia case law and the Authorities' enabling legislation provides the Authorities with the power to enter into such agreements with private companies. \r\n \r\n- 38 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"I\" \r\n \r\nThe Authorities may accept title to real and personal property assets from a company in return for job creation and capital investment and provide a tax benefit to the company through a lease agreement with the Authority. In considering eligibility for providing this benefit to a company, the Authorities review the following criteria: \r\n1. Eligible businesses can include new and existing industrial businesses. 2. But for an incentive agreement, the company would not create the jobs and investment in \r\nthe community. 3. Eligible projects must involve significant investment in real and personal property. 4. The average wage of the business' employees should be above the average wage of goods \r\nproducing employees in Polk County. 5. The business should offer medical benefits to all employees. 6. The impact to job retention will be considered for each expansion project. 7. As a condition of assistance, a business will be required to work with the Authority to \r\nconvey title to the Authority. \r\nIn return for a property tax benefit, a company is required to commit to creating jobs and capital investment within a defined period as part of a performance and accountability agreement with the Authority that includes provisions for the company to pay back a prorated portion of the benefit if they fail to meet the performance criteria by a specified date. The Authorities monitor compliance with performance and accountability agreements to ensure the companies meet their commitments. \r\nFor the Polk County School District's year ending June 30, 2020 the cumulative property tax not collected due to incentive agreements was $62,645.03; however, $488,687.39 was paid to the Polk County School District through the Economic Incentive Program for the same period. These agreements will result in an estimated $67.0 million in new capital investment for Polk County and more than 186 new/retained jobs. According to the National Association of Manufacturers, the new capital investment will generate an additional $167.4 million in our economy, and the 186 jobs will generate another 632 jobs in other sectors. \r\nIncluded in the $62,645.03 abated, the following are tax abatement agreements amounts with individual companies that each exceed 10.00 percent of the total amount abated: \r\n A property tax abatement was granted to Kimoto Tech in the amount of $21,777.97.  A property tax abatement was granted to Washington Gas in the amount of $6,394.71.  A property tax abatement was granted to Westbound Solar in the amount of $18,543.74.  Property tax abatements were granted to Inman Solar totaling $15,928.61. \r\nNOTE 17: SPECIAL ITEM \r\nDuring fiscal year 2020, the School District received a donation of 5 acres of land on Youngs Farm Road. The fair value of this land is $50,000.00. This is reflected as a special item on Exhibit B of this report. \r\n \r\n- 39 - \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY TEACHERS RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"1\" \r\n \r\nYear Ended \r\n2020 2019 2018 2017 2016 2015 \r\n \r\nSchool District's proportion of the net \r\npension liability \r\n \r\nSchool District's proportionate share of the \r\nnet pension liability \r\n \r\nState of Georgia's proportionate share of the net pension liability \r\nassociated with the School District \r\n \r\n0.322863% $ 0.327378% $ 0.332680% $ 0.342487% $ 0.345774% $ 0.346443% $ \r\n \r\n69,424,275.00 $ 60,768,369.00 $ 61,829,603.00 $ 70,658,887.00 $ 52,640,658.00 $ 43,768,503.00 $ \r\n \r\n327,916.00 289,755.00 748,059.00 944,080.00 600,892.00 560,177.00 \r\n \r\nTotal \r\n$ 69,752,191.00 $ 61,058,124.00 $ 62,577,662.00 $ 71,602,967.00 $ 53,241,550.00 $ 44,328,680.00 \r\n \r\nSchool District's covered payroll \r\n$ 39,589,606.96 $ 39,127,366.15 $ 38,673,234.64 $ 38,069,372.98 $ 36,915,144.69 $ 35,545,926.47 \r\n \r\nSchool District's proportionate share of the net pension liability as a percentage of its \r\ncovered payroll \r\n \r\nPlan fiduciary net position as a \r\npercentage of the total pension liability \r\n \r\n175.36% 155.31% 159.88% 185.61% 142.60% 123.13% \r\n \r\n78.56% 80.27% 79.33% 76.06% 81.44% 84.03% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 41 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \r\nSCHEDULE OF CONTRIBUTIONS TEACHERS RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"2\" \r\n \r\nYear Ended \r\n \r\nContractually required contribution \r\n \r\nContributions in relation to the contractually required \r\ncontribution \r\n \r\nContribution deficiency (excess) \r\n \r\n2020 \r\n \r\n$ \r\n \r\n8,941,170.49 $ \r\n \r\n8,941,170.49 $ \r\n \r\n- \r\n \r\n2019 \r\n \r\n$ \r\n \r\n8,235,903.09 $ \r\n \r\n8,235,903.09 $ \r\n \r\n- \r\n \r\n2018 \r\n \r\n$ \r\n \r\n6,456,048.34 $ \r\n \r\n6,456,048.34 $ \r\n \r\n- \r\n \r\n2017 \r\n \r\n$ \r\n \r\n5,456,446.48 $ \r\n \r\n5,456,446.48 $ \r\n \r\n- \r\n \r\n2016 \r\n \r\n$ \r\n \r\n5,360,865.43 $ \r\n \r\n5,360,865.43 $ \r\n \r\n- \r\n \r\n2015 \r\n \r\n$ \r\n \r\n4,797,913.58 $ \r\n \r\n4,797,913.58 $ \r\n \r\n- \r\n \r\nSchool District's covered payroll \r\n \r\nContribution as a percentage of covered \r\npayroll \r\n \r\n$ 42,459,243.32 $ 39,589,606.96 $ 39,127,366.15 $ 38,673,234.64 $ 38,069,372.98 $ 36,915,144.69 \r\n \r\n21.06% 20.80% 16.73% 14.11% 14.08% 13.00% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 42 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"3\" \r\n \r\nYear Ended \r\n2020 2019 2018 2017 2016 2015 \r\n \r\nSchool District's proportion of the net \r\npension liability \r\n \r\nSchool District's proportionate share of the net pension liability \r\n \r\n0.007150% $ 0.005132% $ 0.005232% $ 0.004803% $ 0.003427% $ 0.003393% $ \r\n \r\n295,047.00 210,978.00 212,489.00 227,202.00 138,841.00 127,258.00 \r\n \r\nSchool District's covered payroll \r\n \r\n$ \r\n \r\n180,218.56 \r\n \r\n$ \r\n \r\n130,926.01 \r\n \r\n$ \r\n \r\n128,331.00 \r\n \r\n$ \r\n \r\n111,677.30 \r\n \r\n$ \r\n \r\n78,360.00 \r\n \r\n$ \r\n \r\n76,400.48 \r\n \r\nSchool District's proportionate share of the net pension liability \r\nas a percentage of covered payroll \r\n \r\nPlan fiduciary net position as a \r\npercentage of the total pension liability \r\n \r\n163.72% 161.14% 165.58% 203.45% 177.18% 166.57% \r\n \r\n76.74% 76.68% 76.33% 72.34% 76.20% 77.99% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 43 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \r\nSCHEDULE OF CONTRIBUTIONS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"4\" \r\n \r\nYear Ended \r\n \r\nContractually required contribution \r\n \r\nContributions in relation to the contractually required \r\ncontribution \r\n \r\nContribution deficiency (excess) \r\n \r\n2020 \r\n \r\n$ \r\n \r\n51,023.36 $ \r\n \r\n51,023.36 $ \r\n \r\n- \r\n \r\n2019 \r\n \r\n$ \r\n \r\n44,658.15 $ \r\n \r\n44,658.15 $ \r\n \r\n- \r\n \r\n2018 \r\n \r\n$ \r\n \r\n32,475.72 $ \r\n \r\n32,475.72 $ \r\n \r\n- \r\n \r\n2017 \r\n \r\n$ \r\n \r\n31,838.88 $ \r\n \r\n31,838.88 $ \r\n \r\n- \r\n \r\n2016 \r\n \r\n$ \r\n \r\n27,606.43 $ \r\n \r\n27,606.43 $ \r\n \r\n- \r\n \r\n2015 \r\n \r\n$ \r\n \r\n17,207.88 $ \r\n \r\n17,207.88 $ \r\n \r\n- \r\n \r\n2014 \r\n \r\n$ \r\n \r\n14,104.00 $ \r\n \r\n14,104.00 $ \r\n \r\n- \r\n \r\n2013 \r\n \r\n$ \r\n \r\n11,306.36 $ \r\n \r\n11,306.36 $ \r\n \r\n- \r\n \r\n2012 \r\n \r\n$ \r\n \r\n2,581.12 $ \r\n \r\n2,581.12 $ \r\n \r\n- \r\n \r\n2011 \r\n \r\n$ \r\n \r\n6,124.09 $ \r\n \r\n6,124.09 $ \r\n \r\n- \r\n \r\nSchool District's covered payroll \r\n \r\n$ \r\n \r\n206,943.46 \r\n \r\n$ \r\n \r\n180,218.56 \r\n \r\n$ \r\n \r\n130,926.01 \r\n \r\n$ \r\n \r\n128,331.00 \r\n \r\n$ \r\n \r\n111,677.30 \r\n \r\n$ \r\n \r\n78,360.00 \r\n \r\n$ \r\n \r\n76,400.48 \r\n \r\n$ \r\n \r\n75,872.88 \r\n \r\n$ \r\n \r\n22,193.64 \r\n \r\n$ \r\n \r\n58,828.91 \r\n \r\nContribution as a percentage of covered \r\npayroll \r\n24.66% 24.78% 24.81% 24.81% 24.72% 21.96% 18.46% 14.90% 11.63% 10.41% \r\n \r\n- 44 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"5\" \r\n \r\nYear Ended \r\n \r\nSchool District's proportion of the net \r\npension liability \r\n \r\nSchool District's proportionate share of the net pension \r\nliability \r\n \r\nState of Georgia's proportionate share of the net pension liability \r\nassociated with the School District \r\n \r\n2020 2019 2018 2017 2016 2015 \r\n \r\n0.00% $ 0.00% $ 0.00% $ 0.00% $ 0.00% $ 0.00% $ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n553,552.00 $ 565,141.00 $ 551,379.00 $ 762,372.00 $ 485,473.00 $ 443,309.00 $ \r\n \r\nTotal \r\n553,552.00 565,141.00 551,379.00 762,372.00 485,473.00 443,309.00 \r\n \r\nSchool District's covered payroll \r\n$ 1,569,655.68 $ 1,712,200.77 $ 1,883,260.87 $ 1,810,170.59 $ 1,791,780.27 $ 1,790,955.74 \r\n \r\nSchool District's proportionate share of the net pension liability as a percentage of its \r\ncovered payroll \r\n \r\nPlan fiduciary net position as a \r\npercentage of the total pension liability \r\n \r\nN/A \r\n \r\n85.02% \r\n \r\nN/A \r\n \r\n85.26% \r\n \r\nN/A \r\n \r\n85.69% \r\n \r\nN/A \r\n \r\n81.00% \r\n \r\nN/A \r\n \r\n87.00% \r\n \r\nN/A \r\n \r\n88.29% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 45 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET OPEB LIABILITY \r\nSCHOOL OPEB FUND FOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"6\" \r\n \r\nYear Ended \r\n \r\nSchool District's proportion of the net \r\nOPEB liability \r\n \r\nSchool District's proportionate share of the net OPEB liability \r\n \r\nState of Georgia's proportionate share of the net OPEB liability \r\nassociated with the School District \r\n \r\n2020 \r\n \r\n0.391779% $ 48,079,689.00 $ \r\n \r\n- \r\n \r\n2019 \r\n \r\n0.396941% $ 50,449,983.00 $ \r\n \r\n- \r\n \r\n2018 \r\n \r\n0.402911% $ 56,608,834.00 $ \r\n \r\n- \r\n \r\nTotal \r\n$ 48,079,689.00 $ 50,449,983.00 $ 56,608,834.00 \r\n \r\nSchool District's covered-employee \r\npayroll \r\n$ 32,761,391.83 $ 32,469,171.98 $ 31,880,339.52 \r\n \r\nSchool District's proportionate share of the \r\nnet OPEB liability as a percentage of its covered- \r\nemployee payroll \r\n146.76% 155.38% 177.57% \r\n \r\nPlan fiduciary net position as a \r\npercentage of the total OPEB liability \r\n4.63% 2.93% 1.61% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 46 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \r\nSCHEDULE OF CONTRIBUTIONS SCHOOL OPEB FUND \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"7\" \r\n \r\nYear Ended \r\n \r\nContractually required contribution \r\n \r\nContributions in relation to the contractually required \r\ncontribution \r\n \r\nContribution deficiency (excess) \r\n \r\n2020 \r\n \r\n$ \r\n \r\n1,336,150.00 $ \r\n \r\n1,336,150.00 $ \r\n \r\n- \r\n \r\n2019 \r\n \r\n$ \r\n \r\n2,110,001.00 $ \r\n \r\n2,110,001.00 $ \r\n \r\n- \r\n \r\n2018 \r\n \r\n$ \r\n \r\n2,057,312.00 $ \r\n \r\n2,057,312.00 $ \r\n \r\n- \r\n \r\n2017 \r\n \r\n$ \r\n \r\n2,100,811.00 $ \r\n \r\n2,100,811.00 $ \r\n \r\n- \r\n \r\nSchool District's covered-employee \r\npayroll \r\n$ 36,339,858.85 $ 32,761,391.83 $ 32,469,171.98 $ 31,880,339.52 \r\n \r\nContribution as a percentage of covered- \r\nemployee payroll \r\n3.68% 6.44% 6.34% 6.59% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 47 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS \r\nSOCIAL SECURITY REPLACEMENT PLAN YEAR ENDING DECEMBER 31 \r\n \r\nSCHEDULE \"8\" \r\n \r\nTotal Pension Liability Service Cost Interest Differences between Expected and Actual Experience Change of Assumptions Benefit Payments \r\nNet Change in Total Pension Liability \r\nTotal Pension Liability - beginning \r\nTotal Pension Liability - ending (a) \r\nPlan Fiduciary Net Position Contributions - employer Net Investment Income Benefit Payments Administrative Expenses Due to Broker \r\nNet change in Plan Fiduciary Net Position \r\nPlan Fiduciary Net Position - beginning \r\nPlan Fiduciary Net Position - ending (b) \r\n \r\n2020 \r\n \r\n2019 \r\n \r\n2018 \r\n \r\n2017 \r\n \r\n2016 \r\n \r\n2015 \r\n \r\n2014 \r\n \r\n$ 200,141.00 $ 205,015.00 $ 202,546.00 $ \r\n \r\n429,921.00 \r\n \r\n424,569.00 \r\n \r\n416,164.00 \r\n \r\n(21,491.00) \r\n \r\n(128,097.00) \r\n \r\n(63,999.00) \r\n \r\n177,923.00 \r\n \r\n(149,027.00) \r\n \r\n128,319.00 \r\n \r\n(358,105.00) \r\n \r\n(333,310.00) \r\n \r\n(332,304.00) \r\n \r\n211,474.00 $ 393,557.00 \r\n70,820.00 (153,139.00) (321,825.00) \r\n \r\n252,078.00 $ 357,947.00 \r\n62,585.00 (61,902.00) (294,805.00) \r\n \r\n203,802.00 $ 378,679.00 (446,217.00) 471,960.00 (244,169.00) \r\n \r\n164,756.00 363,955.00 251,101.00 832,322.00 (221,185.00) \r\n \r\n428,389.00 \r\n \r\n19,150.00 \r\n \r\n350,726.00 \r\n \r\n200,887.00 \r\n \r\n315,903.00 \r\n \r\n364,055.00 \r\n \r\n1,390,949.00 \r\n \r\n7,815,160.00 \r\n \r\n7,796,010.00 \r\n \r\n7,445,284.00 \r\n \r\n7,244,397.00 \r\n \r\n6,928,494.00 \r\n \r\n6,564,439.00 \r\n \r\n5,173,490.00 \r\n \r\n$ 8,243,549.00 $ 7,815,160.00 $ 7,796,010.00 $ 7,445,284.00 $ 7,244,397.00 $ 6,928,494.00 $ 6,564,439.00 \r\n \r\n$ 335,053.00 $ 332,646.00 $ 335,798.00 $ \r\n \r\n684,749.00 \r\n \r\n(271,717.00) \r\n \r\n392,875.00 \r\n \r\n(358,105.00) \r\n \r\n(333,310.00) \r\n \r\n(332,304.00) \r\n \r\n(22,682.00) \r\n \r\n(21,147.00) \r\n \r\n(24,030.00) \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n349,969.00 $ 238,741.00 (321,825.00) (21,220.00) \r\n(1,113.00) \r\n \r\n315,891.00 $ (20,197.00) (294,805.00) (29,660.00) \r\n(1,229.00) \r\n \r\n310,889.00 $ 147,675.00 (244,169.00) (25,205.00) \r\n(4,493.00) \r\n \r\n304,253.00 473,233.00 (221,185.00) (23,094.00) \r\n(242.00) \r\n \r\n639,015.00 \r\n \r\n(293,528.00) \r\n \r\n372,339.00 \r\n \r\n244,552.00 \r\n \r\n(30,000.00) \r\n \r\n184,697.00 \r\n \r\n532,965.00 \r\n \r\n3,852,436.00 \r\n \r\n4,145,964.00 \r\n \r\n3,773,625.00 \r\n \r\n3,529,073.00 \r\n \r\n3,559,073.00 \r\n \r\n3,374,376.00 \r\n \r\n2,841,411.00 \r\n \r\n4,491,451.00 \r\n \r\n3,852,436.00 \r\n \r\n4,145,964.00 \r\n \r\n3,773,625.00 \r\n \r\n3,529,073.00 \r\n \r\n3,559,073.00 \r\n \r\n3,374,376.00 \r\n \r\nNet Pension Liability - ending (a - b) \r\n \r\n$ 3,752,098.00 $ 3,962,724.00 $ 3,650,046.00 $ 3,671,659.00 $ 3,715,324.00 $ 3,369,421.00 $ 3,190,063.00 \r\n \r\nPlan Fiduciary Net Position as a percentage of the Total Pension Liability Covered-Employee Payroll Net Pension Liability as percentage of Covered-Employee Payroll \r\n \r\n54.48% \r\n \r\n49.29% \r\n \r\n53.18% \r\n \r\n50.68% \r\n \r\n48.71% \r\n \r\n51.37% \r\n \r\n51.40% \r\n \r\n$ 2,290,640.00 $ 2,347,678.00 $ 2,416,621.00 $ 2,377,259.00 $ 2,600,407.00 $ 2,562,945.00 $ 2,726,676.00 \r\n \r\n163.80% \r\n \r\n168.79% \r\n \r\n151.04% \r\n \r\n154.45% \r\n \r\n142.87% \r\n \r\n131.47% \r\n \r\n117.00% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 48 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \r\nSCHEDULE OF CONTRIBUTIONS SOCIAL SECURITY REPLACEMENT PLAN FOR THE YEAR ENDED DECEMBER 31 \r\n \r\nSCHEDULE \"9\" \r\n \r\nYear Ended \r\n \r\nActually determined contribution \r\n \r\nContributions in relation to the contractually required contribution \r\n \r\nContribution deficiency (excess) \r\n \r\nSchool District's covered payroll \r\n \r\n2020 \r\n \r\n$ \r\n \r\n2019 \r\n \r\n$ \r\n \r\n2018 \r\n \r\n$ \r\n \r\n2017 \r\n \r\n$ \r\n \r\n2016 \r\n \r\n$ \r\n \r\n2015 \r\n \r\n$ \r\n \r\n2014 \r\n \r\n$ \r\n \r\n335,053.00 $ 332,646.00 $ 335,798.00 $ 328,611.00 $ 315,891.00 $ 310,889.00 $ 304,253.00 $ \r\n \r\n335,053.00 $ 332,646.00 $ 335,798.00 $ 349,969.00 $ 315,891.00 $ 310,889.00 $ 304,253.00 $ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n(21,358.00) $ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n2,290,640.00 2,347,678.00 2,416,621.00 2,377,259.00 2,600,407.00 2,562,945.00 2,726,676.00 \r\n \r\nContribution as a percentage of covered \r\npayroll \r\n14.63% 14.17% 13.90% 14.72% 12.15% 12.13% 11.16% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 49 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF INVESTMENT RETURNS SOCIAL SECURITY REPLACEMENT PLAN \r\nYEAR ENDING DECEMBER 31 \r\n \r\nYear Ended \r\n2020 2019 2018 2017 2016 2015 2014 \r\n \r\nAnnual Money - Weighted Rate of Return, Net of Investment Expense \r\n18.47% (6.73)% 10.88% \r\n7.04% (0.59)% \r\n4.55% 17.25% \r\n \r\nSCHEDULE \"10\" \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 50 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION \r\nFOR THE YEAR ENDED JUNE 30, 2020 \r\n \r\nSCHEDULE \"11\" \r\n \r\nTeachers Retirement System \r\n \r\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. \r\n \r\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 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). \r\n \r\nOn May 15, 2019, the Board adopted recommended changes from the smoothed valuation interest rate methodology that has been in effect since June 30, 2009, to a constant interest rate method. In conjunction with the methodology, the long-term assumed rate of return in assets (discount rate) has been changed from 7.50% to 7.25%, and the assumed annual rate of inflation has been reduced from 2.75% to 2.50%. \r\nEmployees' Retirement System \r\n \r\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. \r\n \r\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, withdrawal and salary increases. \r\n \r\nOn 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. \r\nPublic School Employees Retirement System \r\n \r\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. \r\n \r\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). \r\n \r\nOn 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. \r\nSchool OPEB Fund \r\n \r\nChanges of benefit terms: There have been no changes in benefit terms. \r\n \r\nChanges in assumptions: 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 State OPEB fund based on their last employer payroll location; irrespective of retirement affiliation. \r\n \r\nThe discount rate was updated from 3.07% as of June 30, 2016 to 3.58% as of June 30, 2017 to 3.87% as of June 30, 2018, and back to 3.58% as of June 30, 2019. Social Security Replacement Plan \r\n \r\nChanges of assumptions: There were no changes in benefits that affected the measurement of the total pension liability since the prior measurement date. However, in 2020 the amounts reported as changes in assumptions resulted from an decrease in the discount rate from 5.49% to 5.30% since the prior measurement date. \r\n \r\nMethod and assumptions used in calculations of actuarially determined contributions: The actuarially determined contribution rates in the schedule of contributions are calculated as of January 1, 2020. The following actuarial methods and assumptions were used to determine the contractually required contributions for year ended June 30, 2020 reported in that schedule: \r\n \r\nValuation date Actuarial cost method Amortization method Remaining amortization period Asset valuation method \r\nInflation rate Salary increases Investment rate of return \r\n \r\nJanuary 1, 2020 Entry age Level percentage of payroll 19 years Method recognized a portion of the difference between the market value of assets and expected actuarial value of assets, based on the assumed interest rate of return. The amount recognized each year is 20% of the difference between market value and expected actuarial value. 2.50% 3.00%, per annum 7.00%, net of pension plan investment \r\n \r\n- 51 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT GENERAL FUND \r\nSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL \r\nYEAR ENDED JUNE 30, 2020 \r\n \r\nSCHEDULE \"12\" \r\n \r\nREVENUES \r\nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous \r\nTotal Revenues \r\nEXPENDITURES \r\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 \r\nTotal Expenditures \r\nExcess of Revenues over (under) Expenditures \r\nOTHER FINANCING USES \r\nOther Uses \r\nNet Change in Fund Balances \r\nFund Balances - Beginning - Restated \r\nFund Balances - Ending \r\n \r\nNONAPPROPRIATED BUDGETS \r\n \r\nORIGINAL (1) \r\n \r\nFINAL (1) \r\n \r\nACTUAL AMOUNTS \r\n \r\nVARIANCE OVER/UNDER \r\n \r\n$ 13,035,000.00 $ 13,035,000.00 $ 17,007,026.01 $ \r\n \r\n- \r\n \r\n- \r\n \r\n258,511.95 \r\n \r\n55,056,209.52 \r\n \r\n56,011,158.69 \r\n \r\n56,745,360.37 \r\n \r\n5,353,876.00 \r\n \r\n8,259,672.00 \r\n \r\n10,304,367.03 \r\n \r\n- \r\n \r\n- \r\n \r\n2,150,760.59 \r\n \r\n- \r\n \r\n- \r\n \r\n71,204.76 \r\n \r\n250,000.00 \r\n \r\n250,000.00 \r\n \r\n944,865.95 \r\n \r\n3,972,026.01 258,511.95 734,201.68 \r\n2,044,695.03 2,150,760.59 \r\n71,204.76 694,865.95 \r\n \r\n73,695,085.52 \r\n \r\n77,555,830.69 \r\n \r\n87,482,096.66 \r\n \r\n9,926,265.97 \r\n \r\n54,347,506.08 \r\n2,189,100.50 1,764,317.91 1,154,628.27 \r\n720,088.36 4,404,008.72 1,087,518.76 6,684,149.28 2,924,919.86 \r\n205,814.96 43,494.00 - \r\n75,525,546.70 \r\n(1,830,461.18) \r\n \r\n56,412,432.63 \r\n2,464,796.50 1,657,728.97 1,156,940.45 \r\n675,417.36 4,440,835.63 1,087,518.76 7,464,484.22 2,907,085.86 \r\n205,814.96 51,128.55 - \r\n3,526,524.98 \r\n82,050,708.87 \r\n(4,494,878.18) \r\n \r\n54,816,126.68 \r\n3,701,353.30 1,276,515.63 1,216,207.96 \r\n905,887.38 4,568,914.03 \r\n890,692.72 7,341,791.41 2,773,948.88 \r\n188,655.33 52,069.31 40,934.81 \r\n4,940,233.05 \r\n82,713,330.49 \r\n4,768,766.17 \r\n \r\n1,596,305.95 \r\n(1,236,556.80) 381,213.34 (59,267.51) (230,470.02) (128,078.40) 196,826.04 122,692.81 133,136.98 17,159.63 (940.76) (40,934.81) \r\n(1,413,708.07) \r\n(662,621.62) \r\n9,263,644.35 \r\n \r\n(350,000.00) (2,180,461.18) 17,550,136.39 \r\n \r\n(350,000.00) (4,844,878.18) 19,197,686.15 \r\n \r\n4,768,766.17 19,156,811.74 \r\n \r\n350,000.00 9,613,644.35 \r\n(40,874.41) \r\n \r\n$ 15,369,675.21 $ 14,352,807.97 $ 23,925,577.91 $ 9,572,769.94 \r\n \r\nNotes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual \r\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 $2,118,675.44 and $2,148,800.12, respectively. \r\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. \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 52 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \r\nYEAR ENDED JUNE 30, 2020 \r\n \r\nSCHEDULE \"13\" \r\n \r\nFUNDING AGENCY PROGRAM/GRANT \r\nAgriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program \r\nTotal U. S. Department of Agriculture \r\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 \r\nTotal Special Education Cluster \r\nOther Programs Pass-Through From Georgia Department of Education Career and Technical Education - Basic Grants to States Education Stabilization CARES Relief Act English Language Acquisition State Grants English Language Acquisition State Grants 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 \r\nTotal Other Programs \r\nTotal U. S. Department of Education \r\n \r\nCFDA NUMBER \r\n \r\nPASSTHROUGH \r\nENTITY ID \r\nNUMBER \r\n \r\nEXPENDITURES IN PERIOD \r\n \r\n10.553 10.555 \r\n \r\n205GA324N1099 $ 205GA324N1099 \r\n \r\n1,526,742.81 3,199,006.87 \r\n4,725,749.68 \r\n \r\n84.027 84.027 84.173 84.173 \r\n \r\nH027A180073 H027A190073 H173A180081 H173A190081 \r\n \r\n84.048 84.425D 84.365 84.365 84.358 84.358 84.424A 84.424A 84.367 84.367 84.010 84.010 \r\n \r\nV048A190010 S425D200012 S365A180010 S365A190010 S365B180010 S358B190010 S424A180011 S424A190011 S367A180001 S367A190001 S010A180010 S010A190010 \r\n \r\n302,178.00 1,409,478.63 \r\n21,185.00 23,517.34 \r\n1,756,358.97 \r\n98,675.00 390,185.88 \r\n23,273.00 65,965.83 \r\n6,490.00 112,643.61 \r\n40,082.00 117,383.39 221,121.00 \r\n18,170.09 551,128.23 1,920,196.39 \r\n3,565,314.42 \r\n5,321,673.39 \r\n \r\nTotal Expenditures of Federal Awards \r\n \r\n$ \r\n \r\n10,047,423.07 \r\n \r\nNotes to the Schedule of Expenditures of Federal Awards \r\nNote 1. Basis of Presentation \r\nThe accompanying schedule of expenditures of federal awards (the \"Schedule\") includes the federal award activity of the Polk County School District (the \"District\") under programs of the federal government for the year ended June 30, 2020. 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. \r\nNote 2. Summary of Significant Accounting Policies \r\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. \r\nNote 3. Indirect Cost Rate \r\nThe Board has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 53 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF STATE REVENUE \r\nYEAR ENDED JUNE 30, 2020 \r\n \r\nSCHEDULE \"14\" \r\n \r\nAGENCY/FUNDING \r\n \r\nGRANTS \r\n \r\nBright From the Start: \r\n \r\nGeorgia Department of Early Care and Learning \r\n \r\nPre-Kindergarten Program \r\n \r\n$ \r\n \r\nEducation, 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 Amended Formula Adjustment Categorical Grants Pupil Transportation Regular Nursing Services Vocational Supervisors Education Equalization Funding Grant Other State Programs Food Services Hygiene Products in Georgia Schools Math and Science Supplements Preschool Disability Services Pupil Transportation - State Bonds Residential Treatment Centers Grant School Safety Grant School Security Grant Teachers Retirement Vocational Education \r\n \r\nGeorgia State Financing and Investment Commission Reimbursement on Construction Projects \r\n \r\nOffice of the State Treasurer Public School Employees Retirement \r\n \r\nCONTRACTS Human Resources, Georgia Department of Children in Need of Services Program Family Connection \r\n \r\nGOVERNMENTAL FUND TYPES CAPITAL \r\n \r\nGENERAL FUND \r\n \r\nPROJECTS FUND \r\n \r\n1,373,602.69 $ \r\n \r\n- $ \r\n \r\n2,933,300.00 \r\n \r\n- \r\n \r\n336,547.00 \r\n \r\n- \r\n \r\n6,466,974.00 \r\n \r\n- \r\n \r\n755,667.00 \r\n \r\n- \r\n \r\n3,466,251.00 \r\n \r\n- \r\n \r\n386,480.00 \r\n \r\n- \r\n \r\n5,878,982.00 \r\n \r\n- \r\n \r\n4,719,814.00 \r\n \r\n- \r\n \r\n1,991,062.00 \r\n \r\n- \r\n \r\n7,539,249.00 \r\n \r\n- \r\n \r\n1,369,360.00 \r\n \r\n- \r\n \r\n625,603.00 \r\n \r\n- \r\n \r\n417,001.00 \r\n \r\n- \r\n \r\n1,141,916.00 \r\n \r\n- \r\n \r\n1,004,712.00 \r\n \r\n- \r\n \r\n309,741.00 \r\n \r\n- \r\n \r\n173,167.00 \r\n \r\n- \r\n \r\n3,279.00 \r\n \r\n- \r\n \r\n1,478,667.00 \r\n \r\n- \r\n \r\n2,019,729.00 \r\n \r\n- \r\n \r\n2,119,595.00 \r\n \r\n- \r\n \r\n(701,847.00) \r\n \r\n- \r\n \r\n820,787.00 \r\n \r\n- \r\n \r\n166,769.00 \r\n \r\n- \r\n \r\n28,280.00 \r\n \r\n- \r\n \r\n7,954,400.00 \r\n \r\n- \r\n \r\n129,624.00 \r\n \r\n- \r\n \r\n17,796.00 \r\n \r\n- \r\n \r\n28,873.73 \r\n \r\n- \r\n \r\n228,227.79 \r\n \r\n- \r\n \r\n308,880.00 \r\n \r\n- \r\n \r\n514,518.00 \r\n \r\n- \r\n \r\n49,310.86 \r\n \r\n- \r\n \r\n357,150.52 \r\n \r\n- \r\n \r\n32,702.13 \r\n \r\n- \r\n \r\n136,969.00 \r\n \r\n- \r\n \r\n111,379.00 \r\n \r\n940,387.66 - \r\n \r\n841.65 \r\n \r\n- \r\n \r\n50,000.00 \r\n \r\n- \r\n \r\nTOTAL \r\n1,373,602.69 \r\n2,933,300.00 336,547.00 \r\n6,466,974.00 755,667.00 \r\n3,466,251.00 386,480.00 \r\n5,878,982.00 4,719,814.00 1,991,062.00 7,539,249.00 1,369,360.00 \r\n625,603.00 417,001.00 1,141,916.00 1,004,712.00 309,741.00 173,167.00 \r\n3,279.00 \r\n1,478,667.00 2,019,729.00 2,119,595.00 \r\n(701,847.00) \r\n820,787.00 166,769.00 \r\n28,280.00 7,954,400.00 \r\n129,624.00 17,796.00 28,873.73 \r\n228,227.79 308,880.00 514,518.00 \r\n49,310.86 357,150.52 \r\n32,702.13 136,969.00 \r\n940,387.66 \r\n111,379.00 \r\n841.65 50,000.00 \r\n \r\n$ 56,745,360.37 $ \r\n \r\n940,387.66 $ \r\n \r\n57,685,748.03 \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 54 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \r\nYEAR ENDED JUNE 30, 2020 \r\n \r\nSCHEDULE \"15\" \r\n \r\nPROJECT \r\n \r\nSPLOST V \r\n \r\nConstruction, remodeling, improving, and \r\n \r\nequipping of existing facilities including \r\n \r\nCedartown High School, Rockmart High \r\n \r\nSchool, Westside Elementary School and \r\n \r\nEastside Elementary School. \r\n \r\n$ \r\n \r\nSPLOST VI \r\n \r\nFor the purposes acquiring, constructing, and equipping the following capital projects: \r\n \r\nElementary school classroom additions and related facilities, roofing and air conditioning HVAC improvements, track resurfacing at Rockmart and Cedartown High Schools, gym renovations at Rockmart High School, parking lots and access roads, equipment and furnishings, technology devices, and physical education and athletic equipment; \r\n \r\nSystem-wide instructional and administrative technology/infrastructure; \r\n \r\nCedartown High School Fine Arts building with the expansion of and improvements to band and drama facilities, college and career facilities, and expansions to administrative offices; \r\n \r\nORIGINAL ESTIMATED \r\nCOST (1) \r\n300,000.00 $ \r\n11,644,647.02 1,750,000.00 6,850,682.01 \r\n \r\nCURRENT ESTIMATED COSTS (2) \r\n \r\nAMOUNT EXPENDED IN CURRENT YEAR (3) (4) \r\n \r\nAMOUNT EXPENDED IN PRIOR YEARS (3) (4) \r\n \r\nTOTAL COMPLETION \r\nCOST \r\n \r\nEXCESS PROCEEDS NOT \r\nEXPENDED \r\n \r\n1,464,552.00 $ \r\n \r\n457,180.41 $ \r\n \r\n841,248.64 $ \r\n \r\n- $ \r\n \r\n- \r\n \r\n4,358,419.00 \r\n \r\n2,866,402.18 \r\n \r\n477,037.69 \r\n \r\n- \r\n \r\n- \r\n \r\n1,250,000.00 \r\n \r\n3,434.29 \r\n \r\n940,504.09 \r\n \r\n- \r\n \r\n- \r\n \r\n8,902,047.36 \r\n \r\n5,622,391.52 \r\n \r\n3,279,655.84 \r\n \r\n- \r\n \r\n- \r\n \r\nRockmart High agriculture barn/learning \r\n \r\ncenter and college and career facilities; \r\n \r\n1,276,159.00 \r\n \r\n1,297,842.65 \r\n \r\n5,000.00 \r\n \r\n1,292,842.65 \r\n \r\n1,297,842.65 \r\n \r\n- \r\n \r\nSystem-wide Safety and Security systems \r\n \r\nand Equipment; \r\n \r\n284,750.00 \r\n \r\n327,113.12 \r\n \r\n- \r\n \r\n320,789.48 \r\n \r\n- \r\n \r\n- \r\n \r\nPress box at Rockmart High School; \r\n \r\n480,000.00 \r\n \r\n444,547.00 \r\n \r\n261,718.97 \r\n \r\n182,828.03 \r\n \r\n444,547.00 \r\n \r\n- \r\n \r\nConcession Stand-Rockmart High School/ Rockmart Middle \r\n \r\n274,002.00 \r\n \r\n33,741.36 \r\n \r\n33,741.36 \r\n \r\n- \r\n \r\n33,741.36 \r\n \r\n- \r\n \r\nPurchasing school buses; \r\n \r\n889,000.00 \r\n \r\n889,000.00 \r\n \r\n177,800.00 \r\n \r\n177,800.00 \r\n \r\n- \r\n \r\n- \r\n \r\nRockmart Middle School field house; \r\n \r\n- \r\n \r\n200,000.00 \r\n \r\n198,749.99 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\nPurchasing vocational, fine arts and cafeteria equipment; \r\nPurchasing textbooks; \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\nAcquiring real and personal property necessary or to be used for the foregoing purposes; \r\n \r\n301,142.00 \r\n \r\n368,746.78 \r\n \r\n50,325.00 \r\n \r\n318,421.78 \r\n \r\n368,746.78 \r\n \r\n- \r\n \r\nAll other general purposes related to these capital outlay projects; \r\n \r\n925,008.00 \r\n \r\n784,793.03 \r\n \r\n703,372.68 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n2017 bond issuance costs. \r\n \r\n324,609.97 \r\n \r\n326,759.97 \r\n \r\n1,075.00 \r\n \r\n325,684.97 \r\n \r\n- \r\n \r\n- \r\n \r\n25,000,000.00 \r\n \r\n19,183,010.27 \r\n \r\n9,924,010.99 \r\n \r\n7,315,564.53 \r\n \r\n2,144,877.79 \r\n \r\n- \r\n \r\nESTIMATED COMPLETION \r\nDATE \r\n6/30/2021 \r\n6/30/2026 6/30/2021 \r\n6/30/2021 COMPLETE 6/30/2021 COMPLETE COMPLETE 6/30/2024 6/30/2021 \r\nCOMPLETE 6/30/2021 6/30/2026 \r\n \r\nTotal \r\n \r\n$ 25,300,000.00 $ 20,974,322.24 $ 10,381,191.40 $ 8,156,813.17 $ 2,144,877.79 $ \r\n \r\n- \r\n \r\n(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax. \r\n \r\n(2) The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion. \r\n \r\n(3) The voters of Polk 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. \r\n \r\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: \r\n \r\nPrior Year \r\n \r\n$ 2,979,195.00 \r\n \r\nCurrent year \r\n \r\n1,090,750.00 \r\n \r\nTotal \r\n \r\n$ 4,069,945.00 \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 55 - \r\n \r\n (This page left intentionally blank) \r\n \r\n SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS \r\n \r\n (This page left intentionally blank) \r\n \r\n Greg S. Griffin \r\nSTATE AUDITOR \r\n(404) 656-2174 \r\n \r\nDEPARTMENT OF AUDITS AND ACCOUNTS \r\n270 Washington Street, S.W., Suite 4-101 Atlanta, Georgia 30334-8400 \r\n \r\nINDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON \r\nCOMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS \r\n \r\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 \r\nand Superintendent and Members of the Polk County School District \r\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 Polk County School District (School District), as of and for the year ended June 30, 2020, 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 July 13, 2021. \r\nInternal Control Over Financial Reporting \r\nIn planning and performing our audit of the financial statements, we considered the School District's internal control over financial reporting (internal control) as a basis for designing 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. \r\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. \r\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. \r\n \r\n (This page left intentionally blank) \r\n \r\n Compliance and Other Matters \r\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 financial statements. 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. \r\nPurpose of this Report \r\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. \r\nRespectfully submitted, \r\n \r\nJuly 13, 2021 \r\n \r\nGreg S. Griffin State Auditor \r\n \r\n (This page left intentionally blank) \r\n \r\n Greg S. Griffin \r\nSTATE AUDITOR \r\n(404) 656-2174 \r\n \r\nDEPARTMENT OF AUDITS AND ACCOUNTS \r\n270 Washington Street, S.W., Suite 4-101 Atlanta, Georgia 30334-8400 \r\n \r\nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE \r\n \r\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 \r\nand Superintendent and Members of the Polk County School District \r\nReport on Compliance for Each Major Federal Program \r\nWe have audited the Polk County School District'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, 2020. 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. \r\nManagement's Responsibility \r\nManagement is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. \r\nAuditor's Responsibility \r\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. \r\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. \r\n \r\n (This page left intentionally blank) \r\n \r\n Opinion on Each Major Federal Program \r\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, 2020. \r\nReport on Internal Control over Compliance \r\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. \r\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. \r\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. \r\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. \r\nRespectfully submitted, \r\n \r\nJuly 13, 2021 \r\n \r\nGreg S. Griffin State Auditor \r\n \r\n (This page left intentionally blank) \r\n \r\n SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT AUDITEE'S RESPONSE \r\nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2020 \r\nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\nNo matters were reported. \r\nPRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \r\nNo matters were reported. \r\n \r\n (This page left intentionally blank) \r\n \r\n SECTION IV FINDINGS AND QUESTIONED COSTS \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2020 \r\n \r\nI SUMMARY OF AUDITOR'S RESULTS \r\n \r\nFinancial Statements \r\nType of auditor's report issued: Governmental Activities; All Major Funds; Aggregate Remaining Fund Information \r\n \r\nUnmodified \r\n \r\nInternal control over financial reporting:  Material weakness identified?  Significant deficiency identified? \r\n \r\nNo None Reported \r\n \r\nNoncompliance material to financial statements noted: \r\n \r\nNo \r\n \r\nFederal Awards \r\n \r\nInternal Control over major programs:  Material weakness identified?  Significant deficiency identified? \r\n \r\nNo None Reported \r\n \r\nType of auditor's report issued on compliance for major programs: All major programs \r\n \r\nUnmodified \r\n \r\nAny audit findings disclosed that are required to be reported in \r\n \r\naccordance with 2 CFR 200.516(a)? \r\n \r\nNo \r\n \r\nIdentification of major programs: CFDA Numbers \r\n \r\nName of Federal Program or Cluster \r\n \r\n84.010 84.027, 84.173 \r\n \r\nTitle I Grants to Local Educational Agencies Special Education Cluster \r\n \r\nDollar threshold used to distinguish between Type A and Type B programs: Auditee qualified as low-risk auditee? \r\n \r\n$750,000.00 No \r\n \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. \r\n \r\n "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-be26-bp7-b2019-belec-p-btext","title":"Polk School District, Cedartown, 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":["2020-07-26"],"dcterms_description":["Annual financial report for the Polk 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":["Polk School District (Ga.)--Appropriations and expenditures--Periodicals.","Education--Georgia--Polk County--Auditing--Periodicals.","Education--Georgia--Polk County--Finance--Statistics--Periodicals.","Georgia Government Documents--Serial"],"dcterms_title":["Polk School District, Cedartown, 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-bp7-b2019-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-be26-bp7-b2019-belec-p-btext"],"dcterms_temporal":null,"dcterms_rights_holder":null,"dcterms_bibliographic_citation":null,"dlg_local_right":null,"dcterms_medium":["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":"POLK SCHOOL DISTRICT CEDARTOWN, GEORGIA \r\nANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED \r\nJUNE 30, 2019 (Including Independent Auditor's Reports) \r\n \r\n POLK COUNTY SCHOOL DISTRICT - TABLE OF CONTENTS - \r\n \r\nSECTION I \r\n \r\nFINANCIAL \r\n \r\nINDEPENDENT AUDITOR'S REPORT \r\n \r\nREQUIRED SUPPLEMENTARY INFORMATION \r\n \r\nMANAGEMENT'S DISCUSSION AND ANALYSIS \r\n \r\nEXHIBITS \r\n \r\nBASIC FINANCIAL STATEMENTS \r\n \r\nGOVERNMENT-WIDE FINANCIAL STATEMENTS \r\n \r\nA \r\n \r\nSTATEMENT OF NET POSITION \r\n \r\nB \r\n \r\nSTATEMENT OF ACTIVITIES \r\n \r\nFUND FINANCIAL STATEMENTS \r\n \r\nC \r\n \r\nBALANCE SHEET \r\n \r\nGOVERNMENTAL FUNDS \r\n \r\nD \r\n \r\nRECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \r\n \r\nTO THE STATEMENT OF NET POSITION \r\n \r\nE \r\n \r\nSTATEMENT OF REVENUES, EXPENDITURES AND CHANGES \r\n \r\nIN FUND BALANCES \r\n \r\nGOVERNMENTAL FUNDS \r\n \r\nF \r\n \r\nRECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT \r\n \r\nOF REVENUES, EXPENDITURES AND CHANGES IN FUND \r\n \r\nBALANCES TO THE STATEMENT OF ACTIVITIES \r\n \r\nG \r\n \r\nSTATEMENT OF FIDUCIARY NET POSITION \r\n \r\nFIDUCIARY FUNDS \r\n \r\nH \r\n \r\nSTATEMENT OF CHANGES IN FIDUCIARY NET POSITION \r\n \r\nFIDUCIARY FUNDS \r\n \r\nI NOTES TO THE BASIC FINANCIAL STATEMENTS \r\n \r\nSCHEDULES \r\n \r\nREQUIRED SUPPLEMENTARY INFORMATION \r\n \r\n1 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY TEACHERS RETIREMENT SYSTEM OF GEORGIA \r\n2 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \r\n3 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA \r\n4 SCHEDULE OF PROPORTIONATE SHARE OF THE NET OPEB LIABILITY SCHOOL OPEB FUND \r\n5 SCHEDULE OF CONTRIBUTIONS - TEACHERS RETIREMENT SYSTEM OF GEORGIA 6 SCHEDULE OF CONTRIBUTIONS - EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \r\n \r\nPage \r\ni \r\n1 2 \r\n4 5 6 7 8 9 11 \r\n43 44 45 46 47 48 \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT - TABLE OF CONTENTS - \r\n \r\nSECTION I \r\n \r\nFINANCIAL \r\n \r\nSCHEDULES \r\n \r\nREQUIRED SUPPLEMENTARY INFORMATION \r\n \r\n7 SCHEDULE OF CONTRIBUTIONS - SCHOOL OPEB FUND 8 SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS  \r\nSOCIAL SECURITY REPLACEMENT PLAN 9 SCHEDULE OF CONTRIBUTIONS  SOCIAL SECURITY REPLACEMENT PLAN 10 SCHEDULE OF INVESTMENT RETURNS  SOCIAL SECURITY REPLACEMENT PLAN 11 NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION 12 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES \r\nIN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND \r\n \r\nSUPPLEMENTARY INFORMATION \r\n \r\n13 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 14 SCHEDULE OF STATE REVENUE 15 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \r\n \r\nPage \r\n49 50 51 52 53 \r\n54 \r\n55 56 57 \r\n \r\nSECTION II \r\nCOMPLIANCE AND INTERNAL CONTROL REPORTS \r\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 \r\nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE \r\n \r\nSECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS \r\n \r\nSECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\n \r\n (This page left intentionally blank) \r\n \r\n SECTION I FINANCIAL \r\n \r\n (This page left intentionally blank) \r\n \r\n Greg S. Griffin \r\nSTATE AUDITOR \r\n(404) 656-2174 \r\n \r\nDEPARTMENT OF AUDITS AND ACCOUNTS \r\n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \r\n \r\nINDEPENDENT AUDITOR'S REPORT \r\n \r\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 \r\nand Superintendent and Members of the Polk County School District \r\nReport on the Financial Statements \r\nWe have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Polk County School District (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. \r\nManagement's Responsibility for the Financial Statements \r\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. \r\nAuditor's Responsibility \r\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. \r\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. \r\n \r\n (This page left intentionally blank) \r\n \r\n We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. \r\nOpinions \r\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. \r\nOther Matters \r\nRequired Supplementary Information \r\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. \r\nOther Information \r\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. \r\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 taken as a whole. \r\n \r\n (This page left intentionally blank) \r\n \r\n Other Reporting Required by Government Auditing Standards \r\nIn accordance with Government Auditing Standards, we have also issued our report dated July 26, 2020 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. \r\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. \r\nRespectfully submitted, \r\n \r\nJuly 26, 2020 \r\n \r\nGreg S. Griffin State Auditor \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2019 \r\nINTRODUCTION \r\nThe intent of this discussion and analysis is to look at the Polk County School District's (School District) financial performance as a whole. The reader should review the notes to the basic financial statements and the financial statements to enhance their understanding of the School District's financial performance. The School District's financial statements for the fiscal year ended June 30, 2019 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 Position 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. The fund financial statements provide information about all of the School District's funds. \r\nFINANCIAL HIGHLIGHTS \r\nKey financial highlights for fiscal year 2019 are as follows: \r\nOn the Government-wide financial statements: \r\n Government-wide net position at June 30, 2019 was approximately ($12.2) million. Net position reflects the difference between all assets of the School District (including capital assets, net of depreciation), deferred outflows and all liabilities, both short-term and long-term and deferred inflows. The net position at June 30, 2019 of ( $12.2) million represented a n i n crease of approximately $9.0 million when compared to the prior year. This large increase is primarily due to overall decrease in liabilities and an increase in construction in progress capitalized as an asset. The School District is currently constructing a fine arts building. \r\n The School District had $78.1 million in expenses relating to governmental activities; only $57.5 million of these expenses were offset by program specific charges for services and operating grants and contributions. However, the general revenues (primarily property and sales taxes) of approximately $29.7 provided additional funding of these expenses. \r\n As stated above, general revenues accounted for $29.7 million or about 34% of all revenues totaling approximately $87.2 million. Program specific revenues in the form of charges for services, operating grants, and contributions accounted for the balance of these revenues. \r\n \r\nGeneral RevenueSales Taxes \r\n \r\nSource of Revenues \r\n \r\nGeneral \r\n \r\nGeneral \r\n \r\nRevenue- All \r\n \r\nRevenueEqualization \r\n7% \r\n \r\nOther 2% \r\n \r\n7% \r\n \r\nGeneral \r\n \r\nRevenue- \r\n \r\nProperty Taxes 18% \r\n \r\nProgram Revenues \r\n \r\n66% \r\n \r\ni \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2019 \r\nOn the fund financial statements: \r\n Among major funds, the general fund had approximately $81.4 million in revenues and $76.9 million in expenditures. The general fund balance of approximately $19.0 million at June 30, 2019 increased by approximately $4.6 million from the prior year. \r\nOVERVIEW OF THE FINANCIAL STATEMENTS \r\nThis annual report consist of three parts; management's discussion and analysis (this section), the basic financial statements, including notes to the 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. \r\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 School District's overall financial status. \r\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 School District, the general fund, capital projects fund, and debt service fund are all considered to be major funds. The School District has no non-major funds as defined by GASB Statement No. 34 for purposes of this report. \r\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. \r\nGovernment-Wide Statements \r\nSince the School District has no operations that have been classified as \"Business Activities\", the government-wide financial statements are basically a consolidation of the entire School District's operating funds into one column called governmental activities. In reviewing the government-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 School District's assets, deferred outflows, liabilities, and deferred inflows 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. \r\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. \r\nii \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2019 \r\nWhen analyzing government-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: \r\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 \r\nthe accrual basis of accounting  Allocate net position as follows: \r\no Net Investment in Capital Assets o Restricted net position is that with constraints placed on the use by external \r\nsources such as creditors, grantors, contributors or laws and regulations. o Unrestricted net position is net position that does not meet any of the above \r\nrestrictions. \r\nFund Financial Statements \r\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 non-major funds as defined by generally accepted accounting principles. \r\nThe School District has two kinds of funds as discussed below: \r\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. \r\nFiduciary Funds  The School District is the trustee, or fiduciary, for assets that belong to clubs, organizations and others within the principals' accounts as well as an employer sponsored pension plan. 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 government-wide financial statements because it cannot use these assets to finance its operations. \r\nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT AS A WHOLE \r\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 School 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 decreases in the School \r\niii \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2019 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 non-financial factors should be considered in assessing the overall health of the School District. The School District had approximately $81.0 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 position, it must be recognized that this portion of the net position is not available for future spending. The deficit balance of unrestricted net position of approximately $101.8 million reflects the net pension liability adjustments as required by GASB Statement No. 68 and GASB Statement No. 71 and the OPEB liability adjustments as required by GASB Statement No. 75. \r\niv \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2019 \r\nTable 1 provides a summary of the School District's net position for this fiscal year as compared to the prior fiscal year. \r\nTable 1 Net Position \r\n \r\nAssets Current and Other Assets Capital Assets, Net \r\n \r\nGovernmental Activities \r\n \r\nFiscal Year \r\n \r\nFiscal Year \r\n \r\n2019 \r\n \r\n2018 \r\n \r\n$ \r\n \r\n45,770,230 $ 44,110,997 \r\n \r\n96,023,350 \r\n \r\n93,175,242 \r\n \r\nTotal Assets \r\n \r\n141,793,580 \r\n \r\n137,286,239 \r\n \r\nDeferred Outflows of Resources Related Defined Benefits Pension Plans Related OPEB Plan \r\n \r\n14,203,373 2,178,260 \r\n \r\n10,928,135 2,073,869 \r\n \r\nTotal Deferred Outflows \r\n \r\n16,381,633 \r\n \r\n13,002,004 \r\n \r\nLiabilities Current and Other Liabilities Long-Term Liabilities Net Pension Liability Net OPEB Liability \r\n \r\n10,152,519 28,573,756 64,942,071 50,449,983 \r\n \r\n9,172,033 30,908,568 65,692,138 56,608,834 \r\n \r\nTotal Liabilities \r\n \r\n154,118,329 \r\n \r\n162,381,573 \r\n \r\nDeferred Inflows of Resources Related Defined Benefits Pension Plans Related OPEB Plan \r\n \r\n4,788,444 11,442,776 \r\n \r\n3,592,143 5,511,083 \r\n \r\nTotal Deferred Inflows \r\n \r\n16,231,220 \r\n \r\n9,103,226 \r\n \r\nNet Position Net Investment in Capital Assets Restricted Unrestricted (Deficit) \r\n \r\n80,981,531 8,596,666 \r\n(101,752,533) \r\n \r\n77,940,543 8,426,304 \r\n(107,563,403) \r\n \r\nTotal Net Position \r\n \r\n$ (12,174,336) $ (21,196,556) \r\n \r\nv \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2019 \r\nTotal net position increased by approximately $9.0 million in fiscal year 2019 from the prior year. This change in net position is detailed in Table 2 below. Table 2 also shows the change in net position as compared to the prior fiscal year. \r\n \r\nTable 2 Change in Net Position \r\n \r\nRevenues Program Revenues: Charges for Services Operating Grants and Contributions Capital Grants and Contributions \r\nTotal Program Revenues \r\nGeneral Revenues: Property Taxes For Maintenance and Operations Other Taxes Sales Taxes Special Purpose Local Option Sales Tax- Other Taxes For Debt Service Other Sales Tax Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous \r\nTotal General Revenues \r\nTotal Revenues \r\nProgram Expenses Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Other Support Services Operations of Non-Instructional Services Enterprise Operations Food Services Interest on Short-Term and Long-Term Debt \r\nTotal Expenses \r\nIncrease in Net Position \r\n \r\nGovernmental Activities \r\n \r\nFiscal Year \r\n \r\nFiscal Year \r\n \r\n2019 \r\n \r\n2018 \r\n \r\n$ 2,436,513 $ 55,048,208 - \r\n \r\n2,108,405 52,905,464 \r\n266,172 \r\n \r\n57,484,721 \r\n \r\n55,280,041 \r\n \r\n15,825,873 62,970 \r\n \r\n15,131,983 57,428 \r\n \r\n5,383,841 245,694 \r\n6,414,331 508,913 \r\n1,240,633 \r\n29,682,255 \r\n87,166,976 \r\n \r\n4,956,567 187,275 \r\n5,881,018 215,949 \r\n1,103,893 \r\n27,534,113 \r\n82,814,154 \r\n \r\n51,132,968 \r\n \r\n51,661,989 \r\n \r\n1,961,747 1,269,422 1,025,710 \r\n835,540 3,966,521 \r\n664,743 6,869,485 2,665,243 \r\n185,746 60,787 \r\n \r\n1,968,677 1,195,106 1,014,728 \r\n966,502 4,168,928 1,127,549 6,325,474 2,943,596 \r\n208,824 68,009 \r\n \r\n2,276,859 4,599,524 \r\n630,461 \r\n \r\n2,060,268 4,400,030 \r\n377,306 \r\n \r\n78,144,756 \r\n \r\n78,486,986 \r\n \r\n$ 9,022,220 $ \r\n \r\n4,327,168 \r\nvi \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2019 \r\nCost of Providing Services \r\n \r\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. \r\nTable 3 Governmental Activities \r\n \r\nTotal Cost of Services \r\n \r\nFiscal \r\n \r\nFiscal \r\n \r\nYear 2019 Year 2018 \r\n \r\nNet Cost of Services \r\n \r\nFiscal \r\n \r\nFiscal \r\n \r\nYear 2019 Year 2018 \r\n \r\nInstruction \r\n \r\n$ 51,132,968 $ 51,661,989 \r\n \r\nSupport Services: \r\n \r\nPupil Services \r\n \r\n1,961,747 1,968,677 \r\n \r\nImprovement of Instructional Services \r\n \r\n1,269,422 1,195,106 \r\n \r\nEducational Media Services \r\n \r\n1,025,710 1,014,728 \r\n \r\nGeneral Administration \r\n \r\n835,540 \r\n \r\n966,502 \r\n \r\nSchool Administration \r\n \r\n3,966,521 4,168,928 \r\n \r\nBusiness Administration \r\n \r\n664,743 1,127,549 \r\n \r\nMaintenance and Operation of Plant \r\n \r\n6,869,485 6,325,474 \r\n \r\nStudent Transportation Services \r\n \r\n2,665,243 2,943,596 \r\n \r\nCentral Support Services \r\n \r\n185,746 \r\n \r\n208,824 \r\n \r\nOther Support Services \r\n \r\n60,786 \r\n \r\n68,009 \r\n \r\nOperations of Non-Instructional Services: \r\n \r\nEnterprise Operations \r\n \r\n2,276,859 2,060,268 \r\n \r\nFood Services \r\n \r\n4,599,524 4,400,030 \r\n \r\nInterest on Short-Term and Long-Term Debt \r\n \r\n630,461 \r\n \r\n377,306 \r\n \r\n$ 10,856,208 $ 12,968,038 \r\n \r\n1,034,953 626,861 (26,442) (524,894) \r\n1,773,452 655,593 \r\n4,424,096 1,681,572 \r\n183,178 60,133 \r\n \r\n1,055,754 577,080 (5,972) (394,155) \r\n2,085,862 1,118,681 3,887,914 1,806,434 \r\n206,644 59,195 \r\n \r\n(108,209) (606,927) 630,461 \r\n \r\n6,696 (542,532) 377,306 \r\n \r\nTotal Expenses \r\n \r\n$ 78,144,755 $ 78,486,986 $ 20,660,035 $ 23,206,945 \r\n \r\nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT'S FUNDS Information 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 and other financing sources of $90.6 million and total expenditures and other financial uses of $89.8 million in fiscal year 2019. Total governmental fund balances of approximately $34.9 million at June 30, 2019, increased approximately $0.8 million from the prior year. \r\nGeneral Fund Budget Highlights \r\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 2019, the School District amended its general fund budget as needed. \r\n \r\nvii \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2019 \r\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. \r\nFor the general fund, the final actual revenues of $81.4 million were greater than the final budgeted amount of $72.4 million by approximately $9.0 million. This can be primarily attributed to receiving more property taxes, state funds, federal funds, charges for services and miscellaneous income than originally expected. \r\nThe general fund's final actual expenditures of $76.9 million were less than the final budget amount of $79.6 million by approximately $2.7 million. The School District believes it effectively managed its budget during the fiscal year. \r\nCAPITAL ASSETS AND DEBT ADMINISTRATION \r\nCapital Assets \r\nAt fiscal year ended June 30, 2019, the School District had $96.0 million invested in capital assets, net of accumulated depreciation, all in governmental activities. These assets are made up of a broad range of items including buildings; land; land improvements; and food service, transportation and maintenance equipment. Table 4 reflects a summary of these balances, net of accumulated depreciation, as compared to the prior fiscal year. \r\nTable 4 Capital Assets (Net of Depreciation) \r\n \r\nGovernmental Activities \r\n \r\nFiscal \r\n \r\nFiscal \r\n \r\nYear 2019 \r\n \r\nYear 2018 \r\n \r\nLand \r\n \r\n$ \r\n \r\nConstruction in Progress \r\n \r\nBuildings and Improvements \r\n \r\nEquipment \r\n \r\nLand Improvements \r\n \r\n2,284,296 3,462,995 87,465,326 1,600,868 1,209,865 \r\n \r\n$ 2,284,296 431,066 \r\n88,441,008 751,735 \r\n1,267,137 \r\n \r\nTotal \r\n \r\n$ 96,023,350 $ 93,175,242 \r\n \r\nAdditional information about the School District's capital assets can be found in the Notes to the Basic Financial Statements. \r\n \r\nviii \r\n \r\n Debt Administration \r\n \r\nPOLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2019 \r\n \r\nAt June 30, 2019, the School District had $25.2 million in bonds outstanding with $2.5 million due within one year and $653 thousand in capital leases with $157 thousand due within one year. \r\nTable 5 Debt at June 30 \r\n \r\nGovernmental Activities \r\n \r\nFiscal \r\n \r\nFiscal \r\n \r\nYear 2019 \r\n \r\nYear 2018 \r\n \r\nBond Debt Capital Leases \r\n \r\n$ 25,200,000 $ 27,690,000 \r\n \r\n653,324 \r\n \r\n- \r\n \r\nTotal \r\n \r\n$ 25,853,324 $ 27,690,000 \r\n \r\nNet Pension and OPEB Liabilities \r\nAt June 30, 2019 the School District reported liabilities for its proportionate share of the net pension and OPEB liabilities. Reporting these liabilities were required by GASB No. 68, GASB No. 71 and GASB No. 75. \r\n \r\nFACTORS BEARING ON THE SCHOOL DISTRICT'S FUTURE \r\nCurrently known circumstances that are expected to have a significant effect on financial position or results of operations in future years are as follows: \r\n The School District is financially stable. The School District's operating millage for 2018 was 16.151. It was rolled back in 2019 to 16.080. \r\n The general fund had a fund balance as of June 30, 2019 of $19.0 million which is up $4.6 million from prior year. In fiscal year 2018, $3,720,659.89 was loaned from the general fund to the capital projects fund to complete the construction of the Polk County College and Career Academy. The inter-fund loan will be paid back in future years. The last payment will be made in fiscal year 2020 with excess Special Purpose Local Option Sales Tax (SPLOST) proceeds. The balance on the loan at June 30, 2019 was $1,342,419.99. \r\n The School District student population increased from 7663 in fiscal year 2018 to 7728 in fiscal year 2019. The School District will continue to renovate the existing facilities to accommodate any growth as needed. The School District plans to fund additional capital outlays with the one percent local sales tax revenue, general obligation bonds and state capital outlay grants. A fine arts building will be constructed at Cedartown High School. Technology upgrades will be made. Also, additions and modifications will be done as needed. \r\n In 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. \r\n \r\nix \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2019 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 Mrs. Tammy McDonald, Director of Finance, Polk County School District, 612 South College Street, Cedartown, Georgia 30125. You may also email your questions to Mrs. McDonald at tammy@polk.k12.ga.us. \r\nx \r\n \r\n POLK COUNTY SCHOOL DISTRICT \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT STATEMENT OF NET POSITION JUNE 30, 2019 \r\nASSETS \r\nCash and Cash Equivalents Investments Receivables, Net \r\nTaxes State Government Federal Government Other Inventories Restricted Assets Investments with Fiscal Agent or Trustee Capital Assets, Non-Depreciable Capital Assets, Depreciable (Net of Accumulated Depreciation) \r\nTotal Assets \r\nDEFERRED OUTFLOWS OF RESOURCES \r\nRelated to Defined Benefit Pension Plans Related to OPEB Plan \r\nTotal Deferred Outflows of Resources \r\nLIABILITIES \r\nAccounts Payable Salaries and Benefits Payable Interest Payable Contracts Payable Retainages Payable Deposits and Unearned Revenues Net Pension Liability Net OPEB Liability Long-Term Liabilities \r\nDue Within One Year Due in More Than One Year \r\nTotal Liabilities \r\nDEFERRED INFLOWS OF RESOURCES \r\nRelated to Defined Benefit Pension Plans Related to OPEB Plan \r\nTotal Deferred Inflows of Resources \r\nNET POSITION \r\nNet Investment in Capital Assets Restricted for \r\nContinuation of Federal Programs Debt Service Capital Projects Unrestricted (Deficit) \r\nTotal Net Position \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\nEXHIBIT \"A\" \r\n \r\nGOVERNMENTAL ACTIVITIES \r\n \r\n$ \r\n \r\n34,443,399.71 \r\n \r\n10,794.76 \r\n \r\n2,040,264.45 6,294,356.59 \r\n993,564.55 154,938.97 \r\n65,578.45 \r\n \r\n1,767,333.12 5,747,290.97 90,276,058.72 \r\n \r\n141,793,580.29 \r\n \r\n14,203,373.24 2,178,260.00 \r\n16,381,633.24 \r\n \r\n688,244.30 8,691,871.44 \r\n342,125.00 165,972.14 259,287.87 \r\n5,018.40 64,942,071.00 50,449,983.00 \r\n3,240,836.58 25,332,919.68 \r\n154,118,329.41 \r\n \r\n4,788,444.00 11,442,776.00 \r\n16,231,220.00 \r\n \r\n80,981,531.23 \r\n2,397,755.70 5,877,726.23 \r\n321,184.01 (101,752,533.05) \r\n \r\n$ \r\n \r\n(12,174,335.88) \r\n \r\n- 1 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT STATEMENT OF ACTIVITIES \r\nFOR THE YEAR ENDED JUNE 30, 2019 \r\n \r\nGOVERNMENTAL ACTIVITIES \r\nInstruction Support Services \r\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 \r\nTotal Governmental Activities \r\nGeneral Revenues Taxes Property Taxes For Maintenance and Operations Other Taxes 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 \r\nTotal General Revenues \r\nChange in Net Position \r\nNet Position - Beginning of Year \r\nNet Position - End of Year \r\n \r\nEXPENSES \r\n \r\nCHARGES FOR SERVICES \r\n \r\n$ 51,132,968.40 $ \r\n1,961,746.78 1,269,422.26 1,025,710.06 \r\n835,539.58 3,966,520.79 \r\n664,743.39 6,869,485.12 2,665,243.41 \r\n185,745.78 60,786.45 \r\n2,276,859.24 4,599,523.51 \r\n630,461.00 \r\n$ 78,144,755.77 $ \r\n \r\n7,031.90 \r\n- \r\n2,385,068.67 44,412.85 - \r\n2,436,513.42 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 2 - \r\n \r\n EXHIBIT \"B\" \r\n \r\nPROGRAM REVENUES OPERATING GRANTS AND \r\nCONTRIBUTIONS \r\n \r\nNET (EXPENSES) REVENUES \r\nAND CHANGES IN NET POSITION \r\n \r\n$ \r\n \r\n40,269,728.18 $ \r\n \r\n(10,856,208.32) \r\n \r\n926,794.08 642,561.41 1,052,152.23 1,360,433.09 2,193,069.24 \r\n9,150.37 2,445,389.55 \r\n983,670.98 2,567.36 653.52 \r\n \r\n(1,034,952.70) (626,860.85) 26,442.17 524,893.51 \r\n(1,773,451.55) (655,593.02) \r\n(4,424,095.57) (1,681,572.43) \r\n(183,178.42) (60,132.93) \r\n \r\n5,162,037.45 \r\n- \r\n \r\n108,209.43 606,926.79 (630,461.00) \r\n \r\n$ \r\n \r\n55,048,207.46 \r\n \r\n(20,660,034.89) \r\n \r\n15,825,872.93 62,969.95 \r\n5,383,841.48 245,694.49 \r\n6,414,331.00 508,912.59 \r\n1,240,632.99 \r\n29,682,255.43 \r\n9,022,220.54 \r\n(21,196,556.42) \r\n \r\n$ \r\n \r\n(12,174,335.88) \r\n \r\n- 3 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT BALANCE SHEET \r\nGOVERNMENTAL FUNDS JUNE 30, 2019 \r\n \r\nEXHIBIT \"C\" \r\n \r\nASSETS \r\nCash and Cash Equivalents Investments Receivables, Net \r\nTaxes State Government Federal Government Other Due from Other Funds Inventories Restricted Investments with a Fiscal Agent or Trustee \r\n \r\nGENERAL FUND \r\n \r\nCAPITAL PROJECTS \r\nFUND \r\n \r\nDEBT SERVICE \r\nFUND \r\n \r\nTOTAL \r\n \r\n$ 19,018,886.43 $ 10,794.76 \r\n1,585,850.26 6,294,356.59 \r\n993,564.55 154,938.97 1,342,419.99 \r\n65,578.45 \r\n- \r\n \r\n11,426,409.36 $ - \r\n- \r\n- \r\n \r\n3,998,103.92 $ - \r\n454,414.19 - \r\n1,767,333.12 \r\n \r\n34,443,399.71 10,794.76 \r\n2,040,264.45 6,294,356.59 \r\n993,564.55 154,938.97 1,342,419.99 \r\n65,578.45 \r\n1,767,333.12 \r\n \r\nTotal Assets \r\nLIABILITIES \r\nAccounts Payable Salaries and Benefits Payable Due to Other Funds Contracts Payable Retainages Payable Deposits and Unearned Revenue \r\nTotal Liabilities \r\nDEFERRED INFLOWS OF RESOURCES \r\nUnavailable Revenue - Property Taxes \r\nFUND BALANCES \r\nNonspendable Restricted Assigned Unassigned \r\nTotal Fund Balances \r\n \r\n$ 29,466,390.00 $ \r\n \r\n11,426,409.36 $ \r\n \r\n6,219,851.23 $ \r\n \r\n47,112,650.59 \r\n \r\n$ \r\n \r\n688,244.30 $ \r\n \r\n8,691,871.44 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n5,018.40 \r\n \r\n9,385,134.14 \r\n \r\n- $ 1,342,419.99 165,972.14 259,287.87 - \r\n1,767,680.00 \r\n \r\n- $ - \r\n- \r\n \r\n688,244.30 8,691,871.44 1,342,419.99 \r\n165,972.14 259,287.87 \r\n5,018.40 \r\n11,152,814.14 \r\n \r\n1,037,438.81 \r\n \r\n- \r\n \r\n- \r\n \r\n1,037,438.81 \r\n \r\n65,578.45 2,332,177.25 \r\n774,974.48 15,871,086.87 \r\n19,043,817.05 \r\n \r\n9,658,729.36 \r\n- \r\n9,658,729.36 \r\n \r\n6,219,851.23 \r\n- \r\n6,219,851.23 \r\n \r\n65,578.45 18,210,757.84 \r\n774,974.48 15,871,086.87 \r\n34,922,397.64 \r\n \r\nTotal Liabilities, Deferred Inflows of Resources, \r\n \r\nand Fund Balances \r\n \r\n$ 29,466,390.00 $ \r\n \r\n11,426,409.36 $ \r\n \r\n6,219,851.23 $ \r\n \r\n47,112,650.59 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 4 - \r\n \r\n POLK COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \r\nTO THE STATEMENT OF NET POSITION JUNE 30, 2019 \r\n \r\nEXHIBIT \"D\" \r\n \r\nTotal fund balances - governmental funds (Exhibit \"C\") \r\nAmounts reported for governmental activities in the Statement of Net Position are different because: \r\nCapital assets used in governmental activities are not financial resources and therefore are not reported in the funds. \r\nLand Construction in progress Buildings and improvements Equipment Land improvements Accumulated depreciation \r\nSome liabilities are not due and payable in the current period and, therefore, are not reported in the funds. \r\nNet pension liability Net OPEB liability \r\nDeferred outflows and inflows of resources related to pensions/OPEB are applicable to future periods and, therefore, are not reported in the funds. \r\nRelated to pensions Related to OPEB \r\nTaxes that are not available to pay for current period expenditures are deferred in the funds. \r\nLong-term liabilities, and related accrued interest, are not due and payable in the current period and therefore are not reported in the funds. \r\nBonds payable Accrued interest payable Capital leases payable Compensated absences payable Unamortized bond premiums \r\n \r\n$ \r\n \r\n34,922,397.64 \r\n \r\n$ \r\n \r\n2,284,296.10 \r\n \r\n3,462,994.87 \r\n \r\n116,337,306.35 \r\n \r\n5,751,972.82 \r\n \r\n2,594,719.05 \r\n \r\n(34,407,939.50) \r\n \r\n96,023,349.69 \r\n \r\n$ (64,942,071.00) (50,449,983.00) \r\n \r\n(115,392,054.00) \r\n \r\n$ \r\n \r\n9,414,929.24 \r\n \r\n(9,264,516.00) \r\n \r\n150,413.24 1,037,438.81 \r\n \r\n$ (25,200,000.00) (342,125.00) (653,324.41) (204,957.68) \r\n(2,515,474.17) \r\n \r\n(28,915,881.26) \r\n \r\nNet position of governmental activities (Exhibit \"A\") \r\n \r\n$ (12,174,335.88) \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 5 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES \r\nGOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2019 \r\n \r\nEXHIBIT \"E\" \r\n \r\nREVENUES \r\nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous \r\nTotal Revenues \r\nEXPENDITURES \r\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 \r\nCapital Outlay Debt Services \r\nPrincipal Dues and Fees Interest \r\nTotal Expenditures \r\nRevenues over (under) Expenditures \r\nOTHER FINANCING SOURCES (USES) \r\nCapital Leases Transfers In Transfers Out \r\nTotal Other Financing Sources (Uses) \r\nNet Change in Fund Balances \r\nFund Balances - Beginning \r\n \r\nGENERAL FUND \r\n \r\nCAPITAL PROJECTS \r\nFUND \r\n \r\nDEBT SERVICE \r\nFUND \r\n \r\nTOTAL \r\n \r\n$ \r\n \r\n16,045,839.56 $ \r\n \r\n245,694.49 \r\n \r\n51,502,716.54 \r\n \r\n10,034,424.56 \r\n \r\n2,436,513.42 \r\n \r\n15,309.58 \r\n \r\n1,140,632.99 \r\n \r\n81,421,131.14 \r\n \r\n- $ 325,804.34 100,000.00 \r\n425,804.34 \r\n \r\n- $ 5,383,841.48 \r\n167,798.67 - \r\n5,551,640.15 \r\n \r\n16,045,839.56 5,629,535.97 \r\n51,502,716.54 10,034,424.56 \r\n2,436,513.42 508,912.59 \r\n1,240,632.99 \r\n87,398,575.63 \r\n \r\n49,917,257.62 \r\n2,027,777.54 1,318,439.08 1,084,161.29 \r\n806,851.78 4,214,709.44 \r\n689,086.65 6,372,551.82 3,113,273.04 \r\n193,339.80 46,821.18 \r\n2,277,359.24 4,793,854.74 \r\n- \r\n- \r\n76,855,483.22 \r\n4,565,647.92 \r\n \r\n721,031.05 \r\n6,723.00 747,581.55 827,733.00 4,394,012.67 \r\n174,408.59 1,075.00 3,391.41 \r\n6,875,956.27 \r\n(6,450,151.93) \r\n \r\n- \r\n3,675.00 - \r\n2,490,000.00 - \r\n1,190,350.00 \r\n3,684,025.00 \r\n1,867,615.15 \r\n \r\n50,638,288.67 \r\n2,027,777.54 1,318,439.08 1,084,161.29 \r\n810,526.78 4,214,709.44 \r\n695,809.65 7,120,133.37 3,941,006.04 \r\n193,339.80 46,821.18 \r\n2,277,359.24 4,793,854.74 4,394,012.67 \r\n2,664,408.59 1,075.00 \r\n1,193,741.41 \r\n87,415,464.49 \r\n(16,888.86) \r\n \r\n- \r\n- \r\n4,565,647.92 \r\n14,478,169.13 \r\n \r\n827,733.00 2,378,239.90 \r\n- \r\n3,205,972.90 \r\n(3,244,179.03) \r\n12,902,908.39 \r\n \r\n(2,378,239.90) \r\n(2,378,239.90) \r\n(510,624.75) \r\n6,730,475.98 \r\n \r\n827,733.00 2,378,239.90 (2,378,239.90) \r\n827,733.00 \r\n810,844.14 \r\n34,111,553.50 \r\n \r\nFund Balances - Ending \r\n \r\n$ \r\n \r\n19,043,817.05 $ \r\n \r\n9,658,729.36 $ \r\n \r\n6,219,851.23 $ 34,922,397.64 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 6 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF \r\nREVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2019 \r\n \r\nEXHIBIT \"F\" \r\n \r\nNet change in fund balances total governmental funds (Exhibit \"E\") \r\nAmounts reported for governmental activities in the Statement of Activities are different because: \r\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. \r\nCapital outlay Depreciation expense \r\nTaxes reported in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. \r\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. \r\nCapital leases issued Amortization of bonds premium Bond principal retirements Capital lease payments \r\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. \r\nPension expense OPEB expense \r\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. \r\nAccrued interest on issuance of bonds Compensated absences \r\n \r\n$ \r\n \r\n810,844.14 \r\n \r\n$ \r\n \r\n5,408,452.29 \r\n \r\n(2,560,344.55) \r\n \r\n2,848,107.74 (156,996.68) \r\n \r\n$ \r\n \r\n(827,733.00) \r\n \r\n538,380.41 \r\n \r\n2,490,000.00 \r\n \r\n174,408.59 \r\n \r\n2,375,056.00 \r\n \r\n$ \r\n \r\n2,829,004.18 \r\n \r\n331,549.00 \r\n \r\n3,160,553.18 \r\n \r\n$ \r\n \r\n24,900.00 \r\n \r\n(40,243.84) \r\n \r\n(15,343.84) \r\n \r\nChange in net position of governmental activities (Exhibit \"B\") \r\n \r\n$ \r\n \r\n9,022,220.54 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 7 - \r\n \r\n ASSETS Cash and Cash Equivalents Investments \r\nTotal Assets \r\nLIABILITIES Due to Broker Funds Held for Others \r\nNET POSITION Employee's Pension Benefits Held in Trust for Private Purposes \r\n \r\nPOLK COUNTY SCHOOL DISTRICT STATEMENT OF FIDUCIARY NET POSITION \r\nFIDUCIARY FUNDS JUNE 30, 2019 \r\n \r\nEXHIBIT \"G\" \r\n \r\nPRIVATE PURPOSE TRUSTS \r\n \r\nAGENCY FUNDS \r\n \r\nPENSION TRUST FUND \r\nDecember 31, 2018 \r\n \r\n$ \r\n \r\n9,726.72 $ \r\n \r\n112,994.69 $ \r\n \r\n31,081.00 \r\n \r\n- \r\n \r\n- \r\n \r\n3,823,802.00 \r\n \r\n$ \r\n \r\n9,726.72 $ \r\n \r\n112,994.69 $ \r\n \r\n3,854,883.00 \r\n \r\n$ \r\n \r\n- $ \r\n \r\n112,994.69 \r\n \r\n2,447.00 - \r\n \r\n- \r\n \r\n$ \r\n \r\n9,726.72 \r\n \r\n$ \r\n \r\n3,852,436.00 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 8 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT STATEMENT OF CHANGES IN FIDUCIARY NET POSITION \r\nFIDUCIARY FUNDS YEAR ENDED JUNE 30, 2019 \r\n \r\nEXHIBIT \"H\" \r\n \r\nADDITIONS Contributions Employer Contributions Investment Earnings Net (Decrease) in Fair Value of Investments Total Additions \r\nDEDUCTIONS Administrative Expenses Benefits Paid to Participants Other Deductions Total Deductions Change in Net Position \r\nNet Position - Beginning \r\nNet Position - Ending \r\n \r\nPRIVATE PURPOSE TRUSTS \r\n \r\nPENSION TRUST FUND \r\nDecember 31, 2018 \r\n \r\n$ \r\n \r\n- $ \r\n \r\n332,646.00 \r\n \r\n- \r\n \r\n(271,717.00) \r\n \r\n- \r\n \r\n60,929.00 \r\n \r\n73.00 \r\n73.00 \r\n(73.00) \r\n9,799.72 \r\n \r\n21,147.00 333,310.00 \r\n- \r\n354,457.00 \r\n(293,528.00) \r\n4,145,964.00 \r\n \r\n$ \r\n \r\n9,726.72 $ \r\n \r\n3,852,436.00 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 9 - \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY \r\nREPORTING ENTITY \r\nThe Polk County School District (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. \r\nNOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES \r\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. \r\nBASIS OF PRESENTATION \r\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. \r\nGOVERNMENT-WIDE STATEMENTS: \r\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. \r\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: \r\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. \r\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. \r\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. \r\nThe Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities. \r\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. \r\n \r\n- 11 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\nFUND FINANCIAL STATEMENTS \r\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. \r\nThe School District reports the following major governmental funds: \r\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. \r\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. \r\n The debt service fund accounts for and reports financial resources that are restricted, committed, or assigned including taxes (property and sales) legally restricted for the payment of general long-term principal and interest. \r\nThe School District reports the following fiduciary fund types: \r\n Private purpose trust funds are used to report all trust arrangements, other than those properly reported elsewhere, in which principal and income benefit individuals, private organizations or other governments. \r\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. \r\n Pension trust fund accounts for the activities of Polk County School District Social Security Replacement Plan, a single employer defined benefit pension plan for the group of employees covered by the Public School Employees Retirement Systems (PSERS). \r\nBASIS OF ACCOUNTING \r\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. \r\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. \r\n \r\n- 12 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"I\" \r\n \r\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 and compensated absences, 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. \r\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 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. \r\nNEW ACCOUNTING PRONOUNCEMENTS \r\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 does not have an impact on the School District's financial statement. \r\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. \r\nFISCAL YEAR END \r\nAll funds are reported using fiscal years which end on June 30, except defined benefit pension plan (fiduciary fund), which has a fiscal year ending December 31. \r\nCASH AND CASH EQUIVALENTS \r\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. \r\nINVESTMENTS \r\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. \r\n \r\n- 13 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\nFor accounting purposes, certificates of deposit are classified as investments if they have an original maturity greater than three months when acquired. \r\nRECEIVABLES \r\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. \r\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. \r\nINVENTORIES \r\nFood Inventories \r\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. \r\nRESTRICTED ASSETS \r\nCertain resources set aside for repayment of debt are classified as restricted assets on the Statement of Net Position because their use is limited by applicable debt statutes, e.g. Qualified Zone Academy Bond sinking funds. \r\nCAPITAL ASSETS \r\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. \r\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. \r\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. \r\n \r\n- 14 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"I\" \r\n \r\nCapitalization thresholds and estimated useful lives of capital assets reported in the government-wide statements are as follows: \r\n \r\nCapitalization Policy \r\n \r\nEstimated Useful Life \r\n \r\nLand \r\n \r\nLand Improvements \r\n \r\n$ \r\n \r\nBuildings and Improvements $ \r\n \r\nEquipment \r\n \r\n$ \r\n \r\nIntangible Assets \r\n \r\n$ \r\n \r\nAll 50,000.00 50,000.00 50,000.00 50,000.00 \r\n \r\nN/A 20 to 60 years 25 to 60 years \r\n5 to 50 years 10 to 20 years \r\n \r\nDEFERRED OUTFLOWS/INFLOWS OF RESOURCES \r\n \r\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. \r\n \r\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. \r\nCOMPENSATED ABSENCES \r\n \r\nCompensated absences payable consists of vacation leave employees earned based on services already rendered. \r\n \r\nVacation leave of 10 days is awarded annually to all full time personnel employed on a twelve month basis with less than 15 years of experience and 15 days annually to all full time personnel employed on a twelve month basis with between 15 and 40 years of experience. Twelve month employees with 40 or more years of services to the School District are eligible for 5 additional vacation days annually. No other employees are eligible to earn vacation leave. \r\n \r\nFor twelve-month employees with 15 or more years of experience, all unused vacation days may be carried forward into the next employment year up to and including June 30. This is a maximum of 15 days earned from previous year. Upon expiration of this limit, a maximum of 5 unused vacation days may be carried forward. Therefore, this employee could have a maximum of 20 days of acquired vacation at the start of a new fiscal year. \r\n \r\nFor twelve-month employees with less than 15 years of experience, all unused vacation days may be carried forward into the next employment year up to and including June 30. This is a maximum of 10 days earned from previous year. Upon expiration of this limit, a maximum of 5 unused vacation days may be carried forward. Therefore, this employee could have a maximum of 15 days of acquired vacation at the start of a new fiscal year. \r\n \r\nUpon terminating employment, the School District pays all unused and unforfeited vacation benefits to employees. Accordingly, vacation benefits are accrued as a liability in the government-wide financial statements. A liability for these amounts is reported in the governmental fund financial statements only if they have matured, for example, as a result of employee resignations and retirements by fiscalyear end. \r\n \r\nMembers of the Teachers Retirement System of Georgia (TRS) may apply unused sick leave toward early retirement. The liability for early retirement will be borne by TRS rather than by the individual School Districts. Otherwise, sick leave does not vest with the employee, and no liability is reported in the School District's financial statements. \r\n \r\n- 15 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"I\" \r\n \r\nLONG-TERM LIABILITIES AND BOND DISCOUNTS/PREMIUMS \r\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. \r\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. \r\nPENSIONS \r\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. \r\nPOSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS (OPEB) \r\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. \r\nFUND BALANCES \r\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. \r\nThe School District's fund balances are classified as follows: \r\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. \r\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. \r\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. \r\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. \r\n \r\n- 16 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\nUSE OF ESTIMATES \r\n \r\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. \r\nPROPERTY TAXES \r\n \r\nThe Polk County Board of Commissioners adopted the property tax levy for the 2018 tax digest year (calendar year) on September 6, 2018 (levy date) based on property values as of January 1, 2018. Taxes were due on December 1, 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 Polk 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 $14,596,725.55. \r\n \r\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): \r\n \r\nSchool Operations \r\n \r\n16.08 mills \r\n \r\nAdditionally, Title Ad Valorem Tax revenues, at the fund reporting level, amounted to $1,386,144.06 during fiscal year ended June 30, 2019. \r\nSALES TAXES \r\nEducation Special Purpose Local Option Sales Tax (ESPLOST), at the fund reporting level, during the year amounted to $5,383,841.48 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. \r\nNOTE 3: BUDGETARY DATA \r\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. \r\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. \r\n \r\n- 17 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\nNOTE 4: DEPOSITS, CASH EQUIVALENTS AND INVESTMENTS \r\nCOLLATERALIZATION OF DEPOSITS \r\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. \r\nAcceptable security for deposits consists of any one of or any combination of the following: \r\n(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, \r\n(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, \r\n(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia, \r\n(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, \r\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, \r\n(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and \r\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. \r\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 warrants. The program lists the types of eligible collateral. The OST approves authorized custodians. \r\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. \r\n \r\n- 18 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"I\" \r\n \r\nCATEGORIZATION OF DEPOSITS \r\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, School District had deposits with a carrying amount of $19,111,911.13 and a bank balance of $21,755,906.98. The bank balances insured by Federal depository insurance were $968,794.05. The bank balances included in the State's Secure Deposit Program (SDP) were $20,787,112.93. \r\nReconciliation of cash and cash equivalents balances to carrying value of deposits: \r\n \r\nCash and cash equivalents Statement of Net Position Statement of Fiduciary Net Position \r\n \r\n$ 34,443,399.71 153,802.41 \r\n \r\nTotal cash and cash equivalents \r\n \r\n34,597,202.12 \r\n \r\nAdd: Deposits with original maturity of three months or more reported as investments \r\n \r\n10,794.76 \r\n \r\nLess: Investment pools reported as cash and cash equivalents \r\nGeorgia Fund 1 \r\n \r\n15,496,085.75 \r\n \r\nTotal carrying value of deposits - June 30, 2019 \r\n \r\n$ 19,111,911.13 \r\n \r\nCATEGORIZATION OF CASH EQUIVALENTS \r\nThe School District reported cash equivalents of $15,496,085.75 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, $1.00 per share, which approximates fair value. The pool is an AAAf rated investment pool by Standard and Poor's. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2019, was 39 days. \r\nGeorgia Fund 1, administered by the State of Georgia, Office of the State Treasurer, is not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office of the State Treasurer for the Georgia Fund 1, does not provide for investment in derivatives or similar investments. Additional information on the Georgia Fund 1 is disclosed in the State of Georgia Comprehensive Annual Financial Report. This audit can be obtained from the Georgia Department of Audits and Accounts at www.audits.ga.gov/SGD/CAFR.html. \r\n \r\n- 19 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"I\" \r\n \r\nCATEGORIZATION OF INVESTMENTS \r\n \r\nAt June 30, 2019, the School District had the following investments: \r\n \r\nInvestment Type \r\n \r\nFair Value \r\n \r\nInvestment Maturity Less Than 1 Year \r\n \r\nDebt Securities U. S. Agencies Implicitly Guaranteed \r\n \r\n$ 1,767,333.12 $ \r\n \r\n1,767,333.12 \r\n \r\nOther Investments Mutual Bond Funds Mutual Equity Funds Mutual Money Market Funds \r\n \r\n1,698,659.00 1,992,245.00 \r\n132,898.00 \r\n \r\nTotal Investments \r\n \r\n$ 5,591,135.12 \r\n \r\nFair Value of Investments \r\nThe School District measures and records its investments using fair value measurement guidelines established by generally accepted accounting principles. These guidelines recognize a three-tiered fair value hierarchy, as follows: \r\nLevel 1: Quoted prices for identical investments in active markets; Level 2: Observable inputs other than quoted market prices; and, Level 3: Unobservable inputs. \r\n \r\nAt June 30, the School District had the following investments by fair value level: \r\n \r\nInvestments by fair value level: \r\n \r\nFair Value \r\n \r\nLevel 1 \r\n \r\nLevel 2 \r\n \r\nU. S. Agencies Implicitly Guaranteed \r\nMutual Bond Funds Mutual Equity Funds - Domestic Mutual Equity Funds - International Mutual Money Market Funds \r\n \r\n$ 1,767,333.12 $ \r\n \r\n- $ 1,767,333.12 \r\n \r\n1,698,659.00 \r\n \r\n1,698,659.00 \r\n \r\n- \r\n \r\n1,811,480.00 \r\n \r\n1,811,480.00 \r\n \r\n- \r\n \r\n180,765.00 \r\n \r\n180,765.00 \r\n \r\n- \r\n \r\n132,898.00 \r\n \r\n132,898.00 \r\n \r\n- \r\n \r\nTotal investments by fair value level $ 5,591,135.12 $ 3,823,802.00 $ 1,767,333.12 \r\nInterest Rate Risk \r\nInterest rate risk is the risk that changes in interest rates of debt investment will adversely affect the fair value of an investment. The School District does not have a formal policy for managing interest rate risk. Custodial Credit Risk \r\nCustodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, the School District will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The School District does not have a formal policy for managing custodial credit risk. \r\nAt June 30, 2019, $3,690,904.00 of the School District's applicable investments were held by the investment's counterparty, not in the School District's name. \r\n- 20 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"I\" \r\n \r\nCredit Quality Risk \r\n \r\nCredit quality risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. State law limits investments to those prescribed O.C.G.A. 36-83-4. The School District does not have a formal policy that would further limit its investment choices or one that addresses credit risk. \r\n \r\nThe investments subject to credit quality risk are reflected below: \r\n \r\nRated Debt Investments \r\n \r\nFair Value \r\n \r\nQuality Ratings \r\n \r\nAAA \r\n \r\nUnrated \r\n \r\nDebt Securities U. S. Agencies Implicitly Guaranteed Mutual Bond Funds Mutual Money Market Funds \r\n \r\n$ 1,767,333.12 $ 1,767,333.12 $ \r\n \r\n- \r\n \r\n1,698,659.00 \r\n \r\n- \r\n \r\n1,698,659.00 \r\n \r\n132,898.00 \r\n \r\n- \r\n \r\n132,898.00 \r\n \r\nTotals by Quality Ratings \r\n \r\n$ 3,598,890.12 $ 1,767,333.12 $ 1,831,557.00 \r\n \r\nConcentration of Credit Risk \r\nConcentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The School District does not have a formal policy for managing concentration of credit risk. More than 5% of the School District's investments are in Mutual Equity Funds, Mutual Bond Funds, Federal National Mortgage Association (FNMA) Discount Note and Mutual Money Market Funds. These investments are 36%, 30%, 32% and 2% of the School District's total investments, respectively. \r\nNOTE 5: RESTRICTED ASSETS \r\n \r\nThe restricted assets represent the investment balance, totaling $1,767,333.12, respectively, for the QZAB Bond Sinking Fund. \r\n \r\n- 21 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 6: CAPITAL ASSETS \r\n \r\nThe following is a summary of changes in the capital assets for governmental activities during the fiscal year: \r\n \r\nBalances July 1, 2018 \r\n \r\nIncreases \r\n \r\nDecreases \r\n \r\nBalances June 30, 2019 \r\n \r\nGovernmental Activities Capital Assets, Not Being Depreciated: \r\nLand Construction in Progress \r\n \r\n$ 2,284,296.10 $ \r\n \r\n- $ \r\n \r\n- $ 2,284,296.10 \r\n \r\n431,066.22 4,328,692.29 1,296,763.64 \r\n \r\n3,462,994.87 \r\n \r\nTotal Capital Assets Not Being Depreciated \r\n \r\n2,715,362.32 4,328,692.29 1,296,763.64 \r\n \r\n5,747,290.97 \r\n \r\nCapital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements \r\nLess Accumulated Depreciation for: Buildings and Improvements Equipment Land Improvements \r\n \r\n115,040,542.71 4,965,534.70 2,594,719.05 \r\n \r\n1,296,763.64 1,079,760.00 \r\n- \r\n \r\n293,321.88 \r\n- \r\n \r\n116,337,306.35 5,751,972.82 2,594,719.05 \r\n \r\n26,599,534.42 4,213,799.85 1,327,582.56 \r\n \r\n2,272,445.83 230,626.90 57,271.82 \r\n \r\n293,321.88 \r\n- \r\n \r\n28,871,980.25 4,151,104.87 1,384,854.38 \r\n \r\nTotal Capital Assets, Being Depreciated, Net \r\n \r\n90,459,879.63 \r\n \r\n(183,820.91) \r\n \r\n- \r\n \r\n90,276,058.72 \r\n \r\nGovernmental Activities Capital Assets - Net $ 93,175,241.95 $ 4,144,871.38 $ 1,296,763.64 $ 96,023,349.69 \r\n \r\nCurrent year depreciation expense by function is as follows: \r\n \r\nInstruction Support Services \r\nStudent Transportation Services Central Support Services Food Services \r\n \r\n$ 210,789.00 17,280.00 \r\n \r\n$ 2,305,520.22 \r\n228,069.00 26,755.33 \r\n \r\n$ 2,560,344.55 \r\n \r\nNOTE 7: INTERFUND ASSETS, LIABILITIES, AND TRANSFERS INTERFUND ASSETS AND LIABILITIES \r\n \r\nDue to and due from other funds are recorded for interfund receivables and payables which arise from interfund transactions. Interfund balances at June 30, 2019, consisted of the following: \r\n \r\nDue From Other Funds \r\n \r\nDue To Other Funds \r\n \r\nGeneral Fund Capital Projects Fund \r\n \r\n$ 1,342,419.99 - \r\n$ 1,342,419.99 \r\n \r\n$ \r\n \r\n- \r\n \r\n1,342,419.99 \r\n \r\n$ 1,342,419.99 \r\n \r\nInterfund assets and liabilities are a result of the general fund loaning funds to the capital projects fund to provide cash to complete construction projects. \r\n- 22 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nINTERFUND TRANSFERS \r\n \r\nInterfund transfers for the year ended June 30, 2019, consisted of the following: \r\n \r\nTransfers to \r\n \r\nTransfers From Debt Service \r\nFund \r\n \r\nEXHIBIT \"I\" \r\n \r\nCapital Projects Fund $ 2,378,239.90 \r\nTransfers are used to move Special Purpose Local Option Sales Tax (SPLOST) revenues collected by the debt service fund to the capital projects fund for the payment of cost associated with construction projects approved by the Special Purpose Local Option Sales Tax (SPLOST) referendum. NOTE 8: LONG-TERM LIABILITIES \r\nThe changes in long-term liabilities during the fiscal year for governmental activities were as follows: \r\n \r\nBalance July 1, 2018 \r\n \r\nAdditions \r\n \r\nGovernmental Activities \r\n \r\nBalance \r\n \r\nDeductions \r\n \r\nJune 30, 2019 \r\n \r\nDue Within One Year \r\n \r\nGeneral Obligation (G.O.) Bonds Qualified Zone Academy Bonds \r\n \r\n$ 25,690,000.00 $ 2,000,000.00 \r\n \r\n- $ 2,490,000.00 $ 23,200,000.00 $ 2,545,000.00 \r\n \r\n- \r\n \r\n- \r\n \r\n2,000,000.00 \r\n \r\n- \r\n \r\nTotal Bond Debt \r\n \r\n27,690,000.00 \r\n \r\n- \r\n \r\n2,490,000.00 25,200,000.00 2,545,000.00 \r\n \r\nCapital Leases Compensated Absences(1) Unamortized Bond Premiums \r\n \r\n164,713.84 3,053,854.58 \r\n \r\n827,733.00 60,722.92 - \r\n \r\n174,408.59 20,479.08 \r\n538,380.41 \r\n \r\n653,324.41 204,957.68 2,515,474.17 \r\n \r\n157,456.17 - \r\n538,380.41 \r\n \r\n$ 30,908,568.42 $ 888,455.92 $ 3,223,268.08 $ 28,573,756.26 $ 3,240,836.58 \r\n \r\n(1) The portion of compensated absences due within one year has been determined to be immaterial to the basic financial statements. \r\nGENERAL OBLIGATION DEBT OUTSTANDING \r\n \r\nThe School District's bonded debt consists of various issues 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 property taxes. General obligation bonds are direct obligations and pledge the full faith and credit of the School District. \r\n \r\nThe School District's outstanding general obligations bonds related to governmental activities of $23,200,000.00 contain a provision that in the event of a nonpayment, the State Board is authorized to and must withhold from any state appropriations to which the School District may be entitled and apply so much thereof as shall be necessary to the payment of the principal of and interest on such indebtedness then due. \r\n \r\nGeneral obligation bonds currently outstanding are as follows: \r\n \r\nDescription \r\n \r\nInterest Rates \r\n \r\nIssue Date \r\n \r\nMaturity Date \r\n \r\nAmount Issued \r\n \r\nAmount Outstanding \r\n \r\nGeneral Government - Series 2014 General Government - Series 2018 \r\n \r\n2.00% - 5.00% 4.00% - 5.00% \r\n \r\n7/22/2014 3/1/2018 \r\n \r\n4/1/2021 $ 12,500,000.00 $ \r\n \r\n3/1/2026 \r\n \r\n18,050,000.00 \r\n \r\n5,150,000.00 18,050,000.00 \r\n \r\n$ 30,550,000.00 $ 23,200,000.00 \r\n \r\n- 23 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"I\" \r\n \r\nThe following schedule details debt service requirements to maturity for the School District's total general obligation bonds payable: \r\n \r\nFiscal Year Ended June 30: \r\n \r\nGeneral Obligation Debt \r\n \r\nPrincipal \r\n \r\nInterest \r\n \r\nUnamortized Bond Premium \r\n \r\n2020 2021 2022 2023 2024 2025 - 2026 \r\n \r\n$ 2,545,000.00 $ 1,090,750.00 \r\n \r\n2,605,000.00 \r\n \r\n963,500.00 \r\n \r\n3,425,000.00 \r\n \r\n833,250.00 \r\n \r\n3,500,000.00 \r\n \r\n696,250.00 \r\n \r\n3,600,000.00 \r\n \r\n556,250.00 \r\n \r\n7,525,000.00 \r\n \r\n567,500.00 \r\n \r\n$ 538,380.41 538,380.41 308,295.72 308,295.72 308,295.72 513,826.19 \r\n \r\nTotal Principal and Interest $ 23,200,000.00 $ 4,707,500.00 $ 2,515,474.17 \r\n \r\nQUALIFIED ZONE ACADEMY BONDS (QZAB) \r\n \r\nSection 226 of the Taxpayer Relief Act of 1997 (Public Law 105-34) provides for a source of capital at no or at nominal interest rates for costs incurred by School Districts in connection with the establishment of special academic programs, in partnership with the business community. The School District, in agreement with Regions Bank, has entered into such an arrangement. \r\n \r\nThis agreement establishes a method of repayment for the qualified interest-free debt instrument. The agreement requires the School District to deposit funds annually into a sinking fund account on or before June 30, 2019. The amount on deposit at June 30, 2019 was $1,767,333.12. \r\n \r\nIn the event the amount of funds lawfully available is not sufficient to pay the QZAB payments when due in any year, the School District shall levy an ad valorem tax on all taxable property located within the boundaries of the School District subject to taxation for such purposes, at such rate or rates (subject to the 20 Mills Limitation) as may be necessary to produce in each calendar year revenues which shall be sufficient to fulfill the School District's obligations. \r\n \r\nDebt currently outstanding under Qualified Zone Academy Bonds is as follows: \r\n \r\nDescription \r\n \r\nInterest Rate \r\n \r\nIssue Date \r\n \r\nMaturity Date \r\n \r\nAmount Issued \r\n \r\nAmount Outstanding \r\n \r\nGeneral Government - QZAB - Series 2006 \r\n \r\n0.00% 12/5/2006 12/15/2022 $ 2,000,000.00 $ 2,000,000.00 \r\n \r\nThe following schedule reports the annual Qualified Zone Academy Bond payments: \r\n \r\nFiscal Year Ended June 30: \r\n \r\nPrincipal \r\n \r\n2023 \r\n \r\n$ 2,000,000.00 \r\n \r\nCAPITAL LEASES \r\nDuring the current fiscal year, the School District entered into a lease agreement as lessee for financing the acquisition of school buses at a cost of $827,733.00. 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. \r\n \r\n- 24 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"I\" \r\n \r\nCapital leases currently outstanding are as follows: \r\n \r\nPurpose \r\n \r\nInterest Rate \r\n \r\nIssue Date \r\n \r\nMaturity Date \r\n \r\nAmount Issued \r\n \r\nAmount Outstanding \r\n \r\nSchool buses \r\n \r\n3.74% 10/26/2018 10/5/2022 $ 827,733.00 $ 653,324.41 \r\n \r\nThe following is a schedule of total capital lease payments: \r\n \r\nFiscal Year Ended June 30: \r\n \r\nPrincipal \r\n \r\nInterest \r\n \r\n2020 2021 2022 2023 \r\n \r\n$ 157,456.19 $ 20,343.81 \r\n \r\n159,260.89 \r\n \r\n18,539.81 \r\n \r\n165,215.20 \r\n \r\n12,584.80 \r\n \r\n171,392.13 \r\n \r\n6,407.87 \r\n \r\nTotal Principal and Interest $ 653,324.41 $ 57,876.29 \r\n \r\nCOMPENSATED ABSENCES \r\n \r\nCompensated absences represent obligations of the School District relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. Typically, the general fund is the fund used to liquidate this long-term debt. The School District uses the vesting method to compute compensated absences. \r\nNOTE 9: RISK MANAGEMENT \r\nINSURANCE \r\nCommercial Insurance \r\n \r\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. \r\nUNEMPLOYMENT COMPENSATION \r\n \r\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. \r\n \r\nChanges in the unemployment compensation claims liability during the last two fiscal years are as follows: \r\n \r\nBeginning of Year Liability \r\n \r\nClaims and Changes in Estimates \r\n \r\nClaims Paid \r\n \r\nEnd of Year Liability \r\n \r\n2018 $ \r\n \r\n- \r\n \r\n$ \r\n \r\n5,802.00 \r\n \r\n$ \r\n \r\n5,802.00 $ \r\n \r\n- \r\n \r\n2019 $ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n- 25 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"I\" \r\n \r\nSURETY BOND \r\n \r\nThe School District purchased a surety bond to provide additional insurance coverage as follows: \r\n \r\nPosition Covered \r\n \r\nAmount \r\n \r\nSuperintendent $ 50,000.00 \r\n \r\nNOTE 10: FUND BALANCE CLASSIFICATION DETAILS \r\n \r\nThe School District's financial statements include the following amounts presented in the aggregate at June 30, 2019: \r\n \r\nNonspendable Inventories \r\nRestricted Continuation of Federal Programs Capital Projects Debt Service \r\nAssigned School Activity Accounts \r\nUnassigned \r\n \r\n$ \r\n \r\n65,578.45 \r\n \r\n$ 2,332,177.25 9,658,729.36 6,219,851.23 \r\n \r\n18,210,757.84 \r\n \r\n774,974.48 15,871,086.87 \r\n \r\nFund Balance, June 30, 2019 \r\n \r\n$ 34,922,397.64 \r\n \r\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. \r\nNOTE 11: SIGNIFICANT COMMITMENTS \r\nCOMMITMENTS UNDER CONSTRUCTION CONTRACTS \r\n \r\nThe following is an analysis of significant outstanding construction or renovation contracts executed by the School District as of June 30, 2019. \r\n \r\nProject \r\n \r\nUnearned Executed Contracts (1) \r\n \r\nPayments through \r\nJune 30, 2019 (2) \r\n \r\nCedartown High School Fine Arts Center $ Rockmart High School Pressbox \r\n \r\n4,230,052.50 $ 3,280,166.84 \r\n \r\n261,718.97 \r\n \r\n182,828.03 \r\n \r\n$ 4,491,771.47 $ 3,462,994.87 \r\n \r\n(1) The amounts described are not reflected in the basic financial statements. (2) Payments include contracts and retainages payable at year end. \r\n \r\n- 26 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 12: SIGNIFICANT CONTINGENT LIABILITES \r\nFEDERAL GRANTS \r\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. \r\nLITIGATION \r\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. \r\nNOTE 13: OTHER POST-EMPLOYMENT BENEFITS (OPEB) \r\nGEORGIA SCHOOL PERSONNEL POST-EMPLOYMENT HEALTH BENEFIT FUND \r\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. \r\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. \r\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 $2,110,001.00 for the year ended June 30, 2019. Active employees are not required to contribute to the School OPEB Fund. \r\nOPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB \r\nAt June 30, 2019, the School District reported a liability of $50,449,983.00 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 0.396941%, which was a decrease of 0.005970% from its proportion measured as of June 30, 2017. \r\n \r\n- 27 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"I\" \r\n \r\nFor the year ended June 30, 2019, the School District recognized OPEB expense of $1,778,452.00. At June 30, 2019, the School District reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: \r\n \r\nDeferred Outflows of Resources \r\n \r\nOPEB \r\n \r\nDeferred Inflows of Resources \r\n \r\nDifferences between expected and actual \r\n \r\nexperience \r\n \r\n$ \r\n \r\n- $ 1,147,538.00 \r\n \r\nChanges of assumptions \r\n \r\n- \r\n \r\n8,546,470.00 \r\n \r\nNet difference between projected and actual \r\n \r\nearnings on OPEB plan investments \r\n \r\n68,259.00 \r\n \r\n- \r\n \r\nChanges in proportion and differences between School District contributions and proportionate share of contributions \r\n \r\n- \r\n \r\n1,748,768.00 \r\n \r\nSchool District contributions subsequent to \r\n \r\nthe measurement date \r\n \r\n2,110,001.00 \r\n \r\n- \r\n \r\nTotal \r\n \r\n$ 2,178,260.00 $ 11,442,776.00 \r\n \r\nSchool District contributions subsequent to the measurement date of $2,110,001.00 are reported as deferred outflows of resources and will be recognized as a reduction of the net OPEB liability in the year ended June 30, 2020. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: \r\n \r\nYear ended June 30: \r\n \r\nOPEB \r\n \r\n2019 2020 2021 2022 2023 2024 \r\n \r\n$ (2,222,984.00) $ (2,222,984.00) $ (2,222,984.00) $ (2,227,062.00) $ (1,809,993.00) $ (668,510.00) \r\n \r\n- 28 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"I\" \r\n \r\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: \r\n \r\nOPEB: \r\n \r\nInflation \r\n \r\n2.75% \r\n \r\nSalary increases \r\n \r\n3.25% - 9.00%, including inflation \r\n \r\nLong-term expected rate of return \r\nHealthcare cost trend rate \r\n \r\n7.30%, compounded annually, net of investment expense, and including inflation \r\n \r\nPre-Medicare Eligible \r\n \r\n7.50% \r\n \r\nMedicare Eligible \r\n \r\n5.50% \r\n \r\nUltimate trend rate \r\n \r\nPre-Medicare Eligible Medicare Eligible \r\n \r\n4.75% 4.75% \r\n \r\nYear of Ultimate trend rate \r\n \r\nPre-Medicare Eligible \r\n \r\n2028 \r\n \r\nMedicare Eligible \r\n \r\n2022 \r\n \r\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: \r\n \r\n For TRS members: The RP-2000 White Collar Mortality Table projected to 2025 with projection \r\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. \r\n For PSERS members: The RP-2000 Blue-Collar Mortality Table projected to 2025 with \r\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. \r\n \r\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. \r\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. \r\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. \r\n \r\n- 29 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"I\" \r\n \r\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 \r\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 \r\nweighting the expected future real rates of return by the target asset allocation percentage and by \r\nadding expected inflation. During fiscal year 2018, the School OPEB fund updated their investment \r\nstrategy to a more long-term approach. The target allocation and best estimates of arithmetic real \r\nrates of return for each major asset class are summarized in the following table: \r\n \r\nAsset class \r\n \r\nTarget allocation \r\n \r\nLong-Term Expected Real Rate of Return* \r\n \r\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 \r\n \r\n30.00% 37.20% \r\n3.40% 1.40% 17.80% 5.20% 5.00% \r\n \r\n(0.50)% 9.00% \r\n12.00% 13.50% \r\n8.00% 12.00% 10.50% \r\n \r\nTotal \r\n \r\n100.00% \r\n \r\n*Net of Inflation \r\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. \r\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: \r\n \r\n1% Decrease (2.87%) \r\n \r\nCurrent Discount Rate (3.87%) \r\n \r\n1% Increase (4.87%) \r\n \r\nSchool District's proportionate share of the net OPEB liability \r\n \r\n$ 58,909,762.00 $ \r\n \r\n50,449,983.00 $ 43,628,057.00 \r\n \r\n- 30 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"I\" \r\n \r\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 \r\nOPEB liability, as well as what the School District's proportionate share of the net OPEB liability would \r\nbe if it were calculated using healthcare cost trend rates that are 1-percentage-point lower or 1- \r\npercentage-point higher than the current healthcare cost trend rates: \r\n \r\n1% Decrease \r\n \r\nCurrent Healthcare Cost Trend Rate \r\n \r\n1% Increase \r\n \r\nSchool District's proportionate share \r\n \r\nof the net OPEB liability \r\n \r\n$ 42,413,707.00 $ \r\n \r\n50,449,983.00 $ 60,720,047.00 \r\n \r\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. \r\n \r\nNOTE 14: RETIREMENT PLANS \r\n \r\nThe School District participates in various retirement plans administered by the State of Georgia, as further explained below. \r\nTEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) \r\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. \r\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. \r\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 20.80% of payroll was required from the School District and 0.1% of payroll was required from the State. For the current fiscal year, employer contributions to the pension plan were $8,235,903.09 and $37,607.64 from the School District and the State, respectively. \r\n \r\n- 31 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"I\" \r\n \r\nEMPLOYEES' RETIREMENT SYSTEM \r\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. \r\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. \r\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. \r\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. \r\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 $44,658.15 for the current fiscal year. \r\nPUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM (PSERS) \r\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. \r\n \r\n- 32 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\n \r\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. \r\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. \r\n \r\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 $109,562.00. \r\nPension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions \r\n \r\nAt June 30, 2019, the School District reported a liability of $60,979,347.00 for its proportionate share of the net pension liability for TRS ($60,768,369.00) and ERS ($210,978.00). \r\n \r\nThe TRS net pension liability reflected a reduction for support provided to the School District by the State of Georgia for certain public school support personnel. The amount recognized by the School District as its proportionate share of the net pension liability, the related State of Georgia support, and the total portion of the net pension liability that was associated with the School District were as follows: \r\n \r\nSchool District's proportionate share of the net pension liability \r\n \r\n$ 60,768,369.00 \r\n \r\nState of Georgia's proportionate share of the net pension liability associated with the School District \r\n \r\n289,755.00 \r\n \r\nTotal \r\n \r\n$ 61,058,124.00 \r\n \r\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. \r\nAt June 30, 2018, the School District's TRS proportion was 0.327378%, which was a decrease of 0.005302% from its proportion measured as of June 30, 2017. At June 30, 2018, the School District's ERS proportion was 0.005132%, which was a decrease of 0.000100% from its proportion measured as of June 30, 2017. \r\n \r\n- 33 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"I\" \r\n \r\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 $565,141.00. \r\n \r\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. \r\n \r\nFor the year ended June 30, 2019, the School District recognized pension expense of $5,193,365.00 for TRS, $38,896.00 for ERS and $130,851.00 for PSERS and revenue of $58,284.00 for TRS and $130,851.00 for PSERS. The revenue is support provided by the State of Georgia. For TRS the State of Georgia support is provided only for certain support personnel. \r\n \r\nAt June 30, 2019, the School District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: \r\n \r\nTRS Deferred Outflows of Resources \r\n \r\nDeferred Inflows of Resources \r\n \r\nERS \r\n \r\nDeferred \r\n \r\nDeferred \r\n \r\nOutflows of \r\n \r\nInflows of \r\n \r\nResources \r\n \r\nResources \r\n \r\nDifferences between expected and actual experience \r\nChanges of assumptions \r\nNet difference between projected and actual earnings on pension plan investments \r\nChanges in proportion and differences between School District contributions and proportionate share of contributions \r\nSchool District contributions subsequent to the measurement date \r\nTotal \r\n \r\n$ 4,022,952.00 $ 125,245.00 916,973.00 \r\n \r\n- \r\n \r\n1,661,525.00 \r\n \r\n- \r\n \r\n2,198,398.00 \r\n \r\n8,235,903.09 \r\n \r\n- \r\n \r\n$ 13,175,828.09 $ 3,985,168.00 \r\n \r\n$ 6,562.00 $ \r\n \r\n- \r\n \r\n9,940.00 \r\n \r\n- \r\n \r\n- \r\n \r\n4,862.00 \r\n \r\n4,178.00 \r\n \r\n2,472.00 \r\n \r\n44,658.15 $ 65,338.15 $ 7,334.00 \r\n \r\nThe School District contributions subsequent to the measurement date of $8,235,903.09 for TRS and $44,658.15 for ERS are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ended June 30, 2020. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: \r\n \r\nYear Ended June 30: \r\n \r\nTRS \r\n \r\nERS \r\n \r\n2020 2021 2022 2023 2024 \r\n \r\n$ 2,354,358.00 $ 18,493.00 \r\n \r\n$ 959,755.00 $ 5,107.00 \r\n \r\n$ (2,154,976.00) $ (8,082.00) \r\n \r\n$ (243,425.00) $ (2,172.00) \r\n \r\n$ 39,045.00 $ \r\n \r\n- \r\n \r\n- 34 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"I\" \r\n \r\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: \r\n \r\nTeachers Retirement System: \r\n \r\nInflation \r\n \r\n2.75% \r\n \r\nSalary increases \r\n \r\n3.25%  9.00%, average, including inflation \r\n \r\nInvestment rate of return \r\n \r\n7.50%, net of pension plan investment expense, including inflation \r\n \r\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. \r\n \r\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. \r\n \r\nEmployees' Retirement System: \r\n \r\nInflation \r\n \r\n2.75% \r\n \r\nSalary increases \r\n \r\n3.25% - 7.00%, including inflation \r\n \r\nInvestment rate of return \r\n \r\n7.30%, net of pension plan investment expense, including inflation \r\n \r\nPost-retirement mortality rates were based on the RP-2000 Combined Mortality Table with future \r\nmortality improvement projected to 2025 with the Society of Actuaries' projection scale BB and set \r\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 \r\nof Actuaries' projection scale BB and set back 7 years for males and set forward 3 years for females \r\nwas used for death after disability retirement. There is a margin for future mortality improvement in \r\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 \r\nactual number of deaths that occurred during the study period for service retirements and \r\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. \r\n \r\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. \r\n \r\nPublic School Employees Retirement System: \r\n \r\nInflation \r\n \r\n2.75% \r\n \r\nSalary increases \r\n \r\nN/A \r\n \r\nInvestment rate of return \r\n \r\n7.30%, net of pension plan investment expense, including inflation \r\n \r\n- 35 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\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. \r\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: \r\n \r\nAsset class \r\n \r\nTRS Target allocation \r\n \r\nERS/PSERS Target \r\nallocation \r\n \r\nLong-term expected real rate of return* \r\n \r\nFixed income Domestic large stocks Domestic mid stocks Domestic small stocks International developed market stocks International emerging market stocks Alternative \r\n \r\n30.00% 39.80% \r\n3.70% 1.50% 19.40% 5.60% \r\n- \r\n \r\n30.00% 37.20% \r\n3.40% 1.40% 17.80% 5.20% 5.00% \r\n \r\n(0.50)% 9.00% 12.00% 13.50% 8.00% 12.00% 10.50% \r\n \r\nTotal \r\n \r\n100.00% \r\n \r\n100.00% \r\n \r\n* Rates shown are net of the 2.75% assumed rate of inflation \r\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. \r\n \r\n- 36 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"I\" \r\n \r\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 \r\npension liability calculated using the discount rate of 7.50% and 7.30%, as well as what the School \r\nDistrict'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% \r\nand 8.30%) than the current rate: \r\n \r\nTeachers Retirement System: \r\n \r\n1% Decrease (6.50%) \r\n \r\nCurrent Discount Rate (7.50%) \r\n \r\n1% Increase (8.50%) \r\n \r\nSchool District's proportionate share of the net pension liability \r\n \r\n$ 101,439,808.00 $ \r\n \r\n60,768,369.00 $ 27,253,033.00 \r\n \r\nEmployees' Retirement System: \r\nSchool District's proportionate share of the net pension liability \r\n \r\n1% Decrease (6.30%) \r\n \r\nCurrent Discount Rate (7.30%) \r\n \r\n1% Increase (8.30%) \r\n \r\n$ \r\n \r\n300,086.00 $ \r\n \r\n210,978.00 $ \r\n \r\n135,056.00 \r\n \r\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 publicly available at www.trsga.com/publications and http://www.ers.ga.gov/formspubs/formspubs.html. \r\nPOLK COUNTY SCHOOL DISTRICT SOCIAL SECURITY REPLACEMENT PLAN \r\nPlan Description: As of January 2004, the School District established a single employer defined benefit pension plan for the group of employees covered under the Public Service Employees Retirement System (PSERS). Recognizing that PSERS was a limited defined benefit plan that does not meet the requirements of a qualified social security replacement plan, the new plan was established for these employees to meet the requirements of a social security replacement plan. \r\nThe School District Social Security Replacement Plan (Plan) provides a pension benefit for each participant at retirement, equal to 1.5% of the participant's Average Monthly Compensation multiplied by his Years of Credited Service up to 40 Years of Credited Service. Years of service subsequent to July 1, 1991, are counted for purposes of determining a participant's benefit. The funding method and determination of benefits payable are provided in or authorized by various sections of Title 47 of the Official Code of Georgia Annotated (\"O.C.G.A.\"). The Plan does not issue a separate financial report. \r\nThe employee is always 100% vested in his accrued benefit in the Plan. \r\nThe Plan is funded by employer contributions held in trust by Reliance Trust Company. The Actuary for the Plan is Swerdlin \u0026 Company. The Actuary determines the Plan liabilities and required contributions on an annual basis. \r\nAs of January 1, 2019, there were 387 Plan participants, consisting of the following: \r\nJanuary 1, 2019 \r\n \r\nActive Plan members \r\n \r\n119 \r\n \r\nVested terminated participants \r\n \r\n168 \r\n \r\nRetirees, beneficiaires, and disabled participants \r\n \r\n100 \r\n \r\n387 \r\n \r\n- 37 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"I\" \r\n \r\nFunding Policy: Employees are neither required nor permitted to make contributions to the Plan. The Polk County School District (Employer) makes contributions required to fund the cost of the benefits provided to its eligible employees by this Plan. The Employer makes such contributions as necessary to fund the Plan in accordance with all applicable minimum funding standards under Georgia law. \r\nThe Employer's Annual Required Minimum Contribution is the actuarially determined amount necessary to fund the plan benefits. The current year required minimum contribution was $332,646.00. The current year contribution rate was 14.17% of annual covered payroll. \r\nInvestments: The Plan maintains an investment policy which fosters prudent and sound judgment in the management of plan assets to ensure safety of capital consistent with the fiduciary responsibility to the citizens of Georgia and which conforms to the Plan's investment policy. All investments are consistent with Polk School District's policy and applicable Federal and state laws. \r\nInvestments are reported at fair value. Securities are traded on a national or international exchange and are valued at the last reported sales price. The Plan's investment policy requires diversification of assets in an effort to avoid the risk of large losses and maximize the investment return to the Plan consistent with market and economic risk. \r\nAs of December 31, 2018, the Plan's assets are: \r\nAsset Class \r\n \r\nCash and Equivalent \r\n \r\n$ \r\n \r\nShort Term Investments \r\n \r\nDomestic Equities \r\n \r\nInternational Equities \r\n \r\nFixed Income \r\n \r\n31,081.00 132,898.00 1,811,480.00 180,765.00 1,698,659.00 \r\n \r\n$ \r\n \r\n3,854,883.00 \r\n \r\nFor the plan year ended December 31, 2018, the annual money-weighted rate of return on pension plan investments, net of plan investment expense, was (6.73)%. \r\nThe following table summarizes the adopted asset allocation policy at December 31, 2018: \r\n \r\nAsset Class \r\n \r\nAdopted Asset Allocation \r\n \r\nDomestic Equities International Equities Fixed Income Cash \r\n \r\n40% to 50% 1% to 5% \r\n35% to 45% 1% to 10% \r\n \r\nTotal \r\n \r\n100% \r\n \r\n- 38 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"I\" \r\n \r\nPension Liability, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to the Plan: \r\nThe components of the net pension liability at December 31, 2018 were as follows: \r\n \r\nTotal pension liability Plan fiduciary net position \r\nNet pension liability \r\n \r\n$ 7,815,160.00 (3,852,436.00) \r\n$ 3,962,724.00 \r\n \r\nThe Plan's fiduciary net position as a percentage of its total pension liability is 49.29%. \r\nThe net pension liability for the Plan was measured as of December 31, 2018. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of January 1, 2019. An expected total pension liability as of December 31, 2018 was determined using standard roll-forward techniques. \r\nFor the year ended June 30, 2019, the School District recognized pension expense of $502,310.00 for the Plan. \r\nAt June 30, 2019, the School District reported deferred outflows and resources and deferred inflows of resources related to the Plan from the following sources: \r\n \r\nNet difference between projected and actual earnings on pension plan investments \r\n \r\nDeferred Outflows of Resources \r\n$ 495,696.00 $ \r\n \r\nDeferred Inflows of Resources \r\n85,266.00 \r\n \r\nDifferences between expected and actual experiences \r\n \r\n95,719.00 \r\n \r\n419,994.00 \r\n \r\nChanges in actuarial assumptions \r\n \r\n370,792.00 \r\n \r\n290,682.00 \r\n \r\nTotal \r\n \r\n$ 962,207.00 $ 795,942.00 \r\n \r\nAmounts reported as deferred outflows of resources and deferred inflows of resources related to the Plan will be recognized in pension expense as follow: \r\n \r\nYear Ended June 30: \r\n \r\n2019 2020 2021 2022 2023 2024 \r\n \r\n$ 111,569.00 $ 57,921.00 $ 56,156.00 $ 84,576.00 $ (25,052.00) $ (118,905.00) \r\n \r\n- 39 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"I\" \r\n \r\nActuarial Methods and Assumptions \r\nThe total pension liability was determined as of January 1, 2019 using the following actuarial assumptions and methods (see the January 1, 2019 actuarial valuation report for other assumptions): \r\n \r\nInflation Salary Increases Investment rate of return Single equivalent discount rate \r\n \r\n2.50% 3.00% 7%, net of pension plan investment expense 5.43%, net of pension plan investment expense \r\n \r\nMortality rates were based on the RP-2014 Blue Collar with MP-2018 \r\nThe long-term expected rate of return on the Plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return, net investment expenses and inflation, are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by the expected inflation. Best estimates of arithmetic real rates of return for each major asset class, included in the Plan's target asset allocation as of December 31, 2018. \r\n \r\nAsset Class \r\n \r\nTarget Allocation \r\n \r\nLong-Term Expected Real Rate of Return* \r\n \r\nDomestic Equitites International Equities Fixed Income Cash \r\n \r\n49% \r\n \r\n5.25% \r\n \r\n5% \r\n \r\n6.00% \r\n \r\n41% \r\n \r\n3.25% \r\n \r\n5% \r\n \r\n1.50% \r\n \r\n*Rates shown are net of the 2.50% assumed rate of inflation. \r\nDiscount rate: The discount rate used to measure the total pension liability was the single equivalent discount rate shown above. The projection of cash flows used to determine the discount rate assumed that employer contributions will be made at rates equal to actuarially determined contribution rates. Based on this assumption, the Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current Plan members through 2044 and the long-term expected rate of return of 7.00% was applied to this period. The December 31, 2018 20-year tax-free municipal bond yield of 4.09% was applied after 2044. \r\nSensitivity of the Polk County School District's net pension liability to changes in the discount rate: The following represents the School District's net pension liability calculated using the stated discount rate, as well as what the net pension liability would be if it were calculated using a discount rate that is 1percentage-point lower (4.49%) or 1-percentage-point higher (6.49%) than the current rate: \r\n \r\nSchool District's proportionate share of the net pension liability \r\n \r\n1% Decrease (4.49%) \r\n \r\nCurrent Rate (5.49%) \r\n \r\n1% Increase (6.49%) \r\n \r\n$ 4,957,399.00 $ 3,962,724.00 $ 3,126,221.00 \r\n \r\n- 40 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 15: TAX ABATEMENTS \r\nThe Development Authority of Polk County, the Cedartown Development Authority and the Rockmart Development Authority can enter into agreements with private individuals or entities for economic or industrial projects to encourage the creation of jobs and capital investment through an \"Economic Incentive Program.\" This program is used to incentivize these businesses to build, relocate, expand, or renovate within incorporated and unincorporated Polk County. Each agreement provides a property tax benefit to the company through a schedule of discounted valuation that reduces, for ad valorem tax purposes, the fair market value of real and/or personal property that is held by the Authorities and leased to the company. Georgia case law and the Authorities' enabling legislation to provide the Authorities with the power to enter into such agreements with private companies. \r\nThe Authorities may accept title to real and personal property assets from a company in return for job creation and capital investment, and provide a tax benefit to the company through a lease agreement with the Authority. In considering eligibility for providing this benefit to a company, the Authorities review the following criteria: \r\n1. Eligible businesses can include new and existing industrial businesses. 2. But for an incentive agreement, the company would not create the jobs and investment in \r\nthe community. 3. Eligible projects must involve significant investment in real and personal property. 4. The average wage of the business' employees should be above the average wage of goods \r\nproducing employees in Polk County. 5. The business should offer medical benefits to all employees. 6. The impact to job retention will be considered for each expansion project. 7. As a condition of assistance, a business will be required to work with the Authority to \r\nconvey title to the Authority. \r\nIn return for a property tax benefit, a company is required to commit to creating jobs and capital investment within a defined period as part of a performance and accountability agreement with the Authority that includes provisions for the company to pay back a prorated portion of the benefit if they fail to meet the performance criteria by a specified date. The Authorities monitor compliance with performance and accountability agreements to ensure the companies meet their commitments. \r\nFor the Polk County School District's year ending June 30, 2019 the cumulative property tax not collected due to incentive agreements was $60,877.17; however, $550,181.84 was paid to the Polk County School District through the Economic Incentive Program for the same period. These agreements will result in an estimated $63.7 million in new capital investment for Polk County and more than 186 new/retained jobs. According to the National Association of Manufacturers, the new capital investment will generate an additional $159.3 million in our economy, and the 186 jobs will generate another 632 jobs in other sectors. \r\nIncluded in the $60,877.17 abated, the following are tax abatement agreements amounts with individual companies that each exceeded 10.00 percent of the total amount abated: \r\n A property tax abatement was granted to Kimoto Tech in the amount of $33,525.99.  A property tax abatement was granted to Washington Gas in the amount of $7,786.17.  Property tax abatements were granted to Inman Solar totaling $19,565.01. \r\nNOTE 16: SUBSEQUENT EVENTS \r\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. \r\n- 41 - \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY TEACHERS RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"1\" \r\n \r\nYear Ended \r\n \r\nSchool District's proportion of the net \r\npension liability \r\n \r\nSchool District's proportionate share of the net pension liability \r\n \r\nState of Georgia's proportionate share of the net pension liability \r\nassociated with the School District \r\n \r\nTotal \r\n \r\nSchool District's covered payroll \r\n \r\nSchool District's proportionate share of the net pension liability as a percentage of its \r\ncovered payroll \r\n \r\nPlan fiduciary net position as a \r\npercentage of the total pension liability \r\n \r\n2019 2018 2017 2016 2015 \r\n \r\n0.327378% $ 0.332680% $ 0.342487% $ 0.345774% $ 0.346443% $ \r\n \r\n60,768,369.00 $ 61,829,603.00 $ 70,658,887.00 $ 52,640,658.00 $ 43,768,503.00 $ \r\n \r\n289,755.00 748,059.00 944,080.00 600,892.00 560,177.00 \r\n \r\n$ 61,058,124.00 $ 62,577,662.00 $ 71,602,967.00 $ 53,241,550.00 $ 44,328,680.00 \r\n \r\n$ 39,127,366.15 $ 38,673,234.64 $ 38,069,372.98 $ 36,915,144.69 $ 35,545,926.47 \r\n \r\n155.31% 159.88% 185.61% 142.60% 123.13% \r\n \r\n80.27% 79.33% 76.06% 81.44% 84.03% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 43 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"2\" \r\n \r\nYear Ended \r\n \r\nSchool District's proportion of the net \r\npension liability \r\n \r\nSchool District's proportionate share of the net pension \r\nliability \r\n \r\nSchool District's covered payroll \r\n \r\nSchool District's proportionate share of the net pension liability as a \r\npercentage of covered payroll \r\n \r\nPlan fiduciary net position as a \r\npercentage of the total pension liability \r\n \r\n2019 2018 2017 2016 2015 \r\n \r\n0.005132% $ 0.005232% $ 0.004803% $ 0.003427% $ 0.003393% $ \r\n \r\n210,978.00 212,489.00 227,202.00 138,841.00 127,258.00 \r\n \r\n$ 130,926.01 $ 128,331.00 $ 111,677.30 $ 78,360.00 $ 76,400.48 \r\n \r\n161.14% 165.58% 203.45% 177.18% 166.57% \r\n \r\n76.68% 76.33% 72.34% 76.20% 77.99% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 44 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY PUBLIC SCHOOLS EMPLOYEES RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"3\" \r\n \r\nYear Ended \r\n \r\nSchool District's proportion of the net \r\npension liability \r\n \r\nSchool District's proportionate share of the net pension \r\nliability \r\n \r\nState of Georgia's proportionate share of the net pension liability \r\nassociated with the School District \r\n \r\nTotal \r\n \r\nSchool District's covered payroll \r\n \r\nSchool District's proportionate share of the net pension liability as a percentage of its \r\ncovered payroll \r\n \r\nPlan fiduciary net position as a \r\npercentage of the total pension liability \r\n \r\n2019 2018 2017 2016 2015 \r\n \r\n0.00% $ 0.00% $ 0.00% $ 0.00% $ 0.00% $ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n565,141.00 $ 565,141.00 $ 1,712,200.77 551,379.00 $ 551,379.00 $ 1,883,260.87 762,372.00 $ 762,372.00 $ 1,810,170.59 485,473.00 $ 485,473.00 $ 1,791,780.27 443,309.00 $ 443,309.00 $ 1,790,955.74 \r\n \r\nN/A \r\n \r\n85.26% \r\n \r\nN/A \r\n \r\n85.69% \r\n \r\nN/A \r\n \r\n81.00% \r\n \r\nN/A \r\n \r\n87.00% \r\n \r\nN/A \r\n \r\n88.29% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 45 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET OPEB LIABILITY \r\nSCHOOL OPEB FUND FOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"4\" \r\n \r\nYear Ended \r\n \r\nSchool District's proportion of the net \r\nOPEB liability \r\n \r\nSchool District's proportionate share of the net OPEB liability \r\n \r\nState of Georgia's proportionate share of the \r\nnet OPEB liability associated with the School \r\nDistrict \r\n \r\nTotal \r\n \r\nSchool District's covered-employee \r\npayroll \r\n \r\nSchool District's proportionate share of the \r\nnet OPEB liability as a percentage of its covered- \r\nemployee payroll \r\n \r\nPlan fiduciary net position as a \r\npercentage of the total OPEB liability \r\n \r\n2019 2018 \r\n \r\n0.396941% $ 50,449,983.00 $ 0.402911% $ 56,608,834.00 $ \r\n \r\n- \r\n \r\n$ 50,449,983.00 $ 32,469,171.98 \r\n \r\n- \r\n \r\n$ 56,608,834.00 $ 31,880,339.52 \r\n \r\n155.38% 177.57% \r\n \r\n2.93% 1.61% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 46 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \r\nSCHEDULE OF CONTRIBUTIONS TEACHERS RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"5\" \r\n \r\nYear Ended \r\n2019 2018 2017 2016 2015 \r\n \r\nContractually required contribution \r\n \r\nContributions in relation to the contractually required contribution \r\n \r\nContribution deficiency (excess) \r\n \r\nSchool District's covered payroll \r\n \r\n$ \r\n \r\n8,235,903.09 $ \r\n \r\n$ \r\n \r\n6,456,048.34 $ \r\n \r\n$ \r\n \r\n5,456,446.48 $ \r\n \r\n$ \r\n \r\n5,360,865.43 $ \r\n \r\n$ \r\n \r\n4,797,913.58 $ \r\n \r\n8,235,903.09 $ 6,456,048.34 $ 5,456,446.48 $ 5,360,865.43 $ 4,797,913.58 $ \r\n \r\n- \r\n \r\n$ 39,589,606.96 \r\n \r\n- \r\n \r\n$ 39,127,366.15 \r\n \r\n- \r\n \r\n$ 38,673,234.64 \r\n \r\n- \r\n \r\n$ 38,069,372.98 \r\n \r\n- \r\n \r\n$ 36,915,144.69 \r\n \r\nContribution as a percentage of covered \r\npayroll \r\n20.80% 16.73% 14.11% 14.08% 13.00% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 47 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \r\nSCHEDULE OF CONTRIBUTIONS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"6\" \r\n \r\nYear Ended \r\n2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 \r\n \r\nContractually required contribution \r\n \r\nContributions in relation to the contractually required contribution \r\n \r\nContribution deficiency (excess) \r\n \r\nSchool District's covered payroll \r\n \r\nContribution as a percentage of covered \r\npayroll \r\n \r\n$ \r\n \r\n44,658.15 $ \r\n \r\n$ \r\n \r\n32,475.72 $ \r\n \r\n$ \r\n \r\n31,838.88 $ \r\n \r\n$ \r\n \r\n27,606.43 $ \r\n \r\n$ \r\n \r\n17,207.88 $ \r\n \r\n$ \r\n \r\n14,104.00 $ \r\n \r\n$ \r\n \r\n11,306.36 $ \r\n \r\n$ \r\n \r\n2,581.12 $ \r\n \r\n$ \r\n \r\n6,124.09 $ \r\n \r\n$ \r\n \r\n18,234.41 $ \r\n \r\n44,658.15 $ 32,475.72 $ 31,838.88 $ 27,606.43 $ 17,207.88 $ 14,104.00 $ 11,306.36 $ \r\n2,581.12 $ 6,124.09 $ 18,234.41 $ \r\n \r\n- \r\n \r\n$ \r\n \r\n180,218.56 \r\n \r\n- \r\n \r\n$ \r\n \r\n130,926.01 \r\n \r\n- \r\n \r\n$ \r\n \r\n128,331.00 \r\n \r\n- \r\n \r\n$ \r\n \r\n111,677.30 \r\n \r\n- \r\n \r\n$ \r\n \r\n78,360.00 \r\n \r\n- \r\n \r\n$ \r\n \r\n76,400.48 \r\n \r\n- \r\n \r\n$ \r\n \r\n75,872.88 \r\n \r\n- \r\n \r\n$ \r\n \r\n22,193.64 \r\n \r\n- \r\n \r\n$ \r\n \r\n58,828.91 \r\n \r\n- \r\n \r\n$ \r\n \r\n175,162.44 \r\n \r\n24.78% 24.81% 24.81% 24.72% 21.96% 18.46% 14.90% 11.63% 10.41% 10.41% \r\n \r\n- 48 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \r\nSCHEDULE OF CONTRIBUTIONS SCHOOL OPEB FUND \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"7\" \r\n \r\nYear Ended \r\n \r\nContractually required contribution \r\n \r\nContributions in relation to the contractually required \r\ncontribution \r\n \r\nContribution deficiency (excess) \r\n \r\nSchool District's covered-employee \r\npayroll \r\n \r\nContribution as a percentage of covered- \r\nemployee payroll \r\n \r\n2019 \r\n \r\n$ \r\n \r\n2018 \r\n \r\n$ \r\n \r\n2017 \r\n \r\n$ \r\n \r\n2,110,001.00 $ 2,057,312.00 $ 2,100,811.00 $ \r\n \r\n2,110,001.00 $ 2,057,312.00 $ 2,100,811.00 $ \r\n \r\n- \r\n \r\n$ 32,761,391.83 \r\n \r\n- \r\n \r\n$ 32,469,171.98 \r\n \r\n- \r\n \r\n$ 31,880,339.52 \r\n \r\n6.44% 6.34% 6.59% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displaced as they become available. \r\n \r\n- 49 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS \r\nSOCIAL SECURITY REPLACEMENT PLAN YEAR ENDING DECEMBER 31 \r\n \r\nSCHEDULE \"8\" \r\n \r\nTotal Pension Liability Service Cost Interest Differences between Expected and Actual Experience Change of Assumptions Benefit Payments \r\nNet Change in Total Pension Liability \r\nTotal Pension Liability - beginning \r\n \r\n2019 \r\n \r\n2018 \r\n \r\n2017 \r\n \r\n2016 \r\n \r\n2015 \r\n \r\n2014 \r\n \r\n$ 205,015.00 $ 202,546.00 $ 211,474.00 $ 252,078.00 $ 203,802.00 $ 164,756.00 \r\n \r\n424,569.00 \r\n \r\n416,164.00 \r\n \r\n393,557.00 \r\n \r\n357,947.00 \r\n \r\n378,679.00 \r\n \r\n363,955.00 \r\n \r\n(128,097.00) \r\n \r\n(63,999.00) \r\n \r\n70,820.00 \r\n \r\n62,585.00 \r\n \r\n(446,217.00) \r\n \r\n251,101.00 \r\n \r\n(149,027.00) \r\n \r\n128,319.00 \r\n \r\n(153,139.00) \r\n \r\n(61,902.00) \r\n \r\n471,960.00 \r\n \r\n832,322.00 \r\n \r\n(333,310.00) \r\n \r\n(332,304.00) \r\n \r\n(321,825.00) \r\n \r\n(294,805.00) \r\n \r\n(244,169.00) \r\n \r\n(221,185.00) \r\n \r\n19,150.00 \r\n \r\n350,726.00 \r\n \r\n200,887.00 \r\n \r\n315,903.00 \r\n \r\n364,055.00 \r\n \r\n1,390,949.00 \r\n \r\n7,796,010.00 \r\n \r\n7,445,284.00 \r\n \r\n7,244,397.00 \r\n \r\n6,928,494.00 \r\n \r\n6,564,439.00 \r\n \r\n5,173,490.00 \r\n \r\nTotal Pension Liability - ending (a) \r\nPlan Fiduciary Net Position Contributions - employer Net Investment Income Benefit Payments Administrative Expenses Due to Broker \r\nNet change in Plan Fiduciary Net Position \r\nPlan Fiduciary Net Position - beginning \r\nPlan Fiduciary Net Position - ending (b) \r\n \r\n$ 7,815,160.00 $ 7,796,010.00 $ 7,445,284.00 $ 7,244,397.00 $ 6,928,494.00 $ 6,564,439.00 \r\n \r\n$ 332,646.00 $ 335,798.00 $ 349,969.00 $ 315,891.00 $ 310,889.00 $ 304,253.00 \r\n \r\n(271,717.00) \r\n \r\n392,875.00 \r\n \r\n238,741.00 \r\n \r\n(20,197.00) \r\n \r\n147,675.00 \r\n \r\n473,233.00 \r\n \r\n(333,310.00) \r\n \r\n(332,304.00) \r\n \r\n(321,825.00) \r\n \r\n(294,805.00) \r\n \r\n(244,169.00) \r\n \r\n(221,185.00) \r\n \r\n(21,147.00) \r\n \r\n(24,030.00) \r\n \r\n(21,220.00) \r\n \r\n(29,660.00) \r\n \r\n(25,205.00) \r\n \r\n(23,094.00) \r\n \r\n- \r\n \r\n- \r\n \r\n(1,113.00) \r\n \r\n(1,229.00) \r\n \r\n(4,493.00) \r\n \r\n(242.00) \r\n \r\n(293,528.00) \r\n \r\n372,339.00 \r\n \r\n244,552.00 \r\n \r\n(30,000.00) \r\n \r\n184,697.00 \r\n \r\n532,965.00 \r\n \r\n4,145,964.00 \r\n \r\n3,773,625.00 \r\n \r\n3,529,073.00 \r\n \r\n3,559,073.00 \r\n \r\n3,374,376.00 \r\n \r\n2,841,411.00 \r\n \r\n3,852,436.00 \r\n \r\n4,145,964.00 \r\n \r\n3,773,625.00 \r\n \r\n3,529,073.00 \r\n \r\n3,559,073.00 \r\n \r\n3,374,376.00 \r\n \r\nNet Pension Liability - ending (a - b) \r\n \r\n$ 3,962,724.00 $ 3,650,046.00 $ 3,671,659.00 $ 3,715,324.00 $ 3,369,421.00 $ 3,190,063.00 \r\n \r\nPlan Fiduciary Net Position as a percentage of the Total Pension Liability \r\n \r\n49.29% \r\n \r\n53.18% \r\n \r\n50.68% \r\n \r\n48.71% \r\n \r\n51.37% \r\n \r\n51.40% \r\n \r\nCovered-Employee Payroll \r\n \r\n$ 2,347,678.00 $ 2,416,621.00 $ 2,377,259.00 $ 2,600,407.00 $ 2,562,945.00 $ 2,726,676.00 \r\n \r\nNet Pension Liability as percentage of Covered-Employee Payroll \r\n \r\n168.79% \r\n \r\n151.04% \r\n \r\n154.45% \r\n \r\n142.87% \r\n \r\n131.47% \r\n \r\n117.00% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 50 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \r\nSCHEDULE OF CONTRIBUTIONS SOCIAL SECURITY REPLACEMENT PLAN FOR THE YEAR ENDED DECEMBER 31 \r\n \r\nSCHEDULE \"9\" \r\n \r\nYear Ended \r\n2019 2018 2017 2016 2015 2014 \r\n \r\nActually determined contribution \r\n \r\nContributions in relation to the contractually required contribution \r\n \r\nContribution deficiency (excess) \r\n \r\nSchool District's covered payroll \r\n \r\n$ \r\n \r\n332,646.00 $ \r\n \r\n$ \r\n \r\n335,798.00 $ \r\n \r\n$ \r\n \r\n328,611.00 $ \r\n \r\n$ \r\n \r\n315,891.00 $ \r\n \r\n$ \r\n \r\n310,889.00 $ \r\n \r\n$ \r\n \r\n304,253.00 $ \r\n \r\n332,646.00 $ 335,798.00 $ 349,969.00 $ 315,891.00 $ 310,889.00 $ 304,253.00 $ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n(21,358.00) $ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n2,347,678.00 2,416,621.00 2,377,259.00 2,600,407.00 2,562,945.00 2,726,676.00 \r\n \r\nContribution as a percentage of covered \r\npayroll \r\n14.17% 13.90% 14.72% 12.15% 12.13% 11.16% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 51 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF INVESTMENT RETURNS SOCIAL SECURITY REPLACEMENT PLAN \r\nYEAR ENDING DECEMBER 31 \r\n \r\nYear Ended \r\n2019 2018 2017 2016 2015 2014 \r\n \r\nAnnual Money - Weighted Rate of Return, Net of Investment \r\nExpense \r\n(6.73)% 10.88% \r\n7.04% (0.59)% \r\n4.55% 17.25% \r\n \r\nSCHEDULE \"10\" \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 52 - \r\n \r\n POLK COUNTY BOARD OF EDUCATION NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION \r\nFOR THE YEAR ENDED JUNE 30, 2019 \r\n \r\nSCHEDULE \"11\" \r\n \r\nTeachers Retirement System \r\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). \r\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. \r\nEmployees' Retirement System \r\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. \r\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. \r\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. \r\n \r\nPublic School Employees Retirement System \r\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. \r\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). \r\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. \r\n \r\nSchool OPEB Fund \r\nChanges of benefit terms: There have been no changes in benefit terms. \r\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. \r\nThe discount rate was updated from 3.58% as of June 30, 2017 to 3.87% as of June 30, 2018. \r\n \r\nSocial Security Replacement Plan \r\n \r\nChanges of assumptions: There were no changes in benefits that affected the measurement of the total pension liability since the prior measurement date. However, in 2019 the amounts reported as changes in assumptions resulted from an increase in the discount rate from 5.43% to 5.49% since the prior measurement date. \r\n \r\nMethod and assumptions used in calculations of actuarially determined contributions: The actuarially determined contribution rates in the schedule of contributions are calculated as of January 1, 2019. The following actuarial methods and assumptions were used to determine the contractually required contributions for year ended June 30, 2019 reported in that schedule: \r\n \r\nValuation date Actuarial cost method Amortization method Remaining amortization period Asset valuation method \r\nInflation rate Salary increases Investment rate of return \r\n \r\nJanuary 1, 2019 Entry age Level percentage of payroll 20 years Method recognized a portion of the difference between the market value of assets and expected actuarial value of assets, based on the assumed interest rate of return. The amount recognized each year is 20% of the difference between market value and expected actuarial value. 2.50% 3.00%, per annum 7.00%, net of pension plan investment \r\n \r\n- 53 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT GENERAL FUND \r\nSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL \r\nYEAR ENDED JUNE 30, 2019 \r\n \r\nSCHEDULE \"12\" \r\n \r\nREVENUES \r\nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous \r\nTotal Revenues \r\nEXPENDITURES \r\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 \r\nTotal Expenditures \r\nExcess of Revenues over (under) Expenditures \r\nOTHER FINANCING USES \r\nOther Uses \r\nNet Change in Fund Balances \r\nFund Balances - Beginning \r\n \r\nNONAPPROPRIATED BUDGETS \r\n \r\nORIGINAL (1) \r\n \r\nFINAL (1) \r\n \r\nACTUAL AMOUNTS \r\n \r\nVARIANCE OVER/UNDER \r\n \r\n$ 13,035,000.00 $ 13,035,000.00 $ 16,045,839.56 $ \r\n \r\n- \r\n \r\n- \r\n \r\n245,694.49 \r\n \r\n50,370,641.00 \r\n \r\n50,853,830.52 \r\n \r\n51,502,716.54 \r\n \r\n5,856,059.00 \r\n \r\n6,211,622.00 \r\n \r\n10,034,424.56 \r\n \r\n2,065,580.00 \r\n \r\n2,065,580.00 \r\n \r\n2,436,513.42 \r\n \r\n12,827.00 \r\n \r\n12,827.00 \r\n \r\n15,309.58 \r\n \r\n250,000.00 \r\n \r\n250,000.00 \r\n \r\n1,140,632.99 \r\n \r\n71,590,107.00 \r\n \r\n72,428,859.52 \r\n \r\n81,421,131.14 \r\n \r\n3,010,839.56 245,694.49 648,886.02 \r\n3,822,802.56 370,933.42 2,482.58 890,632.99 \r\n8,992,271.62 \r\n \r\n51,657,067.67 \r\n2,115,104.37 1,917,802.65 1,098,069.35 \r\n704,662.98 4,297,286.71 1,035,965.40 6,185,204.88 2,734,000.46 \r\n197,295.51 43,103.50 \r\n1,977,304.00 1,690,144.01 \r\n75,653,011.49 \r\n(4,062,904.49) \r\n \r\n51,755,512.20 \r\n2,151,875.66 1,934,617.65 1,098,069.35 \r\n708,151.98 4,318,412.71 1,035,965.40 6,334,105.41 3,162,647.16 \r\n197,295.51 46,821.18 \r\n2,219,033.00 4,645,289.02 \r\n79,607,796.23 \r\n(7,178,936.71) \r\n \r\n49,917,257.62 \r\n2,027,777.54 1,318,439.08 1,084,161.29 \r\n806,851.78 4,214,709.44 \r\n689,086.65 6,372,551.82 3,113,273.04 \r\n193,339.80 46,821.18 \r\n2,277,359.24 4,793,854.74 \r\n76,855,483.22 \r\n4,565,647.92 \r\n \r\n1,838,254.58 \r\n124,098.12 616,178.57 \r\n13,908.06 (98,699.80) 103,703.27 346,878.75 (38,446.41) 49,374.12 \r\n3,955.71 - \r\n(58,326.24) (148,565.72) \r\n2,752,313.01 \r\n11,744,584.63 \r\n \r\n(350,000.00) (4,412,904.49) 13,045,703.72 \r\n \r\n(350,000.00) (7,528,936.71) 14,597,999.52 \r\n \r\n4,565,647.92 14,478,169.13 \r\n \r\n350,000.00 12,094,584.63 \r\n(119,830.39) \r\n \r\nFund Balances - Ending \r\n \r\n$ \r\n \r\n8,632,799.23 $ \r\n \r\n7,069,062.81 $ 19,043,817.05 $ 11,974,754.24 \r\n \r\nNotes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual \r\n(1) Original and Final Budget amounts do not include the budgeted revenue or expenditures of the various principal accounts. The actual revenues and expenditures of the various principal accounts are $2,392,100.57 and $2,208,413.49, respectively. \r\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. \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 54 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \r\nYEAR ENDED JUNE 30, 2019 \r\n \r\nSCHEDULE \"13\" \r\n \r\nFUNDING AGENCY PROGRAM/GRANT \r\nAgriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program \r\nTotal U. S. Department of Agriculture \r\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 \r\nTotal Special Education Cluster \r\nOther Programs Pass-Through From Georgia Department of Education Career and Technical Education - Basic Grants to States Education for Homeless Children and Youth Education for Homeless Children and Youth English Language Acquisition State Grants English Language Acquisition State Grants 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 \r\nTotal Other Programs \r\nTotal U. S. Department of Education \r\n \r\nCFDA NUMBER \r\n \r\nPASSTHROUGH \r\nENTITY ID \r\nNUMBER \r\n \r\nEXPENDITURES IN PERIOD \r\n \r\n10.553 10.555 \r\n \r\n195GA324N1099 $ 195GA324N1099 \r\n \r\n1,482,402.10 3,125,452.72 \r\n4,607,854.82 \r\n \r\n84.027 84.027 84.173 84.173 \r\n \r\nH027A170073 H027A180073 H173A170081 H173A180081 \r\n \r\n84.048 84.196 84.196 84.365 84.365 84.358 84.358 84.424A 84.424A 84.367 84.367 84.010 84.010 \r\n \r\nV048A180010 S196A170011 S196A180011 S365A170010 S365A180010 S365B170010 S365B180010 S424A170011 S424A180011 S367A170001 S367A180001 S010A170010 S010A180010 \r\n \r\n305,930.00 1,317,658.40 \r\n35,868.00 42,221.80 \r\n1,701,678.20 \r\n98,922.00 7,299.23 102.23 \r\n20,291.00 53,065.79 29,891.93 138,814.07 15,494.00 136,959.01 188,749.00 93,476.74 525,727.51 2,014,828.82 \r\n3,323,621.33 \r\n5,025,299.53 \r\n \r\nTotal Expenditures of Federal Awards \r\n \r\n$ \r\n \r\n9,633,154.35 \r\n \r\nNotes to the Schedule of Expenditures of Federal Awards \r\nNote 1. Basis of Presentation \r\nThe accompanying schedule of expenditures of federal awards (the \"Schedule\") includes the federal award activity of the Polk County School District (the \"District\") 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. \r\nNote 2. Summary of Significant Accounting Policies \r\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. \r\nNote 3. Indirect Cost Rate \r\nThe Board has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 55 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2019 \r\nAGENCY/FUNDING \r\nGRANTS Bright From the Start: Georgia Department of Early Care and Learning Pre-Kindergarten Program \r\nEducation, 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 State Health Benefit Plan Employer Holiday Categorical Grants Pupil Transportation Regular Nursing Services Vocational Supervisor Education Equalization Funding Grant Other State Programs Food Services Math and Science Supplements Preschool Disability Services Residential Treatment Centers Grant Teachers Retirement Vocational Education \r\nOffice of the State Treasurer Public School Employees Retirement \r\nCONTRACT Human Resources, Georgia Department of Family Connection \r\nSee notes to the basic financial statements. \r\n \r\nSCHEDULE \"14\" \r\n \r\nGOVERNMENTAL FUND TYPES \r\nGENERAL FUND \r\n \r\n$ \r\n \r\n1,305,911.52 \r\n \r\n2,596,938.00 315,197.00 \r\n6,238,824.00 504,119.00 \r\n3,525,459.00 380,337.00 \r\n5,198,212.00 4,256,103.00 1,800,521.00 7,265,798.00 1,267,208.00 \r\n573,017.00 375,540.00 1,267,726.00 944,276.00 286,201.00 158,241.00 \r\n3,029.00 \r\n1,074,480.00 1,899,542.00 2,066,998.00 \r\n(417,690.00) \r\n808,259.00 162,638.00 \r\n28,598.00 6,414,331.00 \r\n125,356.00 47,664.79 \r\n246,272.00 463,984.00 \r\n37,607.64 122,466.00 \r\n109,562.00 \r\n \r\n49,990.59 \r\n \r\n$ \r\n \r\n51,502,716.54 \r\n \r\n- 56 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \r\nYEAR ENDED JUNE 30, 2019 \r\n \r\nSCHEDULE \"15\" \r\n \r\nPROJECT SPLOST V \r\n \r\nORIGINAL ESTIMATED \r\nCOST (1) \r\n \r\nCURRENT ESTIMATED COSTS (2) \r\n \r\nAMOUNT EXPENDED IN CURRENT YEAR (3) (4) \r\n \r\nAMOUNT EXPENDED IN PRIOR YEARS (3) (4) \r\n \r\nTOTAL COMPLETION \r\nCOST \r\n \r\nEXCESS PROCEEDS NOT \r\nEXPENDED \r\n \r\nConstructing, remodeling, improving, and equipping \r\n \r\nof existing facilities including Cedartown High \r\n \r\nSchool, Rockmart High School, Westside Elementary \r\n \r\nSchool and Eastside Elementary School. \r\n \r\n$ \r\n \r\n300,000.00 $ \r\n \r\n841,248.64 $ \r\n \r\n132,984.94 $ \r\n \r\n708,263.70 $ \r\n \r\n- $ \r\n \r\n- \r\n \r\nSPLOST VI \r\n \r\nFor the purposes acquiring, constructing, and equipping the following capital projects: \r\n \r\nElementary school classroom additions and \r\n \r\nrelated facilities, roofing and air conditioning \r\n \r\nHVAC improvements, track resurfacing at \r\n \r\nRockmart and Cedartown High Schools, gym \r\n \r\nrenovations at Rockmart High School, parking \r\n \r\nlots and access roads, equipment and \r\n \r\nfurnishings, technology devices, and physical \r\n \r\neducation and athletic equipment; \r\n \r\n11,644,647.02 \r\n \r\n10,390,550.99 \r\n \r\n469,314.05 \r\n \r\n7,723.64 \r\n \r\n- \r\n \r\n- \r\n \r\nSystem-wide instructional and administrative \r\n \r\ntechnology/infrastructure; \r\n \r\n1,750,000.00 \r\n \r\n1,250,000.00 \r\n \r\n714,604.09 \r\n \r\n225,900.00 \r\n \r\n- \r\n \r\n- \r\n \r\nCedartown High School Fine Arts building with \r\n \r\nthe expansion of and improvements to band \r\n \r\nand drama facilities, college and career \r\n \r\nfacilities, and expansions to administrative \r\n \r\noffices; \r\n \r\n6,850,682.01 \r\n \r\n8,458,100.13 \r\n \r\n3,065,631.05 \r\n \r\n214,024.79 \r\n \r\n- \r\n \r\n- \r\n \r\nRockmart High agriculture barn/learning center \r\n \r\nand college and career facilities; \r\n \r\n1,276,159.00 \r\n \r\n1,290,820.15 \r\n \r\n1,075,801.22 \r\n \r\n217,041.43 \r\n \r\n1,292,842.65 \r\n \r\n- \r\n \r\nSystem-wide Safety and Security systems and \r\n \r\nEquipment; \r\n \r\n284,750.00 \r\n \r\n329,035.76 \r\n \r\n161,443.89 \r\n \r\n159,345.59 \r\n \r\n- \r\n \r\n- \r\n \r\nPress box at Rockmart High School; \r\n \r\n480,000.00 \r\n \r\n444,547.00 \r\n \r\n182,828.03 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\nConcession Stand at Rockmart High School; \r\n \r\n274,002.00 \r\n \r\n250,000.00 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\nPurchasing school buses, transportation, and maintenance vehicles and equipment; \r\n \r\nSchool buses; \r\n \r\n889,000.00 \r\n \r\n889,000.00 \r\n \r\n177,800.00 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\nMaintenance Trucks; \r\n \r\n- \r\n \r\n49,461.00 \r\n \r\n49,461.00 \r\n \r\n- \r\n \r\n49,461.00 \r\n \r\n- \r\n \r\nRockmart Middle School field house; \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\nPurchasing vocational, fine arts and cafeteria \r\n \r\nequipment; \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\nPurchasing textbooks; \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\nAcquiring real and personal property necessary \r\n \r\nor to be used for the foregoing purposes; \r\n \r\n301,142.00 \r\n \r\n318,422.00 \r\n \r\n17,280.00 \r\n \r\n301,141.78 \r\n \r\n318,422.00 \r\n \r\n- \r\n \r\nAll other general purposes related to these \r\n \r\ncapital outlay projects; \r\n \r\n925,008.00 \r\n \r\n1,005,453.00 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n2017 bond issuance costs. \r\n \r\n324,609.97 \r\n \r\n325,684.97 \r\n \r\n1,075.00 \r\n \r\n324,609.97 \r\n \r\n- \r\n \r\n- \r\n \r\n25,000,000.00 \r\n \r\n25,001,075.00 \r\n \r\n5,915,238.33 \r\n \r\n1,449,787.20 \r\n \r\n1,660,725.65 \r\n \r\n- \r\n \r\nESTIMATED COMPLETION \r\nDATE \r\n6/30/2021 \r\n6/30/2026 6/30/2021 \r\n6/30/2020 COMPLETE 6/30/2020 6/30/2020 6/30/2020 6/30/2024 COMPLETE \r\nCOMPLETE 6/30/2020 6/30/2026 \r\n \r\nTotal \r\n \r\n$ 25,300,000.00 $ \r\n \r\n25,842,323.64 $ \r\n \r\n6,048,223.27 $ \r\n \r\n2,158,050.90 $ \r\n \r\n1,660,725.65 $ \r\n \r\n- \r\n \r\n(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax. \r\n \r\n(2) The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion. \r\n \r\n(3) The voters of Polk 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. \r\n \r\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: \r\n \r\nPrior Year \r\n \r\n$ \r\n \r\n1,788,845.00 \r\n \r\nCurrent year \r\n \r\n1,190,350.00 \r\n \r\nTotal \r\n \r\n$ \r\n \r\n2,979,195.00 \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 57 - \r\n \r\n (This page left intentionally blank) \r\n \r\n SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS \r\n \r\n (This page left intentionally blank) \r\n \r\n Greg S. Griffin \r\nSTATE AUDITOR \r\n(404) 656-2174 \r\n \r\nDEPARTMENT OF AUDITS AND ACCOUNTS \r\n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \r\n \r\nINDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON \r\nCOMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS \r\n \r\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 \r\nand Superintendent and Members of the Polk County School District \r\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, the business-type activities, each major fund, and the aggregate remaining fund information of the Polk County School District (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 July 26, 2020. \r\nInternal Control Over Financial Reporting \r\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. \r\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. \r\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. \r\n \r\n (This page left intentionally blank) \r\n \r\n Compliance and Other Matters \r\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. \r\nPurpose of this Report \r\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. \r\nRespectfully submitted, \r\n \r\nJuly 26, 2020 \r\n \r\nGreg S. Griffin State Auditor \r\n \r\n (This page left intentionally blank) \r\n \r\n Greg S. Griffin \r\nSTATE AUDITOR \r\n(404) 656-2174 \r\n \r\nDEPARTMENT OF AUDITS AND ACCOUNTS \r\n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \r\n \r\nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE \r\n \r\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 \r\nand Superintendent and Members of the Polk County School District \r\nReport on Compliance for Each Major Federal Program \r\nWe have audited the Polk County School District (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. \r\nManagement's Responsibility \r\nManagement is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. \r\nAuditor's Responsibility \r\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. \r\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. \r\n \r\n (This page left intentionally blank) \r\n \r\n Opinion on Each Major Federal Program \r\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. \r\nReport on Internal Control over Compliance \r\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. \r\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. \r\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. \r\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. \r\nRespectfully submitted, \r\n \r\nJuly 26, 2020 \r\n \r\nGreg S. Griffin State Auditor \r\n \r\n (This page left intentionally blank) \r\n \r\n SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT AUDITEE'S RESPONSE \r\nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2019 \r\nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\nNo matters were reported. \r\nPRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \r\nNo matters were reported. \r\n \r\n (This page left intentionally blank) \r\n \r\n SECTION IV FINDINGS AND QUESTIONED COSTS \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2019 \r\n \r\nI SUMMARY OF AUDITOR'S RESULTS \r\n \r\nFinancial Statements \r\nType of auditor's report issued: Governmental Activities; General Fund; Capital Projects Fund; Debt Service Fund; Aggregate Remaining Fund Information \r\n \r\nInternal control over financial reporting:  Material weakness identified?  Significant deficiency identified? \r\n \r\nNoncompliance material to financial statements noted: Federal Awards \r\n \r\nInternal Control over major programs:  Material weakness identified?  Significant deficiency identified? \r\n \r\nType of auditor's report issued on compliance for major programs: All major programs \r\n \r\nAny audit findings disclosed that are required to be reported in accordance with 2 CFR 200.156(a)? \r\n \r\nIdentification of major programs: \r\n \r\nCFDA Numbers \r\n \r\nName of Federal Program or Cluster \r\n \r\n10.553, 10.555 \r\n \r\nChild Nutrition Cluster \r\n \r\nDollar threshold used to distinguish between Type A and Type B programs: \r\n \r\nAuditee qualified as low-risk auditee? \r\n \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. \r\n \r\nIII FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. \r\n \r\nUnmodified No \r\nNone Reported No \r\nNo None Reported \r\nUnmodified No \r\n$750,000.00 No \r\n \r\n "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-be26-bp7-b2018-belec-p-btext","title":"Polk School District, Cedartown, 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":["2019-07-15"],"dcterms_description":["Annual financial report for the Polk 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":["Polk School District (Ga.)--Appropriations and expenditures--Periodicals.","Education--Georgia--Polk County--Auditing--Periodicals.","Education--Georgia--Polk County--Finance--Statistics--Periodicals.","Georgia Government Documents--Serial"],"dcterms_title":["Polk School District, Cedartown, 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-bp7-b2018-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-be26-bp7-b2018-belec-p-btext"],"dcterms_temporal":null,"dcterms_rights_holder":null,"dcterms_bibliographic_citation":null,"dlg_local_right":null,"dcterms_medium":["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":"POLK SCHOOL DISTRICT CEDARTOWN, GEORGIA \r\nANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED \r\nJUNE 30, 2018 (Including Independent Auditor's Reports) \r\n \r\n POLK COUNTY SCHOOL DISTRICT \r\n \r\n- TABLE OF CONTENTS - \r\n \r\nPage \r\n \r\nSECTION I \r\n \r\nFINANCIAL \r\n \r\nINDEPENDENT AUDITOR'S REPORT \r\n \r\nREQUIRED SUPPLEMENTARY INFORMATION \r\n \r\nMANAGEMENT'S DISCUSSION AND ANALYSIS \r\n \r\ni \r\n \r\nEXHIBITS \r\n \r\nBASIC FINANCIAL STATEMENTS \r\n \r\nGOVERNMENT-WIDE FINANCIAL STATEMENTS \r\n \r\nA \r\n \r\nSTATEMENT OF NET POSITION \r\n \r\n1 \r\n \r\nB \r\n \r\nSTATEMENT OF ACTIVITIES \r\n \r\n2 \r\n \r\nFUND FINANCIAL STATEMENTS \r\n \r\nC \r\n \r\nBALANCE SHEET \r\n \r\nGOVERNMENTAL FUNDS \r\n \r\n4 \r\n \r\nD \r\n \r\nRECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \r\n \r\nTO THE STATEMENT OF NET POSITION \r\n \r\n5 \r\n \r\nE \r\n \r\nSTATEMENT OF REVENUES, EXPENDITURES AND CHANGES \r\n \r\nIN FUND BALANCES \r\n \r\nGOVERNMENTAL FUNDS \r\n \r\n6 \r\n \r\nF \r\n \r\nRECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT \r\n \r\nOF REVENUES, EXPENDITURES AND CHANGES IN FUND \r\n \r\nBALANCES TO THE STATEMENT OF ACTIVITIES \r\n \r\n7 \r\n \r\nG \r\n \r\nSTATEMENT OF FIDUCIARY NET POSITION \r\n \r\nFIDUCIARY FUNDS \r\n \r\n8 \r\n \r\nH \r\n \r\nSTATEMENT OF CHANGES IN FIDUCIARY NET POSITION \r\n \r\nFIDUCIARY FUNDS \r\n \r\n9 \r\n \r\nI NOTES TO THE BASIC FINANCIAL STATEMENTS \r\n \r\n11 \r\n \r\nSCHEDULES \r\n \r\nREQUIRED SUPPLEMENTARY INFORMATION \r\n \r\n1 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY \r\n \r\nTEACHERS RETIREMENT SYSTEM OF GEORGIA \r\n \r\n43 \r\n \r\n2 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY \r\n \r\nEMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \r\n \r\n44 \r\n \r\n3 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY \r\n \r\nPUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA \r\n \r\n45 \r\n \r\n4 SCHEDULE OF PROPORTIONATE SHARE OF THE NET OPEB LIABILITY \r\n \r\nSCHOOL OPEB FUND \r\n \r\n46 \r\n \r\n5 SCHEDULE OF CONTRIBUTIONS  TEACHERS RETIREMENT SYSTEM OF GEORGIA \r\n \r\n47 \r\n \r\n6 SCHEDULE OF CONTRIBUTIONS  EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA 48 \r\n \r\n POLK COUNTY SCHOOL DISTRICT \r\n- TABLE OF CONTENTS - \r\nSECTION I \r\nFINANCIAL \r\nSCHEDULES \r\nREQUIRED SUPPLEMENTARY INFORMATION \r\n7 SCHEDULE OF CONTRIBUTIONS  SCHOOL OPEB FUND 8 SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS  \r\nSOCIAL SECURITY REPLACEMENT PLAN 9 SCHEDULE OF CONTRIBUTIONS  SOCIAL SECURITY REPLACEMENT PLAN 10 SCHEDULE OF INVESTMENT RETURNS  SOCIAL SECURITY REPLACEMENT PLAN 11 NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION 12 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES \r\nIN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND \r\nSUPPLEMENTARY INFORMATION \r\n13 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 14 SCHEDULE OF STATE REVENUE 15 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \r\n \r\nPage \r\n49 50 51 52 53 54 \r\n55 56 57 \r\n \r\nSECTION II \r\nCOMPLIANCE AND INTERNAL CONTROL REPORTS \r\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 \r\nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE \r\n \r\nSECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS \r\n \r\nSECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\n \r\n SECTION I FINANCIAL \r\n \r\n Greg S. Griffin \r\nSTATE AUDITOR \r\n(404) 656-2174 \r\n \r\nDEPARTMENT OF AUDITS AND ACCOUNTS \r\n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \r\nJuly 15, 2019 \r\n \r\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 \r\nand Superintendent and Members of the Polk County School District \r\nINDEPENDENT AUDITOR'S REPORT \r\nReport on the Financial Statements \r\nWe have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Polk County School District (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. \r\nManagement's Responsibility for the Financial Statements \r\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. \r\nAuditor's Responsibility \r\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. \r\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 \r\n \r\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. \r\nWe believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. \r\nOpinions \r\nIn our opinion, the 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, 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. \r\nEmphasis of Matter \r\nAs described in Notes 2 and 16 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 No. 75. Our opinions are not modified with respect to this matter. \r\nOther Matters \r\nRequired Supplementary Information \r\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. \r\nOther Information \r\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. \r\n \r\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. \r\nOther Reporting Required by Government Auditing Standards \r\nIn accordance with Government Auditing Standards, we have also issued our report dated July 15, 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. \r\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. \r\nRespectfully submitted, \r\nGreg S. Griffin State Auditor \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2018 \r\nINTRODUCTION \r\nThe intent of this discussion and analysis is to look at the Polk County School District's (School District) financial performance as a whole. The reader should review the notes to the basic financial statements and the financial statements to enhance their understanding of the School District's financial performance. The School District's financial statements for the fiscal year ended June 30, 2018 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 Position 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. The fund financial statements provide information about all of the School District's funds. \r\nFINANCIAL HIGHLIGHTS \r\nKey financial highlights for fiscal year 2018 are as follows: On the Government-wide financial statements: \r\n Government-wide net position at June 30, 2018 was approximately ($21.0) million. Net position reflects the difference between all assets of the School District (including capital assets, net of depreciation), deferred outflows and all liabilities, both shortterm and long-term and deferred inflows. The net position at June 30, 2018 of ( $21.0) million represented a decrease of approximately $54.7 million when compared to the prior year. This large decrease is due to the application of unfunded liabilities from the Georgia School Employees Postemployment Benefit Fund (OPEB) which were booked according to GASB Statement No. 75. \r\n The School District had $78.5 million in expenses relating to governmental activities; only $55.3 million of these expenses were offset by program specific charges for services, operating and capital grants and contributions. However, the general revenues (primarily property and sales taxes) of approximately $27.5 provided additional funding of these expenses. \r\n As stated above, general revenues accounted for $27.5 million or about 33% of all revenues totaling approximately $82.8 million. Program specific revenues in the form of charges for services, operating and capital grants, and contributions accounted for the balance of these revenues. \r\ni \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2018 \r\n0n the fund financial statements: \r\n Among major funds, the general fund had approximately $77.6 million in revenues and $74.9 million in expenditures. The general fund balance of approximately $14.5 million at June 30, 2018 increased by approximately $2.7 million from the prior year. \r\nOVERVIEW OF THE FINANCIAL STATEMENTS \r\nThis annual report consists of three parts; management's discussion and analysis (this section), the basic financial statements, including notes to the 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. \r\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 School District's overall financial status. \r\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 School District, the general fund, capital projects fund, and debt service fund are all considered to be major funds. The School District has no non-major funds as defined by GASB Statement No. 34 for purposes of this report. \r\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. \r\nGovernment-Wide Statements \r\nSince the School District has no operations that have been classified as \"Business Activities\", the government-wide financial statements are basically a consolidation of the entire School District's operating funds into one column called governmental activities. In reviewing the government-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 School District's assets, deferred outflows, liabilities, and deferred inflows 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. \r\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. \r\nii \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2018 \r\nWhen analyzing government-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: \r\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 \r\nthe accrual basis of accounting  Allocate net position as follows: \r\no Net Investment in Capital Assets o Restricted net position is that with constraints placed on the use by external sources \r\nsuch as creditors, grantors, contributors or laws and regulations. o Unrestricted net position is net position that does not meet any of the above \r\nrestrictions. \r\nFund Financial Statements \r\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 non-major funds as defined by generally accepted accounting principles. \r\nThe School District has two kinds of funds as discussed below: \r\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. \r\nFiduciary Funds  The School District is the trustee, or fiduciary, for assets that belong to clubs, organizations and others within the principals' accounts as well as an employer sponsored pension plan. 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 government-wide financial statements because it cannot use these assets to finance its operations. \r\nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT AS A WHOLE \r\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 School 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 \r\niii \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2018 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 non-financial factors should be considered in assessing the overall health of the School District. The School District had approximately $77.9 million (net of related debt) investment 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 position, it must be recognized that this portion of the net position is not available for future spending. The deficit balance of unrestricted net position of approximately $107.6 million reflects the net pension liability adjustments as required by GASB Statement No. 68 and GASB Statement No. 71 and the OPEB liability adjustments as required by GASB Statement No. 75. \r\niv \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2018 \r\nTable 1 provides a summary of the School District's net position for this fiscal year as compared to the prior fiscal year. \r\nTable 1 Net Position \r\n \r\nGovernmental Activities \r\n \r\nFiscal \r\n \r\nFiscal \r\n \r\nYear 2018 \r\n \r\nYear 2017 (1) \r\n \r\nAssets Current and Other Assets Capital Assets, Net \r\n \r\n$ 44,110,997 $ 21,167,711 \r\n \r\n93,175,242 \r\n \r\n94,623,642 \r\n \r\nTotal Assets \r\n \r\n137,286,239 \r\n \r\n115,791,353 \r\n \r\nDeferred Outflows of Resources Related to Defined Benefit Pension Plans Related to OPEB Plan \r\n \r\n10,928,135 2,073,869 \r\n \r\n18,037,523 - \r\n \r\nTotal Deferred Outflows \r\n \r\n13,002,004 \r\n \r\n18,037,523 \r\n \r\nLiabilities Current and Other Liabilities Long-Term Liabilities Related to Defined Benefit Pension Plans Related to OPEB Plan \r\n \r\n9,172,033 30,908,568 65,692,138 56,608,834 \r\n \r\n9,858,661 13,583,077 74,557,748 \r\n- \r\n \r\nTotal Liabilities \r\n \r\n162,381,573 \r\n \r\n97,999,486 \r\n \r\nDeferred Inflows of Resources Related to Defined Benefit Pension Plans Related to OPEB Plan \r\n \r\n3,592,143 5,511,083 \r\n \r\n2,324,989 - \r\n \r\nTotal Deferred Inflows \r\n \r\n9,103,226 \r\n \r\n2,324,989 \r\n \r\nNet Position Net Investment in Capital Assets Restricted Unrestricted (Deficit) \r\n \r\n77,940,543 8,426,304 \r\n(107,563,403) \r\n \r\n82,970,370 5,413,763 \r\n(54,879,732) \r\n \r\nTotal Net Position \r\n \r\n$ (21,196,556) $ 33,504,401 \r\n \r\n(1) Fiscal year 2017 balances do not reflect the effects of the Restatement of Net Position See Note 16 in the Notes to the Basic Financial Statements for additional information. \r\nv \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2018 \r\n \r\nTotal net position decreased by approximately $54.7 million in fiscal year 2018 from the prior year. This change in net position is detailed in Table 2 below. Table 2 also shows the change in net position as compared to the prior fiscal year. \r\n \r\nTable 2 Change in Net Position \r\n \r\nRevenues Program Revenues: Charges for Services Operating Grants and Contributions Capital Grants and Contributions \r\nTotal Program Revenues \r\nGeneral Revenues: Taxes Property Taxes For Maintenance and Operations Other Taxes Sales Taxes Special Purpose Local Option Sales Tax For Debt Services Other Sales Tax Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous \r\nTotal General Revenues \r\nTotal Revenues \r\nProgram Expenses: Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Operations of Non-Instructional Services Enterprise Operations Food Services Interest on Short-Term and Long-Term Debt \r\nTotal Expenses \r\nIncrease in Net Position \r\n \r\nGovernmental Activities \r\n \r\nFiscal \r\n \r\nFiscal \r\n \r\nYear 2018 \r\n \r\nYear 2017 (1) \r\n \r\n$ 2,108,405 52,905,464 266,172 \r\n \r\n$ 1,933,202 50,797,359 4,854,900 \r\n \r\n55,280,041 \r\n \r\n57,585,461 \r\n \r\n15,131,983 57,428 \r\n \r\n14,895,360 47,208 \r\n \r\n4,956,567 187,275 \r\n5,881,018 215,949 \r\n1,103,893 \r\n27,534,113 \r\n82,814,154 \r\n \r\n4,541,511 199,085 \r\n5,395,178 76,954 \r\n1,547,477 \r\n26,702,773 \r\n84,288,234 \r\n \r\n51,661,989 \r\n \r\n51,564,126 \r\n \r\n1,968,677 1,195,106 1,014,728 \r\n966,502 4,168,928 1,127,549 6,325,474 2,943,596 \r\n208,824 68,009 \r\n \r\n1,884,730 1,788,094 \r\n949,010 1,077,244 4,134,698 \r\n766,476 5,325,527 2,869,206 \r\n192,011 193,873 \r\n \r\n2,060,268 4,400,030 \r\n377,306 \r\n \r\n1,804,538 4,356,241 \r\n265,776 \r\n \r\n78,486,986 \r\n \r\n77,171,550 \r\n \r\n$ 4,327,168 $ 7,116,684 \r\n \r\n(1) Fiscal year 2017 balances do not reflect the effects of the Restatement of Net Position. See Note 16 in the Notes to the Basic Financial Statements for additional information. \r\nvi \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2018 \r\nCost of Providing Services \r\n \r\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. \r\nTable 3 Governmental Activities \r\n \r\nTotal Cost of Services \r\n \r\nFiscal \r\n \r\nFiscal \r\n \r\nYear 2018 \r\n \r\nYear 2017(1) \r\n \r\nNet Cost of Services \r\n \r\nFiscal \r\n \r\nFiscal \r\n \r\nYear 2018 \r\n \r\nYear 2017(1) \r\n \r\nInstruction Support Services: \r\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 \r\n \r\n$ 51,661,989 $ 51,564,126 $ 12,968,038 $ 10,446,203 \r\n \r\n1,968,677 1,195,106 1,014,728 \r\n966,502 4,168,928 1,127,549 6,325,474 2,943,596 \r\n208,824 68,009 \r\n \r\n1,884,730 1,788,094 \r\n949,010 1,077,244 4,134,698 \r\n766,476 5,325,527 2,869,206 \r\n192,011 193,873 \r\n \r\n1,055,754 577,080 (5,972) (394,155) \r\n2,085,862 1,118,681 3,887,914 1,806,434 \r\n206,644 59,195 \r\n \r\n1,092,955 604,154 (31,099) (143,947) \r\n2,118,844 757,735 \r\n2,908,111 1,880,768 \r\n189,792 146,015 \r\n \r\n2,060,268 4,400,030 \r\n377,306 \r\n \r\n1,804,538 4,356,241 \r\n265,776 \r\n \r\n6,696 (542,532) 377,306 \r\n \r\n1,230 (650,448) 265,776 \r\n \r\nTotal Expenses \r\n \r\n$ 78,486,986 $ 77,171,550 $ 23,206,945 $ 19,586,089 \r\n \r\n(1) Fiscal year 2017 balances do not reflect the effects of the Restatement of Net Position. See Note 16 in the Notes to the Basic Financial Statements for additional information. \r\nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT'S FUNDS \r\n \r\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 and other financing sources of $105.3 million and total expenditures and other financial uses of $81.2 million in fiscal year 2018. Total governmental fund balances of approximately $34.1 million at June 30, 2018, increased approximately $24.0 million from the prior year due to a new bond Issuance during the course of fiscal year 2018. \r\n \r\nGeneral Fund Budget Highlights \r\n \r\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 2018, the School District amended its general fund budget as needed. \r\nvii \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2018 \r\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. \r\nFor the general fund, the final actual revenues of $77.6 million were greater than the final budgeted amount of $68.7 million by approximately $8.9 million. This can be primarily attributed to receiving more property taxes, state funds, federal funds, charges for services and miscellaneous income than originally expected. \r\nThe general fund's final actual expenditures of $74.9 million were less than the final budget amount of $76.3 million by approximately $1.4 million. The School District believes it effectively managed its budget during the fiscal year. \r\nCAPITAL ASSETS AND DEBT ADMINISTRATION \r\nCapital Assets \r\nAt fiscal year ended June 30, 2018, the School District had $93.2 million invested in capital assets, net of accumulated depreciation, all in governmental activities. These assets are made up of a broad range of items including buildings; land; land improvements; and food service, transportation and maintenance equipment. Table 4 reflects a summary of these balances, net of accumulated depreciation, as compared to the prior fiscal year. \r\nTable 4 Capital Assets (Net of Depreciation) \r\n \r\nGovernmental Activities \r\n \r\nFiscal \r\n \r\nFiscal \r\n \r\nYear 2018 \r\n \r\nYear 2017 \r\n \r\nLand Construction In Progress Building and Improvements Equipment Land Improvements \r\n \r\n$ 2,284,296 431,066 \r\n88,441,008 751,735 \r\n1,267,137 \r\n \r\n$ 2,275,175 13,402,571 76,848,636 772,852 1,324,408 \r\n \r\nTotal \r\n \r\n$ 93,175,242 $ 94,623,642 \r\n \r\nAdditional information about the School District's capital assets can be found in the Notes to the Basic Financial Statements. \r\n \r\nviii \r\n \r\n Debt Administration \r\n \r\nPOLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2018 \r\n \r\nAt June 30, 2018, the School District had $27.7 million in bonds outstanding with $2.5 million due within one year. \r\nTable 5 Debt at June 30 \r\n \r\nGovernmental Activities \r\n \r\nFiscal \r\n \r\nFiscal \r\n \r\nYear 2018 \r\n \r\nYear 2017 \r\n \r\nBond Debt Capital Leases \r\n \r\n$ 25,690,000 $ 12,090,000 \r\n \r\n- \r\n \r\n418,022 \r\n \r\nTotal \r\n \r\n$ 25,690,000 $ 12,508,022 \r\n \r\nNet Pension Liabilities \r\nAt June 30, 2018 the School District reported liabilities for its proportionate share of the net pension and OPEB liabilities. Reporting these liabilities were required by GASB No. 68, GASB No. 71 and GASB No. 75. \r\n \r\nFACTORS BEARING ON THE DISTRICT'S FUTURE \r\nCurrently known circumstances that are expected to have a significant effect on financial position or results of operations in future years are as follows: \r\n The School District is financially stable. The School District's operating millage for fiscal year 2017 and 2018 was 16.151. \r\n The general fund had a fund balance as of June 30, 2018 of $14.5 million, which is up $2.7 million from prior year. In fiscal year 2018, $3,720,659.89 was loaned from the general fund to the capital projects fund to complete the construction of the Polk County College and Career Academy. The inter-fund loan will be paid back in future years with excess Special Purpose Local Option Sales Tax (SPLOST) proceeds. \r\n The School District is financially challenged by the State's continuing reduction of state revenue appropriations to local school districts. However, the School District is scheduled to receive a $2,906,620.00 increase of state revenue for fiscal year 2019. In fiscal year 2018, bonds were sold at a premium of $2,466,365.75. \r\n The School District student population increased from 7582 in fiscal year 2017 to 7663 in fiscal year 2018. The School District will continue to renovate the existing facilities to accommodate any growth as needed. The School District plans to fund additional capital outlays with the one percent local sales tax revenue, general obligation bonds and state capital outlay grant. A fine arts building will be constructed at Cedartown High School. An agricultural building will be constructed on the Rockmart High Campus. Technology upgrades will also be made. Also, additions and modifications will be done as needed. \r\n \r\nix \r\n \r\n POLK COUNTY SCHOOL DISTRICT 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 Mrs. Tammy McDonald, Director of Finance, Polk County School District, 612 South College Street, Cedartown, Georgia 30125. You may also email your questions to Mrs. McDonald at tammy@polk.k12.ga.us. \r\nx \r\n \r\n POLK COUNTY SCHOOL DISTRICT \r\n \r\n POLK COUNTY SCHOOL DISTRICT STATEMENT OF NET POSITION JUNE 30, 2018 \r\nASSETS \r\nCash and Cash Equivalents Investments Receivables, Net \r\nTaxes State Government Federal Government Other Inventories Restricted Assets Investments with Fiscal Agent or Trustee Capital Assets, Non-Depreciable Capital Assets, Depreciable (Net of Accumulated Depreciation) \r\nTotal Assets \r\nDEFERRED OUTFLOWS OF RESOURCES \r\nRelated to Defined Benefit Pension Plans Related to OPEB Plan \r\nTotal Deferred Outflows of Resources \r\nLIABILITIES \r\nAccounts Payable Salaries and Benefits Payable Interest Payable Contracts Payable Retainages Payable Net Pension Liability Net OPEB Liability Long-Term Liabilities \r\nDue Within One Year Due in More Than One Year \r\nTotal Liabilities \r\nDEFERRED INFLOWS OF RESOURCES \r\nRelated to Defined Benefit Pension Plans Related to OPEB Plan \r\nTotal Deferred Inflows of Resources \r\nNET POSITION \r\nNet Investment in Capital Assets Restricted for \r\nContinuation of Federal Programs Debt Service Capital Projects Continuation of State Programs Unrestricted (Deficit) \r\nTotal Net Position \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\nEXHIBIT \"A\" \r\n \r\nGOVERNMENTAL ACTIVITIES \r\n \r\n$ \r\n \r\n32,834,117.06 \r\n \r\n10,770.38 \r\n \r\n2,179,700.20 6,202,330.30 1,108,803.85 \r\n15,691.24 55,148.73 \r\n \r\n1,704,435.00 2,715,362.32 90,459,879.63 \r\n \r\n137,286,238.71 \r\n \r\n10,928,135.06 2,073,869.00 \r\n13,002,004.06 \r\n \r\n16,982.71 8,546,035.86 \r\n367,025.00 201,037.57 \r\n40,951.63 65,692,138.00 56,608,834.00 \r\n3,028,380.41 27,880,188.01 \r\n162,381,573.19 \r\n \r\n3,592,143.00 5,511,083.00 \r\n9,103,226.00 \r\n \r\n77,940,543.23 \r\n1,937,048.05 6,363,450.98 \r\n125,192.45 612.08 \r\n(107,563,403.21) \r\n \r\n$ \r\n \r\n(21,196,556.42) \r\n \r\n- 1 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT STATEMENT OF ACTIVITIES \r\nFOR THE YEAR ENDED JUNE 30, 2018 \r\n \r\nGOVERNMENTAL ACTIVITIES \r\nInstruction Support Services \r\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 \r\nTotal Governmental Activities \r\nGeneral Revenues Taxes Property Taxes For Maintenance and Operations Other Taxes 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 \r\nTotal General Revenues \r\nChange in Net Position \r\nNet Position - Beginning of Year - Restated \r\n \r\nEXPENSES \r\n \r\nCHARGES FOR SERVICES \r\n \r\nPROGRAM REVENUE \r\n \r\n$ \r\n \r\n51,661,989.43 $ \r\n \r\n1,968,676.94 1,195,106.33 1,014,727.84 \r\n966,501.73 4,168,927.95 1,127,549.48 6,325,473.83 2,943,595.66 \r\n208,823.80 68,009.51 \r\n \r\n2,060,267.58 4,400,029.94 \r\n377,306.32 \r\n \r\n$ \r\n \r\n78,486,986.34 $ \r\n \r\n8,611.75 \r\n- \r\n2,053,570.78 46,222.56 - \r\n2,108,405.09 \r\n \r\nNet Position - End of Year \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 2 - \r\n \r\n EXHIBIT \"B\" \r\n \r\nPROGRAM REVENUES OPERATING GRANTS AND \r\nCONTRIBUTIONS \r\n \r\nCAPITAL GRANTS AND CONTRIBUTIONS \r\n \r\nNET (EXPENSES) REVENUES \r\nAND CHANGES IN NET POSITION \r\n \r\n$ 38,575,748.82 $ \r\n912,922.94 618,026.16 1,020,699.57 1,360,657.04 2,083,065.59 \r\n8,868.75 2,437,560.28 \r\n982,626.13 2,180.17 8,011.90 \r\n4,895,096.59 \r\n- \r\n$ 52,905,463.94 $ \r\n \r\n109,590.74 $ \r\n154,535.83 802.82 \r\n1,243.04 \r\n- \r\n266,172.43 \r\n \r\n(12,968,038.12) \r\n(1,055,754.00) (577,080.17) 5,971.73 394,155.31 \r\n(2,085,862.36) (1,118,680.73) (3,887,913.55) (1,806,433.70) \r\n(206,643.63) (59,194.79) \r\n(6,696.80) 542,532.25 (377,306.32) \r\n(23,206,944.88) \r\n \r\n15,131,983.37 57,427.74 \r\n4,956,566.64 187,275.10 \r\n5,881,018.00 215,948.95 \r\n1,103,893.30 \r\n27,534,113.10 \r\n4,327,168.22 \r\n(25,523,724.64) \r\n \r\n$ \r\n \r\n(21,196,556.42) \r\n \r\n- 3 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT BALANCE SHEET \r\nGOVERNMENTAL FUNDS JUNE 30, 2018 \r\n \r\nEXHIBIT \"C\" \r\n \r\nASSETS \r\nCash and Cash Equivalents Investments Receivables, Net \r\nTaxes State Government Federal Government Other Due from Other Funds Inventories Restricted Investments with a Fiscal Agent or Trustee \r\n \r\nGENERAL FUND \r\n \r\nCAPITAL PROJECTS \r\nFUND \r\n \r\nDEBT SERVICE \r\nFUND \r\n \r\nTOTAL \r\n \r\n$ 11,393,410.92 $ 16,866,763.18 $ \r\n \r\n10,770.38 \r\n \r\n- \r\n \r\n1,727,602.18 \r\n \r\n- \r\n \r\n6,202,330.30 \r\n \r\n- \r\n \r\n1,108,803.85 \r\n \r\n- \r\n \r\n15,691.24 \r\n \r\n- \r\n \r\n3,720,659.89 \r\n \r\n- \r\n \r\n55,148.73 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n4,573,942.96 $ - \r\n \r\n32,834,117.06 10,770.38 \r\n \r\n452,098.02 - \r\n \r\n2,179,700.20 6,202,330.30 1,108,803.85 \r\n15,691.24 3,720,659.89 \r\n55,148.73 \r\n \r\n1,704,435.00 \r\n \r\n1,704,435.00 \r\n \r\nTotal Assets \r\nLIABILITIES \r\nAccounts Payable Salaries and Benefits Payable Due to Other Funds Contracts Payable Retainages Payable \r\nTotal Liabilities \r\nDEFERRED INFLOWS OF RESOURCES \r\nUnavailable Revenue - Property Taxes \r\nFUND BALANCES \r\nNonspendable Restricted Assigned Unassigned \r\nTotal Fund Balances \r\n \r\n$ 24,234,417.49 $ 16,866,763.18 $ 6,730,475.98 $ 47,831,656.65 \r\n \r\n$ \r\n \r\n15,777.01 $ \r\n \r\n1,205.70 $ \r\n \r\n8,546,035.86 \r\n \r\n- \r\n \r\n- \r\n \r\n3,720,659.89 \r\n \r\n- \r\n \r\n201,037.57 \r\n \r\n- \r\n \r\n40,951.63 \r\n \r\n8,561,812.87 \r\n \r\n3,963,854.79 \r\n \r\n- $ - \r\n \r\n16,982.71 8,546,035.86 3,720,659.89 \r\n201,037.57 40,951.63 \r\n \r\n- \r\n \r\n12,525,667.66 \r\n \r\n1,194,435.49 \r\n \r\n- \r\n \r\n- \r\n \r\n1,194,435.49 \r\n \r\n55,148.73 1,882,511.40 \r\n605,331.21 11,935,177.79 \r\n14,478,169.13 \r\n \r\n12,902,908.39 \r\n- \r\n12,902,908.39 \r\n \r\n6,730,475.98 \r\n- \r\n6,730,475.98 \r\n \r\n55,148.73 21,515,895.77 \r\n605,331.21 11,935,177.79 \r\n34,111,553.50 \r\n \r\nTotal Liabilities, Deferred Inflows of Resources, and Fund Balances \r\n \r\n$ 24,234,417.49 $ 16,866,763.18 $ 6,730,475.98 $ 47,831,656.65 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 4 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \r\nTO THE STATEMENT OF NET POSITION JUNE 30, 2018 \r\n \r\nEXHIBIT \"D\" \r\n \r\nTotal fund balances - governmental funds (Exhibit \"C\") \r\nAmounts reported for governmental activities in the Statement of Net Position are different because: \r\nCapital assets used in governmental activities are not financial resources and therefore are not reported in the funds. \r\nLand Construction in progress Buildings and improvements Equipment Land improvements Accumulated depreciation \r\nSome liabilities are not due and payable in the current period and, therefore, are not reported in the funds. \r\nNet pension liability Net OPEB liability \r\nDeferred outflows and inflows of resources related to pensions/OPEB are applicable to future periods and, therefore, are not reported in the funds. \r\nRelated to pensions Related to OPEB \r\nTaxes that are not available to pay for current period expenditures are deferred in the funds. \r\nLong-term liabilities, and related accrued interest, are not due and payable in the current period and therefore are not reported in the funds. \r\nBonds payable Accrued interest payable Compensated absences payable Unamortized bond premiums \r\n \r\n$ \r\n \r\n34,111,553.50 \r\n \r\n$ \r\n \r\n2,284,296.10 \r\n \r\n431,066.22 \r\n \r\n115,040,542.71 \r\n \r\n4,965,534.70 \r\n \r\n2,594,719.05 \r\n \r\n(32,140,916.83) \r\n \r\n93,175,241.95 \r\n \r\n$ (65,692,138.00) (56,608,834.00) \r\n \r\n(122,300,972.00) \r\n \r\n$ \r\n \r\n7,335,992.06 \r\n \r\n(3,437,214.00) \r\n \r\n3,898,778.06 1,194,435.49 \r\n \r\n$ (27,690,000.00) (367,025.00) (164,713.84) \r\n(3,053,854.58) \r\n \r\n(31,275,593.42) \r\n \r\nNet position of governmental activities (Exhibit \"A\") \r\n \r\n$ (21,196,556.42) \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 5 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES \r\nGOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2018 \r\n \r\nEXHIBIT \"E\" \r\n \r\nREVENUES \r\nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous \r\nTotal Revenues \r\nEXPENDITURES \r\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 \r\nCapital Outlay Debt Services \r\nPrincipal Dues and Fees Interest \r\nTotal Expenditures \r\nRevenues over (under) Expenditures \r\nOTHER FINANCING SOURCES (USES) \r\nProceeds of Bonds Premiums on Bonds Sold Transfers In Transfers Out \r\nTotal Other Financing Sources (Uses) \r\nNet Change in Fund Balances \r\nFund Balances - Beginning \r\n \r\nGENERAL FUND \r\n \r\nCAPITAL PROJECTS \r\nFUND \r\n \r\nDEBT SERVICE \r\nFUND \r\n \r\nTOTAL \r\n \r\n$ 15,330,250.99 $ 187,275.10 \r\n49,444,551.75 9,445,892.96 2,108,405.09 14,727.36 1,103,893.30 \r\n77,634,996.55 \r\n \r\n- $ 111,636.60 98,781.52 - \r\n210,418.12 \r\n \r\n- $ 4,956,566.64 \r\n102,440.07 - \r\n5,059,006.71 \r\n \r\n15,330,250.99 5,143,841.74 \r\n49,556,188.35 9,445,892.96 2,108,405.09 215,948.95 1,103,893.30 \r\n82,904,421.38 \r\n \r\n48,863,592.85 \r\n1,967,913.03 1,189,233.21 1,011,428.62 \r\n896,295.48 4,154,704.52 \r\n779,112.93 6,045,985.71 2,825,569.31 \r\n191,526.04 50,017.88 \r\n2,060,267.58 4,597,770.24 \r\n- \r\n299,180.64 - \r\n1,243.25 \r\n74,933,841.29 \r\n2,701,155.26 \r\n \r\n117,026.49 \r\n341,094.08 235,479.38 738,849.09 \r\n118,841.78 1,806.25 1,069.58 \r\n1,554,166.65 \r\n(1,343,748.53) \r\n \r\n- \r\n3,675.00 - \r\n2,450,000.00 - \r\n455,100.00 \r\n2,908,775.00 \r\n2,150,231.71 \r\n \r\n48,980,619.34 \r\n1,967,913.03 1,189,233.21 1,011,428.62 \r\n899,970.48 4,154,704.52 1,120,207.01 6,281,465.09 2,825,569.31 \r\n191,526.04 50,017.88 \r\n2,060,267.58 4,597,770.24 \r\n738,849.09 \r\n2,868,022.42 1,806.25 \r\n457,412.83 \r\n79,396,782.94 \r\n3,507,638.44 \r\n \r\n- \r\n- \r\n2,701,155.26 \r\n11,777,013.87 \r\n \r\n15,550,250.00 2,466,365.75 1,833,787.67 - \r\n19,850,403.42 \r\n18,506,654.89 \r\n(5,603,746.50) \r\n \r\n2,499,750.00 - \r\n1,833,787.61 - \r\n665,962.33 \r\n2,816,194.04 \r\n3,914,281.94 \r\n \r\n18,050,000.00 2,466,365.75 1,833,787.67 (1,833,787.67) \r\n20,516,365.75 \r\n24,024,004.19 \r\n10,087,549.31 \r\n \r\nFund Balances - Ending \r\n \r\n$ 14,478,169.13 $ 12,902,908.39 $ 6,730,475.98 $ 34,111,553.50 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 6 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF \r\nREVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2018 \r\n \r\nEXHIBIT \"F\" \r\n \r\nNet change in fund balances total governmental funds (Exhibit \"E\") \r\nAmounts reported for governmental activities in the Statement of Activities are different because: \r\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. \r\nCapital outlay Depreciation expense \r\nTaxes reported in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. \r\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. \r\nGeneral obligation bonds issued, including a premium of $2,466,365.75 Amortization of bonds premium Bond principal retirements Capital lease payments \r\nDistrict pension contributions are reported as expenditures in the governmental funds when made. However, they are reported as deferred outflows of resources in the Statement of Net Position because the reported net pension/OPEB liability is measured a year before the District's report date. Pension/OPEB expense, which is the change in the net pension/OPEB liability adjusted for changes in deferred outflows and inflows of resources related to pensions/OPEB, is reported in the Statement of Activities. \r\nPension expense OPEB expense \r\nSome items reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. \r\nAccrued interest on issuance of bonds Compensated absences \r\n \r\n$ 24,024,004.19 \r\n \r\n$ \r\n \r\n946,329.19 \r\n \r\n(2,394,729.26) \r\n \r\n(1,448,400.07) (140,839.88) \r\n \r\n$ (20,516,365.75) 332,849.93 \r\n2,450,000.00 418,022.42 \r\n \r\n(17,315,493.40) \r\n \r\n$ \r\n \r\n489,067.70 \r\n \r\n(1,017,922.00) \r\n \r\n(528,854.30) \r\n \r\n$ \r\n \r\n(253,250.00) \r\n \r\n(9,998.32) \r\n \r\n(263,248.32) \r\n \r\nChange in net position of governmental activities (Exhibit \"B\") \r\n \r\n$ \r\n \r\n4,327,168.22 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 7 - \r\n \r\n ASSETS Cash and Cash Equivalents Investments \r\nTotal Assets LIABILITIES Due to Broker Funds Held for Others NET POSITION Employee's Pension Benefits Held in Trust for Private Purposes \r\n \r\nPOLK COUNTY SCHOOL DISTRICT STATEMENT OF FIDUCIARY NET POSITION \r\nFIDUCIARY FUNDS JUNE 30, 2018 \r\n \r\nEXHIBIT \"G\" \r\n \r\nPRIVATE PURPOSE TRUSTS \r\n \r\nAGENCY FUNDS \r\n \r\nPENSION TRUST FUND \r\nDecember 31, 2017 \r\n \r\n$ \r\n \r\n9,799.72 $ 108,804.13 $ \r\n \r\n- \r\n \r\n- \r\n \r\n401,853.00 3,747,365.00 \r\n \r\n$ \r\n \r\n9,799.72 $ 108,804.13 $ \r\n \r\n4,149,218.00 \r\n \r\n$ \r\n \r\n- $ \r\n \r\n$ 108,804.13 \r\n \r\n3,254.00 - \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n9,799.72 \r\n \r\n$ \r\n \r\n4,145,964.00 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 8 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT STATEMENT OF CHANGES IN FIDUCIARY NET POSITION \r\nFIDUCIARY FUNDS YEAR ENDED JUNE 30, 2018 \r\n \r\nEXHIBIT \"H\" \r\n \r\nADDITIONS Contributions Employer Contributions Investment Earnings Net Increase in Fair Value of Investments Other Additions Total Additions \r\nDEDUCTIONS Administrative Expenses Benefits Paid to Participants Total Deductions Change in Net Position \r\nNet Position - Beginning \r\n \r\nPRIVATE PURPOSE TRUSTS \r\n \r\nPENSION TRUST FUND \r\nDecember 31, 2017 \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n1,700.00 1,700.00 \r\n \r\n335,798.00 \r\n391,375.00 - \r\n727,173.00 \r\n \r\n1,611.00 1,611.00 \r\n89.00 9,710.72 \r\n \r\n22,530.00 332,304.00 354,834.00 372,339.00 3,773,625.00 \r\n \r\nNet Position - Ending \r\n \r\n$ \r\n \r\n9,799.72 \r\n \r\n4,145,964.00 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 9 - \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY \r\nREPORTING ENTITY \r\nThe Polk County School District (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. \r\nNOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES \r\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. \r\nBASIS OF PRESENTATION \r\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. \r\nGOVERNMENT-WIDE STATEMENTS: \r\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. \r\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: \r\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. \r\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. \r\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. \r\nThe Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities. \r\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. \r\n \r\n- 11 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\nFUND FINANCIAL STATEMENTS \r\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. \r\nThe School District reports the following major governmental funds: \r\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. \r\n The capital projects fund accounts for and reports financial resources including Education \r\nSpecial Purpose Local Option Sales Tax (ESPLOST), Bond Proceeds and grants from Georgia State Financing and Investment Commission that are restricted, committed or assigned for capital outlay expenditures, including the acquisition or construction of capital facilities and other capital assets. \r\n The debt service fund accounts for and reports financial resources that are restricted, committed, or assigned including taxes (property and sales) legally restricted for the payment of general long-term principal and interest. \r\nThe School District reports the following fiduciary fund types: \r\n Private purpose trust funds are used to report all trust arrangements, other than those properly reported elsewhere, in which principal and income benefit individuals, private organizations or other governments. \r\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. \r\n Pension trust fund accounts for the activities of Polk County School District Social Security \r\nReplacement Plan, a single employer defined benefit pension plan for the group of employees covered by the Public School Employees Retirement System (PSERS). \r\nBASIS OF ACCOUNTING \r\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. \r\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. \r\n \r\n- 12 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\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 and compensated absences, 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. \r\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 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. \r\nNEW ACCOUNTING PRONOUNCEMENTS \r\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. \r\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. \r\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. \r\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 \r\n- 13 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\nreporting 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. \r\nFISCAL YEAR END \r\nAll funds are reported using fiscal years which end on June 30, except the defined benefit pension plan (fiduciary fund), which has a fiscal year ending December 31. \r\nCASH AND CASH EQUIVALENTS \r\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. \r\nINVESTMENTS \r\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. \r\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. \r\nFor accounting purposes, certificates of deposit are classified as investments if they have an original maturity greater than three months when acquired. \r\nRECEIVABLES \r\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. \r\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. \r\nINVENTORIES \r\nFood Inventories \r\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 food 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. \r\nRESTRICTED ASSETS \r\nCertain resources set aside for repayment of debt are classified as restricted assets on the Statement of Net Position because their use is limited by applicable debt statutes, e.g. Qualified Zone Academy Bond sinking funds. \r\n \r\n- 14 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\nCAPITAL ASSETS \r\n \r\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. \r\n \r\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. \r\n \r\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. \r\n \r\nCapitalization thresholds and estimated useful lives of capital assets reported in the government-wide statements are as follows: \r\n \r\nCapitalization Policy \r\n \r\nEstimated Useful Life \r\n \r\nLand Land Improvements Buildings and Improvements Equipment Intangible Assets \r\n \r\nAll $ 50,000.00 $ 50,000.00 $ 50,000.00 $ 50,000.00 \r\n \r\nN/A 20 to 60 years 25 to 60 years \r\n5 to 50 years 10 to 20 years \r\n \r\nDEFERRED OUTFLOWS/INFLOWS OF RESOURCES \r\n \r\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. \r\n \r\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. \r\nCOMPENSATED ABSENCES \r\n \r\nCompensated absences payable consists of vacation leave employees earned based on services already rendered. \r\n \r\nVacation leave of 10 days is awarded annually to all full time personnel employed on a twelve month basis with less than 15 years of experience and 15 days annually to all full time personnel employed on a twelve month basis with between 15 and 40 years of experience. Twelve month employees with 40 or more years of services to the School District are eligible for 5 additional vacation days annually. No other employees are eligible to earn vacation leave. \r\n \r\nFor twelve-month employees with 15 or more years of experience, all unused vacation days may be carried forward into the next employment year up to and including June 30. This is a maximum of 15 days earned from previous year. Upon expiration of this limit, a maximum of 5 unused vacation days may be carried forward. Therefore, this employee could have a maximum of 20 days of acquired vacation at the start of a new fiscal year. \r\n \r\n- 15 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\nFor twelve-month employees with less than 15 years of experience, all unused vacation days may be carried forward into the next employment year up to and including June 30. This is a maximum of 10 days earned from previous year. Upon expiration of this limit, a maximum of 5 unused vacation days may be carried forward. Therefore, this employee could have a maximum of 15 days of acquired vacation at the start of a new fiscal year. \r\nUpon terminating employment, the School District pays all unused and unforfeited vacation benefits to employees. Accordingly, vacation benefits are accrued as a liability in the government-wide financial statements. A liability for these amounts is reported in the governmental fund financial statements only if they have matured, for example, as a result of employee resignations and retirements by fiscalyear end. \r\nMembers of the Teachers Retirement System of Georgia (TRS) may apply unused sick leave toward early retirement. The liability for early retirement will be borne by TRS rather than by the individual School Districts. Otherwise, sick leave does not vest with the employee, and no liability is reported in the School District's financial statements. \r\nLONG-TERM LIABILITIES AND BOND DISCOUNTS/PREMIUMS \r\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. \r\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. \r\nPENSIONS \r\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. \r\nPOSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS (OPEB) \r\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. \r\nFUND BALANCES \r\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. \r\nThe School District's fund balances are classified as follows: \r\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. \r\n \r\n- 16 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\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. \r\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. \r\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. \r\nUSE OF ESTIMATES \r\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. \r\nPROPERTY TAXES \r\nThe Polk County Board of Commissioners adopted the property tax levy for the 2017 tax digest year (calendar year) on September 7, 2017 (levy date) based on property values as of January 1, 2017. Taxes were due on December 1, 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 Polk 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 $13,995,154.93. \r\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): \r\n \r\nSchool Operations \r\n \r\n16.151 mills \r\n \r\nAdditionally, Title Ad Valorem Tax revenues, at the fund reporting level, amounted to $1,277,668.32 during fiscal year ended June 30, 2018. \r\nSALES TAXES \r\nEducation Special Purpose Local Option Sales Tax (ESPLOST), at the fund reporting level, during the year amounted to $4,956,566.64 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. \r\n \r\n- 17 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 3: BUDGETARY DATA \r\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. \r\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. \r\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. \r\nNOTE 4: DEPOSITS, CASH EQUIVALENTS AND INVESTMENTS \r\nCOLLATERALIZATION OF DEPOSITS \r\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, 2018, $151,853.00 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. \r\nAcceptable security for deposits consists of any one of or any combination of the following: \r\n(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, \r\n(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, \r\n(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia, \r\n(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, \r\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, \r\n(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and \r\n \r\n- 18 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\n \r\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 warrants. The program lists the types of eligible collateral. The OST approves authorized custodians. \r\n \r\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. \r\nCATEGORIZATION OF DEPOSITS \r\n \r\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, School District had deposits with a carrying amount of $11,822,872.80 and a bank balance of $15,575,558.61. The bank balances insured by Federal depository insurance were $974,607.91. The bank balances included in the State's Secure Deposit Program (SDP) were $14,455,320.67. \r\n \r\nAt June 30, 2018, $145,630.00 of the School District's bank balance was exposed to custodial credit risk as follows: \r\n \r\nUninsured and Uncollateralized \r\n \r\n$ 145,630.00 \r\n \r\nUninsured with collateral held by the pledging \r\n \r\nfinancial institution \r\n \r\n- \r\n \r\nUninsured with collateral held by the pledging \r\n \r\nfinancial institution's trust department or \r\n \r\nagent but not in the School District's name \r\n \r\n- \r\n \r\nTotal \r\n \r\n$ 145,630.00 \r\n \r\n- 19 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\nReconciliation of cash and cash equivalents balances to carrying value of deposits: \r\n \r\nCash and cash equivalents Statement of Net Position Statement of Fiduciary Net Position \r\n \r\n$ 32,834,117.06 520,456.85 \r\n \r\nTotal cash and cash equivalents \r\n \r\n33,354,573.91 \r\n \r\nAdd: Deposits with original maturity of three months or more reported as investments \r\n \r\n10,770.38 \r\n \r\nLess: Investment pools reported as cash and cash equivalents \r\nGeorgia Fund 1 \r\n \r\n21,542,471.49 \r\n \r\nTotal carrying value of deposits - June 30, 2018 \r\n \r\n$ 11,822,872.80 \r\n \r\nCATEGORIZATION OF CASH EQUIVALENTS \r\n \r\nThe School District reported cash equivalents of $21,542,471.49 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, $1.00 per share, which approximates fair value. The pool is an AAAf rated investment pool by Standard and Poor's. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2018, was 10 days. \r\n \r\nGeorgia Fund 1, administered by the State of Georgia, Office of the State Treasurer, is not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office of the State Treasurer for the Georgia Fund 1, does not provide for investment in derivatives or similar investments. Additional information on the Georgia Fund 1 is disclosed in the State of Georgia Comprehensive Annual Financial Report. This audit can be obtained from the Georgia Department of Audits and Accounts at www.audits.ga.gov/SGD/CAFR.html. \r\nCATEGORIZATION OF INVESTMENTS \r\n \r\nAt June 30, 2018, the School District had the following investments: \r\n \r\nInvestment Type \r\n \r\nFair Value \r\n \r\nInvestment Maturity Less Than 1 Year \r\n \r\nDebt Securities U. S. Agencies Implicitly Guaranteed \r\n \r\n$ 1,704,435.00 $ \r\n \r\n1,704,435.00 \r\n \r\nOther Investments Bond Mutual Funds Equity Mutual Funds \r\n \r\n1,632,876.00 2,114,489.00 \r\n \r\nTotal Investments \r\n \r\n$ 5,451,800.00 \r\n \r\n- 20 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\nFair Value of Investments \r\n \r\nThe School District measures and records its investments using fair value measurement guidelines established by generally accepted accounting principles. These guidelines recognize a three-tiered fair value hierarchy, as follows: \r\n \r\nLevel 1: Quoted prices for identical measurements in active markets; \r\n \r\nLevel 2: Observable inputs other than quoted market prices; and, \r\n \r\nLevel 3: Unobservable inputs. \r\n \r\nAt June 30, the School District had the following investments by fair value level: \r\n \r\nInvestments by fair value level: \r\n \r\nFair Value \r\n \r\nLevel 1 \r\n \r\nLevel 2 \r\n \r\nU. S. Agencies Implicitly Guaranteed \r\nMutual Bond Funds Equity Mutual Funds - Domestic Equity Mutual Funds - International \r\n \r\n$ 1,704,435.00 $ \r\n \r\n- $ 1,704,435.00 \r\n \r\n1,632,876.00 1,632,876.00 \r\n \r\n- \r\n \r\n1,922,011.00 1,922,011.00 \r\n \r\n- \r\n \r\n192,478.00 \r\n \r\n192,478.00 \r\n \r\n- \r\n \r\nTotal investments by fair value level \r\n \r\n$ 5,451,800.00 $ 3,747,365.00 $ 1,704,435.00 \r\n \r\nInterest Rate Risk \r\nInterest rate risk is the risk that changes in interest rates of debt investment will adversely affect the fair value of an investment. The School District does not have a formal policy for managing interest rate risk. \r\nCustodial Credit Risk \r\nCustodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, the School District will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The School District does not have a formal policy for managing custodial credit risk. \r\nAt June 30, 2018, $3,747,365.00 of the School District's applicable investments were held by the investment's counterparty, not in the School District's name. \r\nCredit Quality Risk \r\nCredit quality risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. State law limits investments to those prescribed O.C.G.A. 36-83-4. The School District does not have a formal policy that would further limit its investment choices or one that addresses credit risk. \r\n \r\n- 21 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\nThe investments subject to credit quality risk are reflected below: \r\n \r\nRated Debt Investments \r\n \r\nFair Value \r\n \r\nQuality Ratings \r\n \r\nAAA \r\n \r\nUnrated \r\n \r\nDebt Securities U. S. Agencies Implicitly Guaranteed Mutual Bond Fund \r\n \r\n$ 1,704,435.00 $ 1,704,435.00 $ \r\n \r\n- \r\n \r\n1,632,876.00 \r\n \r\n- \r\n \r\n1,632,876.00 \r\n \r\nTotals by Quality Ratings $ 3,337,311.00 $ 1,704,435.00 $ 1,632,876.00 \r\n \r\nConcentration of Credit Risk \r\n \r\nConcentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The School District does not have a formal policy for managing concentration of credit risk. More than 5% of the School District's investments are in Mutual Equity Funds, Mutual Bond Funds and Federal National Mortgage Association (FNMA) Discount Note. These investments are 39%, 30%, and 31% of the School District's total investments, respectively. \r\nNOTE 5: RESTRICTED ASSETS \r\n \r\nThe restricted assets represent the investment balance, totaling $1,704,435.00 respectively, for the QZAB Bond Sinking Fund. \r\nNOTE 6: CAPITAL ASSETS \r\n \r\nThe following is a summary of changes in the capital assets for governmental activities during the fiscal year: \r\n \r\nBalances July 1, 2017 \r\n \r\nIncreases \r\n \r\nDecreases \r\n \r\nBalances June 30, 2018 \r\n \r\nGovernmental Activities Capital Assets, Not Being Depreciated: \r\nLand Construction in Progress \r\n \r\n$ 2,275,174.50 $ 13,402,571.39 \r\n \r\n9,121.60 $ \r\n \r\n- $ \r\n \r\n473,771.41 13,445,276.58 \r\n \r\n2,284,296.10 431,066.22 \r\n \r\nTotal Capital Assets Not Being Depreciated \r\n \r\n15,677,745.89 \r\n \r\n482,893.01 13,445,276.58 \r\n \r\n2,715,362.32 \r\n \r\nCapital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements \r\nLess Accumulated Depreciation for: Buildings and Improvements Equipment Land Improvements \r\n \r\n101,303,245.95 4,794,118.70 2,594,719.05 \r\n \r\n13,737,296.76 171,416.00 - \r\n \r\n24,454,610.08 4,021,266.75 1,270,310.74 \r\n \r\n2,144,924.34 192,533.10 57,271.82 \r\n \r\n- \r\n \r\n115,040,542.71 \r\n \r\n- \r\n \r\n4,965,534.70 \r\n \r\n- \r\n \r\n2,594,719.05 \r\n \r\n- \r\n \r\n26,599,534.42 \r\n \r\n- \r\n \r\n4,213,799.85 \r\n \r\n- \r\n \r\n1,327,582.56 \r\n \r\nTotal Capital Assets, Being Depreciated, Net \r\n \r\n78,945,896.13 11,513,983.50 \r\n \r\n- \r\n \r\n90,459,879.63 \r\n \r\nGovernmental Activity Capital Assets - Net $ 94,623,642.02 $ 11,996,876.51 $ 13,445,276.58 $ 93,175,241.95 \r\n \r\n- 22 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\nCurrent year depreciation expense by function is as follows: \r\n \r\nInstruction Support Services \r\nStudent Transportation Services Central Support Services Food Services \r\n \r\n$ 172,695.20 17,280.00 \r\n \r\n$ 2,177,998.73 \r\n189,975.20 26,755.33 \r\n$ 2,394,729.26 \r\n \r\nNOTE 7: INTERFUND ASSETS, LIABILITIES, AND TRANSFERS INTERFUND ASSETS AND LIABILITIES \r\n \r\nDue to and due from other funds are recorded for interfund receivables and payables which arise from interfund transactions. Interfund balances at June 30, 2018, consisted of the following: \r\n \r\nDue From Other Funds \r\n \r\nDue To Other Funds \r\n \r\nGeneral Fund Capital Projects Fund \r\n \r\n$ 3,720,659.89 - \r\n \r\n$ \r\n \r\n- \r\n \r\n3,720,659.89 \r\n \r\n$ 3,720,659.89 $ 3,720,659.89 \r\n \r\nInterfund assets and liabilities are a result of the general fund loaning funds to the capital projects fund to provide cash to complete construction projects. \r\nINTERFUND TRANSFERS \r\n \r\nInterfund transfers for the year ended June 30, 2018, consisted of the following: \r\n \r\nTransfers to \r\n \r\nTransfers From \r\nDebt Service Fund \r\n \r\nCapital Projects Fund \r\n \r\n$ 1,833,787.67 \r\n \r\nTransfers are used to move Special Purpose Local Option Sales Tax (SPLOST) revenues collected by the debt service fund to the capital projects fund for the payment of cost associated with construction projects approved by the Special Purpose Local Option Sales Tax (SPLOST) referendum. \r\nNOTE 8: SHORT-TERM DEBT \r\nThe School District issues tax anticipation notes and obtains temporary loans in advance of property tax collections, depositing the proceeds in its general fund. This short-term debt is to provide cash for operations until property tax collections are received by the School District. Article IX, Section V, Paragraph V of the Constitution of the State of Georgia limits the aggregate amount of short-term debt to 75% of the total gross income from taxes collected in the preceding year and requires all short-term debt to be repaid no later than December 31 of the calendar year in which the debt was incurred. \r\n \r\n- 23 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\nShort-term debt activity for the fiscal year is as follows: \r\n \r\nBeginning Balance \r\n \r\nIssued \r\n \r\nRedeemed \r\n \r\nTax Anticipation Notes $ \r\n \r\n- $ 1,600,000.00 $ 1,600,000.00 $ \r\n \r\nEnding Balance \r\n- \r\n \r\nNOTE 9: LONG-TERM LIABILITIES The changes in long-term liabilities during the fiscal year for governmental activities, were as follows: \r\n \r\nGeneral Obligation (G.O.) Bonds Qualified Zone Academy Bonds \r\nTotal Bond Debt \r\nCapital Leases Compensated Absences(1) Unamortized Bond Premiums \r\n \r\nBalance July 1, 2017 \r\n \r\nAdditions \r\n \r\nGovernmental Activities \r\n \r\nBalance \r\n \r\nDeductions \r\n \r\nJune 30, 2018 \r\n \r\nDue Within One Year \r\n \r\n$ 10,090,000.00 $ 18,050,000.00 $ 2,450,000.00 $ 25,690,000.00 $ 2,490,000.00 \r\n \r\n2,000,000.00 \r\n \r\n- \r\n \r\n- \r\n \r\n2,000,000.00 \r\n \r\n- \r\n \r\n12,090,000.00 \r\n418,022.42 154,715.52 920,338.76 \r\n \r\n18,050,000.00 \r\n33,867.22 2,466,365.75 \r\n \r\n2,450,000.00 \r\n418,022.42 23,868.90 \r\n332,849.93 \r\n \r\n27,690,000.00 \r\n164,713.84 3,053,854.58 \r\n \r\n2,490,000.00 \r\n538,380.41 \r\n \r\n$ 13,583,076.70 $ 20,550,232.97 $ 3,224,741.25 $ 30,908,568.42 $ 3,028,380.41 \r\n \r\n(1) The portion of compensated absences due within one year has been determined to be immaterial to the basic financial statements. \r\nGENERAL OBLIGATION DEBT OUTSTANDING \r\n \r\nThe School District's bonded debt consists of various issues 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. \r\n \r\nDuring the current year, the School District issued general obligation bonds totaling $18,050,000.00 to for capital outlay project to construct, remodel, improve, and equip existing facilities. \r\n \r\nGeneral obligation bonds currently outstanding are as follows: \r\n \r\nDescription \r\n \r\nInterest Rates \r\n \r\nIssue Date \r\n \r\nMaturity Date \r\n \r\nAmount Issued \r\n \r\nAmount Outstanding \r\n \r\nGeneral Government - Series 2014 General Government - Series 2018 \r\n \r\n2.00% - 5.00% 4.00% - 5.00% \r\n \r\n7/22/2014 3/1/2018 \r\n \r\n4/1/2021 $ 12,500,000.00 $ 7,640,000.00 \r\n \r\n3/1/2026 \r\n \r\n18,050,000.00 \r\n \r\n18,050,000.00 \r\n \r\n$ 30,550,000.00 $ 25,690,000.00 \r\n \r\n- 24 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\nThe following schedule details debt service requirements to maturity for the School District's total general obligation bonds payable: \r\n \r\nFiscal Year Ended June 30: \r\n \r\nGeneral Obligation Debt \r\n \r\nPrincipal \r\n \r\nInterest \r\n \r\nUnamortized Bond Premium \r\n \r\n2019 2020 2021 2022 2023 2024 - 2028 \r\n \r\n$ \r\n \r\n2,490,000.00 $ 1,190,350.00 $ \r\n \r\n2,545,000.00 \r\n \r\n1,090,750.00 \r\n \r\n2,605,000.00 \r\n \r\n963,500.00 \r\n \r\n3,425,000.00 \r\n \r\n833,250.00 \r\n \r\n3,500,000.00 \r\n \r\n696,250.00 \r\n \r\n11,125,000.00 \r\n \r\n1,123,750.00 \r\n \r\n538,380.41 538,380.41 538,380.41 308,295.72 308,295.72 822,121.91 \r\n \r\nTotal Principal and Interest \r\n \r\n$ \r\n \r\n25,690,000.00 $ 5,897,850.00 $ \r\n \r\n3,053,854.58 \r\n \r\nQUALIFIED ZONE ACADEMY BONDS (QZAB) \r\n \r\nSection 226 of the Taxpayer Relief Act of 1997 (Public Law 105-34) provides for a source of capital at no or at nominal interest rates for costs incurred by School Districts in connection with the establishment of special academic programs, in partnership with the business community. The School District, in agreement with Regions Bank, has entered into such an arrangement. \r\n \r\nThis agreement establishes a method of repayment for qualified interest-free debt instrument. The agreement requires the School District to deposit funds annually into a sinking fund account on or before June 30, 2018. The amount on deposit at June 30, 2018 was $1,704,435.00. \r\n \r\nDebt currently outstanding under Qualified Zone Academy Bonds is as follows: \r\n \r\nDescription \r\n \r\nInterest Rate \r\n \r\nIssue Date Maturity Date \r\n \r\nAmount Issued \r\n \r\nAmount Outstanding \r\n \r\nGeneral Government - QZAB - Series 2006 \r\n \r\n0.00% \r\n \r\n12/5/2006 12/15/2022 $ 2,000,000.00 $ 2,000,000.00 \r\n \r\nThe following schedule reports the annual Qualified Zone Academy Bond payments: \r\n \r\nFiscal Year Ended June 30: \r\n \r\nPrincipal \r\n \r\n2023 \r\n \r\n$ 2,000,000.00 \r\n \r\nCOMPENSATED ABSENCES \r\nCompensated absences represent obligations of the School District relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. Typically, the general fund is the fund used to liquidate this long-term debt. The School District uses the vesting method to compute compensated absences. \r\nNOTE 10: RISK MANAGEMENT \r\nINSURANCE \r\nCommercial Insurance \r\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. \r\n- 25 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\nUNEMPLOYMENT COMPENSATION \r\n \r\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. \r\n \r\nChanges in the unemployment compensation claims liability during the last two fiscal years are as follows: \r\n \r\nBeginning of Year Liability \r\n \r\nClaims and Changes in Estimates \r\n \r\nClaims Paid \r\n \r\nEnd of Year Liability \r\n \r\n2017 $ 2018 $ \r\n \r\n- $ \r\n \r\n12,210.00 $ 12,210.00 $ \r\n \r\n- \r\n \r\n- $ \r\n \r\n5,802.00 $ \r\n \r\n5,802.00 $ \r\n \r\n- \r\n \r\nSURETY BOND The School District purchased a surety bond to provide additional insurance coverage as follows: \r\nPosition Covered Amount \r\n \r\nSuperintendent $ 50,000.00 \r\n \r\nNOTE 11: FUND BALANCE CLASSIFICATION DETAILS \r\n \r\nThe School District's financial statements include the following amounts presented in the aggregate at June 30, 2018: \r\n \r\nNonspendable Inventories \r\nRestricted Continuation of Federal Programs Capital Projects Debt Service Continuation of State Programs \r\nAssigned School Activity Accounts \r\nUnassigned \r\n \r\n$ \r\n \r\n55,148.73 \r\n \r\n$ 1,881,899.32 12,902,908.39 6,730,475.98 612.08 \r\n \r\n21,515,895.77 \r\n \r\n605,331.21 11,935,177.79 \r\n \r\nFund Balance, June 30, 2018 \r\n \r\n$ 34,111,553.50 \r\n \r\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. \r\n \r\n- 26 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 12: SIGNIFICANT COMMITMENTS COMMITMENTS UNDER CONSTRUCTION CONTRACTS \r\n \r\nThe following is an analysis of significant outstanding construction or renovation contracts executed by the School District as of June 30, 2018. \r\n \r\nProject \r\n \r\nUnearned Executed Contracts (1) \r\n \r\nPayments through June 30, 2018 (2) \r\n \r\nCedartown High School Fine Arts Center $ Rockmart High School AG Center \r\n$ \r\n \r\n6,643,357.22 $ 1,060,467.57 \r\n7,703,824.79 $ \r\n \r\n207,324.79 215,691.43 \r\n423,016.22 \r\n \r\n(1) The amounts described are not reflected in the basic financial statements. (2) Payments include contracts and retainages payable at year-end. \r\nNOTE 13: SIGNIFICANT CONTINGENT LIABILITIES \r\nFEDERAL GRANTS \r\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. \r\nNOTE 14: OTHER POST-EMPLOYMENT BENEFITS (OPEB) \r\nGEORGIA SCHOOL PERSONNEL POST-EMPLOYMENT HEALTH BENEFIT FUND \r\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. \r\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. \r\n \r\n- 27 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\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 $2,057,312.00 for the year ended June 30, 2018. Active employees are not required to contribute to the School OPEB Fund. \r\nOPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB \r\n \r\nAt June 30, 2018, the School District reported a liability of $56,608,834.00 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 0.402911%, which was an decrease of 0.009557% from its proportion measured as of June 30, 2016. \r\n \r\nFor the year ended June 30, 2018, the School District recognized OPEB expense of $3,075,234.00. At June 30, 2018, the School District reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: \r\n \r\nDeferred Outflows of Resources \r\n \r\nOPEB \r\n \r\nDeferred Inflows of Resources \r\n \r\nChanges of assumptions \r\n \r\n$ \r\n \r\n- $ 4,310,618.00 \r\n \r\nNet difference between projected and actual \r\n \r\nearnings on OPEB plan investments \r\n \r\n16,557.00 \r\n \r\n- \r\n \r\nChanges in proportion and differences between School District contributions and proportionate share of contributions \r\n \r\n- \r\n \r\n1,200,465.00 \r\n \r\nSchool District contributions subsequent to \r\n \r\nthe measurement date \r\n \r\n2,057,312.00 \r\n \r\n- \r\n \r\nTotal \r\n \r\n$ 2,073,869.00 $ 5,511,083.00 \r\n \r\n- 28 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\nSchool District contributions subsequent to the measurement date of $2,057,312.00 are reported as deferred outflows of resources and will be recognized as a reduction of the net OPEB liability in the year ended June 30, 2019. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: \r\n \r\nYear Ended June 30: \r\n \r\nOPEB \r\n \r\n2019 2020 2021 2022 2023 2024 \r\n \r\n$ (987,063.00) $ (987,063.00) $ (987,063.00) $ (987,063.00) $ (991,202.00) $ (555,072.00) \r\n \r\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: \r\nOPEB: \r\n \r\nInflation \r\n \r\n2.75% \r\n \r\nSalary increases \r\n \r\nERS \r\n \r\n3.25% - 7.00%, including inflation \r\n \r\nJRS \r\n \r\n4.50%, including inflation \r\n \r\nLRS \r\n \r\nNone \r\n \r\nTRS \r\n \r\n3.25 -- 9.00%, including inflation \r\n \r\nPSERS \r\n \r\nN/A \r\n \r\nLong-term expected rate of return \r\nHealthcare cost trend rate \r\n \r\n3.88%, compounded annually, net of investment expense, and including inflation \r\n \r\nPre-Medicare Eligible \r\n \r\n7.75% \r\n \r\nMedicare Eligible \r\n \r\n5.75% \r\n \r\nUltimate trend rate \r\n \r\nPre-Medicare Eligible \r\n \r\n5.00% \r\n \r\nMedicare Eligible \r\n \r\n5.00% \r\n \r\nYear of Ultimate trend rate \r\n \r\n2022 \r\n \r\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: \r\n For ERS, JRS and LRS members: The RP-2000 Combined Mortality Table projected to 2025 \r\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. \r\n- 29 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\n For TRS members: The RP-2000 White Collar Mortality Table projected to 2025 with projection \r\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. \r\n For PSERS members: The RP-2000 Blue-Collar Mortality Table projected to 2025 with \r\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. \r\n \r\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. \r\n \r\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. \r\n \r\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%. \r\n \r\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: \r\n \r\nAsset Class \r\n \r\nTarget Allocation \r\n \r\nLong-Term Expected Real Rate of Return* \r\n \r\nLocal Government Investment Pool \r\n \r\n100.00% \r\n \r\n1.13% \r\n \r\n*Rate shown in net of the 2.75% assumed rate of inflation. \r\n \r\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 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 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. \r\n \r\n- 30 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\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 \r\ncalculated 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: \r\n \r\n1% Decrease (2.58%) \r\n \r\nCurrent Discount Rate (3.58%) \r\n \r\n1% Increase (4.58%) \r\n \r\nNet OPEB Liability \r\n \r\n$ 67,212,849.00 $ \r\n \r\n56,608,834.00 $ 48,240,117.00 \r\n \r\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 \r\nliability, as well as what the District's proportionate share of the net OPEB liability would be if it were \r\ncalculated using healthcare cost trend rates that are 1-percentage-point lower or 1-percentage-point \r\nhigher than the current healthcare cost trend rates: \r\n \r\n1% Decrease \r\n \r\nCurrent Healthcare Cost Trend Rate \r\n \r\n1% Increase \r\n \r\nNet OPEB Liability \r\n \r\n$ 46,922,274.00 $ 56,608,834.00 $ 69,220,720.00 \r\n \r\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. \r\n \r\nNOTE 15: RETIREMENT PLANS \r\n \r\nThe School District participates in various retirement plans administered by the State of Georgia, as further explained below. \r\nTEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) \r\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. \r\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. \r\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 \r\n \r\n- 31 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\nthe year ended June 30, 2018 was 16.81% of annual School District payroll, of which 16.73% of payroll was required from the School District and 0.08% of payroll was required from the State. For the current fiscal year, employer contributions to the pension plan were $6,546,048.34 and $30,413.93 from the School District and the State, respectively. \r\nEMPLOYEES' RETIREMENT SYSTEM \r\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. \r\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. \r\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. \r\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. \r\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 payroll 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 $32,475.72 for the current fiscal year. \r\nPUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM (PSERS) \r\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. \r\n- 32 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\nassigns 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. \r\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. \r\n \r\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. \r\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. \r\n \r\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 $109,330.00. \r\nPension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions \r\n \r\nAt June 30, 2018, the School District reported a liability of $62,042,092.00 for its proportionate share of the net pension liability for TRS ($61,829,603.00) and ERS ($212,489.00). \r\n \r\nThe TRS net pension liability reflected a reduction for support provided to the School District by the State of Georgia for certain public school support personnel. The amount recognized by the School District as its proportionate share of the net pension liability, the related State of Georgia support, and the total portion of the net pension liability that was associated with the School District were as follows: \r\n \r\nSchool District's proportionate share of the net pension liability \r\n \r\n$ 61,829,603.00 \r\n \r\nState of Georgia's proportionate share of the net pension liability associated with the School District \r\n \r\n748,059.00 \r\n \r\nTotal \r\n \r\n$ 62,577,662.00 \r\n \r\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. \r\nAt June 30, 2017, the School District's TRS proportion was 0.332680%, which was a decrease of 0.009807% from its proportion measured as of June 30, 2016. At June 30, 2017, the School District's ERS proportion was 0.005232%, which was an increase of 0.000429% from its proportion measured as of June 30, 2016. \r\n \r\n- 33 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\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 $551,379.00. \r\n \r\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. \r\n \r\nFor the year ended June 30, 2018, the School District recognized pension expense of $6,077,964.00 for TRS, $54,700.00 for ERS and $111,124.00 for PSERS and revenue of $79,193.00 for TRS and $111,124.00 for PSERS. The revenue is support provided by the State of Georgia. For TRS the State of Georgia support is provided only for certain support personnel. \r\n \r\nAt June 30, 2018, the School District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: \r\n \r\nTRS \r\nDeferred Outflows of Resources \r\n \r\nDeferred Inflows of Resources \r\n \r\nERS \r\n \r\nDeferred Outflows of Resources \r\n \r\nDeferred Inflows of Resources \r\n \r\nDifferences between expected and actual experience \r\n \r\n$ 2,312,808.00 $ 233,338.00 \r\n \r\n$ 2,328.00 $ \r\n \r\n2.00 \r\n \r\nChanges of assumptions \r\n \r\n1,355,382.00 \r\n \r\n- \r\n \r\n484.00 \r\n \r\n- \r\n \r\nNet difference between projected and actual earnings on pension plan investments \r\n \r\n- \r\n \r\n425,491.00 \r\n \r\n- \r\n \r\n529.00 \r\n \r\nChanges in proportion and differences between School District contributions and proportionate share of contributions \r\n \r\n- \r\n \r\n2,296,421.00 \r\n \r\n18,996.00 \r\n \r\n- \r\n \r\nSchool District contributions subsequent to the measurement date \r\n \r\n6,546,048.34 \r\n \r\n- \r\n \r\n32,475.72 \r\n \r\n- \r\n \r\nTotal \r\n \r\n$ 10,214,238.34 $ 2,955,250.00 \r\n \r\n$ 54,283.72 $ 531.00 \r\n \r\nThe School District contributions subsequent to the measurement date of $6,546,048.34 for TRS and $32,475.72 for ERS are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ended June 30, 2019. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: \r\n \r\nYear Ended June 30: \r\n \r\nTRS \r\n \r\nERS \r\n \r\n2019 2020 2021 2022 2023 \r\n \r\n$ (1,244,985.00) $ 12,324.00 \r\n \r\n$ 2,653,463.00 $ 12,593.00 \r\n \r\n$ 1,233,450.00 $ 2,385.00 \r\n \r\n$ (1,933,160.00) $ (6,025.00) \r\n \r\n$ \r\n \r\n4,172.00 $ \r\n \r\n- \r\n \r\n- 34 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\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: \r\n \r\nTeachers Retirement System: \r\n \r\nInflation \r\n \r\n2.75% \r\n \r\nSalary increases \r\n \r\n3.25%  9.00%, average, including inflation \r\n \r\nInvestment rate of return \r\n \r\n7.50%, net of pension plan investment expense, including inflation \r\n \r\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. \r\n \r\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. \r\nEmployees' Retirement System: \r\n \r\nInflation \r\n \r\n2.75% \r\n \r\nSalary increases \r\n \r\n3.25% - 7.00%, average, including inflation \r\n \r\nInvestment rate of return \r\n \r\n7.50%, net of pension plan investment expense, including inflation \r\n \r\nPost-retirement mortality rates were based on the RP-2000 Combined Mortality Table with future \r\nmortality improvement projected to 2025 with the Society of Actuaries' projection scale BB and set \r\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 \r\nof Actuaries' projection scale BB and set back 7 years for males and set forward 3 years for females \r\nwas used for death after disability retirement. There is a margin for future mortality improvement in \r\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 \r\nactual number of deaths that occurred during the study period for service retirements and \r\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. \r\n \r\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. \r\nPublic School Employees Retirement System: \r\n \r\nInflation \r\n \r\n2.75% \r\n \r\nSalary increases \r\n \r\nN/A \r\n \r\nInvestment rate of return \r\n \r\n7.50%, net of pension plan investment expense, including inflation \r\n \r\n- 35 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\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. \r\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: \r\n \r\nAsset class \r\n \r\nTRS Target allocation \r\n \r\nERS/PSERS Target \r\nallocation \r\n \r\nLong-term expected real rate of return* \r\n \r\nFixed income Domestic large stocks Domestic mid stocks Domestic small stocks International developed market stocks International emerging market stocks Alternative \r\nTotal \r\n \r\n30.00% 39.80% \r\n3.70% 1.50% 19.40% 5.60% \r\n100.00% \r\n \r\n30.00% 37.20% \r\n3.40% 1.40% 17.80% 5.20% 5.00% 100.00% \r\n \r\n(0.50)% 9.00% 12.00% 13.50% 8.00% 12.00% 10.50% \r\n \r\n* Rates shown are net of the 2.75% assumed rate of inflation \r\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. \r\n \r\n- 36 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\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 \r\npension liability calculated using the discount rate of 7.50%, as well as what the School District's \r\nproportionate 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: \r\n \r\nTeachers Retirement System: \r\nSchool District's proportionate share of the net pension liability \r\n \r\n1% Decrease (6.50%) \r\n \r\nCurrent Discount Rate (7.50%) \r\n \r\n1% Increase (8.50%) \r\n \r\n$ 101,469,632.00 $ \r\n \r\n61,829,603.00 $ 29,175,128.00 \r\n \r\nEmployees' Retirement System: \r\nSchool District's proportionate share of the net pension liability \r\n \r\n1% Decrease (6.50%) \r\n \r\nCurrent Discount Rate (7.50%) \r\n \r\n1% Increase (8.50%) \r\n \r\n$ \r\n \r\n299,918.00 $ \r\n \r\n212,489.00 $ 137,910.00 \r\n \r\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 publicly available at www.trsga.com/publications and http://www.ers.ga.gov/formspubs/formspubs.html. \r\n \r\nPOLK COUNTY SCHOOL DISTRICT SOCIAL SECURITY REPLACEMENT PLAN \r\nPlan Description: As of January 2004, the School District established a single employer defined benefit pension plan for the group of employees covered under the Public Service Employees Retirement System (PSERS). Recognizing that PSERS was a limited defined benefit plan that does not meet the requirements of a qualified social security replacement plan, the new plan was established for these employees to meet the requirements of a social security replacement plan. \r\n \r\nThe School District Social Security Replacement Plan (Plan) provides a pension benefit for each participant at retirement, equal to 1.5% of the participant's Average Monthly Compensation multiplied by his Years of Credited Service up to 40 Years of Credited Service. Years of service subsequent to July 1, 1991, are counted for purposes of determining a participant's benefit. The funding method and determination of benefits payable are provided in or authorized by various sections of Title 47 of the Official Code of Georgia Annotated (\"O.C.G.A\"). The Plan does not issue a separate financial report. \r\n \r\nThe employee is always 100% vested in his accrued benefit in the Plan. \r\n \r\nThe Plan is funded by employer contributions held in trust by Reliance Trust Company. The Actuary for the Plan is Swerdlin \u0026 Company. The Actuary determines the Plan liabilities and required contributions on an annual basis. \r\n \r\nAs of January 1, 2018, there were 375 Plan participants, consisting of the following: \r\n \r\nActive plan members Vested terminated participants Retirees, beneficiaires and disabled participants \r\n \r\nJanuary 1, 2018 127 153 95 375 \r\n \r\n- 37 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\nFunding Policy: Employees are neither required nor permitted to make contributions to the Plan. The Polk County School District (Employer) makes contributions required to fund the cost of the benefits provided to its eligible employees by this Plan. The Employer makes such contributions as necessary to fund the Plan in accordance with all applicable minimum funding standards under Georgia law. \r\nThe Employer's Annual Required Minimum Contribution is the actuarially determined amount necessary to fund the plan benefits. The current year required minimum contribution rate was $335,798.00. The current year contribution was $335,798.00. The current year contribution rate was 13.9% of annual covered payroll. \r\nInvestments: The Plan maintains an investment policy which fosters prudent and sound judgment in the management of plan assets to ensure safety of capital consistent with the fiduciary responsibility to the citizens of Georgia and which conforms to the Plan's investment policy. All investments are consistent with Polk School District's policy and applicable Federal and state laws. \r\nInvestments are reported at fair value. Securities are traded on a national or international exchange and are valued at the last reported sales price. The Plan's investment policy requires diversification of assets in an effort to avoid the risk of large losses and maximize the investment return to the Plan consistent with market and economic risk. \r\nAs of December 31, 2017, the Plan's assets are: \r\nAsset Class \r\n \r\nCash and Equivalent \r\n \r\n$ \r\n \r\nDomestic Equities \r\n \r\nInternational Equities \r\n \r\nFixed Income \r\n \r\n$ \r\n \r\n401,853.00 1,922,011.00 \r\n192,478.00 1,632,876.00 \r\n4,149,218.00 \r\n \r\nFor the plan year ended December 31, 2017, the annual money-weighted rate of return on pension plan investments, net of plan investment expense, was 10.88%. \r\n \r\nThe following table summarizes the adopted asset allocation policy at December 31, 2017: \r\n \r\nAsset Class \r\n \r\nAdopted Asset Allocation \r\n \r\nDomestic Equities International Equities Fixed Income Cash Total \r\n \r\n40% to 50% 1% to 5% \r\n35% to 45% 1% to 10% 100% \r\n \r\nPension Liability, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to the Plan: \r\n \r\nThe components of the net pension liability at December 31, 2017 were as follows: \r\n \r\nTotal pension liability Plan fiduciary net position \r\n \r\n$ \r\n \r\n7,796,010.00 \r\n \r\n(4,145,964.00) \r\n \r\nNet pension liability \r\n \r\n$ \r\n \r\n3,650,046.00 \r\n \r\n- 38 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\nThe Plan's fiduciary net position as a percentage of its total pension liability is 53.18%. \r\n \r\nThe net pension liability for the Plan was measured as of December 31, 2017. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of January 1, 2017. An expected total pension liability as of December 31, 2017 was determined using standard roll-forward techniques. \r\n \r\nFor the year ended June 30, 2017, the School District recognized pension expense of $436,396.00 for the Plan. \r\n \r\nAt June 30, 2018, the School District reported deferred outflows and resources and deferred inflows of resources related to the Plan from the following sources: \r\n \r\nDeferred Outflows of Resources \r\n \r\nDeferred Inflows of Resources \r\n \r\nNet difference between projected and actual \r\n \r\nearnings on pension plan investment \r\n \r\n$ \r\n \r\nDifferences between expected and actual experience \r\n \r\n129,033.00 $ \r\n \r\n113,689.00 \r\n \r\n106,711.00 \r\n \r\n348,772.00 \r\n \r\nChanges in actuarial assumptions \r\n \r\n423,869.00 \r\n \r\n173,901.00 \r\n \r\nTotal \r\n \r\n$ \r\n \r\n659,613.00 $ \r\n \r\n636,362.00 \r\n \r\nAmounts reported as deferred outflows of resources and deferred inflows of resources related to the Plan will be recognized in pension expense as follow: \r\nYear Ended June 30: \r\n \r\n2018 2019 2020 2021 2022 2023 Actuarial Methods and Assumptions: \r\n \r\n$ \r\n \r\n44,417.00 \r\n \r\n$ \r\n \r\n27,984.00 \r\n \r\n$ (25,664.00) \r\n \r\n$ (27,429.00) \r\n \r\n$ \r\n \r\n991.00 \r\n \r\n$ \r\n \r\n2,952.00 \r\n \r\nThe total pension liability was determined as of January 1, 2018 using the following actuarial assumptions and methods: \r\n \r\nInflation Salary increases Investment rate of return Single equivalent discount rate \r\n \r\n2.50% 3.00% 7%, net of pension plan investment expense 5.43%, net of pension plan investment expense \r\n \r\nMortality rates were based on the RP-2017 Blue Collar with MP-2017. \r\nThe long-term expected rate of return on the Plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return, net investment expenses and inflation, are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target \r\n \r\n- 39 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\nasset allocation percentage and by the expected inflation. Best estimates of arithmetic real rates of return for each major asset class, included in the Plan's target asset allocation as of December 31, 2017. \r\n \r\nAsset Class \r\n \r\nTarget Allocation \r\n \r\nLong-Term Expected Real Rate of Return* \r\n \r\nDomestic Equities International Equities Fixed Income Cash \r\n \r\n49% \r\n \r\n5.50% \r\n \r\n5% \r\n \r\n5.75% \r\n \r\n41% \r\n \r\n3.00% \r\n \r\n5% \r\n \r\n1.30% \r\n \r\n*Rates shown are net of the 2.50% assumed rate of inflation. \r\nDiscount rate: The discount rate used to measure the total pension liability was the single equivalent discount rate shown above. The projection of cash flows used to determine the discount rate assumed that employer contributions will be made at rates equal to actuarially determined contribution rates. Based on this assumption, the Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current Plan members through 2047 and the long-term expected rate of return of 7.00% was applied to this period. The 20-year tax-free municipal bond yield of 3.44% was applied after 2048. \r\nSensitivity of the Polk County School District's Net Pension Liability to changes in the discount rate: The following represents the School District's net pension liability calculated using the discount rate of 5.43%, as well as what the School District's net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (4.43%) or 1-percentage-point higher (6.43%) than the current rate: \r\n \r\n1% Decrease (4.43%) \r\n \r\nCurrent Rate (5.43%) \r\n \r\n1% Increase (6.43%) \r\n \r\nSchool District's proportionate share of the net pension liability \r\n \r\n$ 4,664,869.00 $ 3,650,046.00 $ 2,798,319.00 \r\n \r\nNOTE 16: RESTATEMENT OF PRIOR YEAR NET POSITION \r\n \r\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 $59,028,126.00 This change is in accordance with generally accepted accounting procedures. \r\n \r\nNet Position, July 1, 2017 as previously reported \r\n \r\n$ 33,504,401.36 \r\n \r\nPrior Period Adjustment - Implementation of GASB No. 75: Net OPEB Liability (measurement date) \r\n \r\n(61,128,937.00) \r\n \r\nDeferred Outflows - School District's Contributions made during fiscal year 2017 \r\n \r\n2,100,811.00 \r\n \r\nNet Position, July 1, 2017, as restated \r\n \r\n$ (25,523,724.64) \r\n \r\n- 40 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 17: TAX ABATEMENTS \r\nThe Development Authority of Polk County, the Cedartown Development Authority and the Rockmart Development Authority can enter into agreements with private individuals or entities for economic or industrial projects to encourage the creation of jobs and capital investment through an \"Economic Incentive Program.\" This program is used to incentivize these businesses to build, relocate, expand, or renovate within incorporated and unincorporated Polk County. Each agreement provides a property tax benefit to the company through a schedule of discounted valuation that reduces, for ad valorem tax purposes, the fair market value of real and/or personal property that is held by the Authorities and leased to the company. Georgia case law and the Authorities' enabling legislation provide the Authorities with the power to enter into such agreements with private companies. \r\nThe Authorities may accept title to real and personal property assets from a company in return for job creation and capital investment, and provide a tax benefit to the company through a lease agreement with the Authority. In considering eligibility for providing this benefit to a company, the Authorities review the following criteria: \r\n1. Eligible businesses can include new and existing industrial businesses. 2. But for an incentive agreement, the company would not create the jobs and investment in \r\nthe community. 3. Eligible projects must involve significant investment in real and personal property. 4. The average wage of the business' employees should be above the average wage of goods \r\nproducing employees in Polk County. 5. The business should offer medical benefits to all employees. 6. The impact to job retention will be considered for each expansion project. 7. As a condition of assistance, a business will be required to work with the Authority to \r\nconvey title to the Authority. \r\nIn return for a property tax benefit, a company is required to commit to creating jobs and capital investment within a defined period as part of a performance and accountability agreement with the Authority that includes provisions for the company to pay back a prorated portion of the benefit if they fail to meet the performance criteria by a specified date. The Authorities monitor compliance with performance and accountability agreements to ensure the companies meet their commitments. \r\nFor the Polk County School District's year ending December 31, 2017 the cumulative property tax not collected due to incentive agreements was $64,989.49; however, $16,247.37 was paid to the Polk County School District through the Economic Incentive Program for the same period. These agreements will result in an estimated $30.0 million in new capital investment for Polk County and more than 102 new/retained jobs. According to the National Association of Manufacturers, every dollar of new capital investment will generate $1.89, resulting in an additional $56.7 million in our economy, and the 102 jobs will generate another 408 jobs in other sectors. \r\n \r\n- 41 - \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY TEACHERS RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"1\" \r\n \r\nYear Ended \r\n2018 2017 2016 2015 \r\n \r\nSchool District's proportion of the \r\nnet pension liability \r\n \r\nSchool District's proportionate share of the net pension \r\nliability \r\n \r\nState of Georgia's proportionate share of the net pension liability \r\nassociated with the School District \r\n \r\n0.332680% $ 61,829,603.00 $ 0.342487% $ 70,658,887.00 $ 0.345774% $ 52,640,658.00 $ 0.346443% $ 43,768,503.00 $ \r\n \r\n748,059.00 $ 944,080.00 $ 600,892.00 $ 560,177.00 $ \r\n \r\nTotal \r\n62,577,662.00 71,602,967.00 53,241,550.00 44,328,680.00 \r\n \r\nSchool District's covered payroll \r\n$ 38,673,234.64 $ 38,069,372.98 $ 36,915,144.69 $ 35,545,926.47 \r\n \r\nSchool District's proportionate share of the net pension liability as a percentage of its \r\ncovered payroll \r\n \r\nPlan fiduciary net position as a \r\npercentage of the total pension liability \r\n \r\n159.88% 185.61% 142.60% 123.13% \r\n \r\n79.33% 76.06% 81.44% 84.03% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 43 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"2\" \r\n \r\nYear Ended \r\n2018 2017 2016 2015 \r\n \r\nSchool District's proportion of the net \r\npension liability \r\n \r\nSchool District's proportionate share of the net pension \r\nliability \r\n \r\nSchool District's covered payroll \r\n \r\nSchool District's proportionate share of the net pension liability as a \r\npercentage of covered payroll \r\n \r\n0.005232% $ 0.004803% $ 0.003427% $ 0.003393% $ \r\n \r\n212,489.00 $ 227,202.00 $ 138,841.00 $ 127,258.00 $ \r\n \r\n128,331.00 111,677.30 \r\n78,360.00 76,400.48 \r\n \r\n165.58% 203.45% 177.18% 166.57% \r\n \r\nPlan fiduciary net position as a \r\npercentage of total net pension liability \r\n76.33% 72.34% 76.20% 77.99% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 44 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY PUBLIC SCHOOLS EMPLOYEES RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"3\" \r\n \r\nYear Ended \r\n2018 2017 2016 2015 \r\n \r\nSchool District's proportion of the \r\nnet pension liability \r\n \r\nSchool District's proportionate share of the net pension liability \r\n \r\nState of Georgia's proportionate share of the net \r\npension liability associated with the School District \r\n \r\n0.00% $ 0.00% $ 0.00% $ 0.00% $ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n551,379.00 $ 762,372.00 $ 485,473.00 $ 443,309.00 $ \r\n \r\nTotal \r\n551,379.00 762,372.00 485,473.00 443,309.00 \r\n \r\nSchool District's covered payroll \r\n$ 1,883,260.87 $ 1,810,170.59 $ 1,791,780.27 $ 1,790,955.74 \r\n \r\nSchool District's proportionate share of the net pension \r\nliability as a percentage of its covered payroll \r\n \r\nPlan fiduciary net position as a \r\npercentage of the total pension liability \r\n \r\nN/A \r\n \r\n85.69% \r\n \r\nN/A \r\n \r\n81.00% \r\n \r\nN/A \r\n \r\n87.00% \r\n \r\nN/A \r\n \r\n88.29% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 45 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET OPEB LIABILITY \r\nSCHOOL OPEB FUND FOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"4\" \r\n \r\nYear Ended 2018 \r\n \r\nSchool District's proportion of the net OPEB liability \r\n \r\nSchool District's proportionate share \r\nof the net OPEB liability (asset) \r\n \r\nState of Georgia's proportionate share of the \r\nnet OPEB liability associated with the \r\nSchool District \r\n \r\nTotal \r\n \r\n0.402911% $ 56,608,834.00 $ \r\n \r\n- \r\n \r\n$ 56,608,834.00 \r\n \r\nSchool District's covered-employee \r\npayroll \r\n$ 32,469,171.98 \r\n \r\nSchool District's proportionate share \r\nof the net OPEB liability as a \r\npercentage of its covered-employee \r\npayroll \r\n \r\nPlan fiduciary net position as a \r\npercentage of the total OPEB liability \r\n \r\n174.35% \r\n \r\n1.61% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 46 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \r\nSCHEDULE OF CONTRIBUTIONS TEACHERS RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"5\" \r\n \r\nYear Ended \r\n \r\nContractually required contribution \r\n \r\nContributions in relation to the contractually required \r\ncontribution \r\n \r\nContribution deficiency (excess) \r\n \r\n2018 \r\n \r\n$ \r\n \r\n6,546,048.34 $ \r\n \r\n6,546,048.34 $ \r\n \r\n- \r\n \r\n2017 \r\n \r\n$ \r\n \r\n5,456,446.48 $ \r\n \r\n5,456,446.48 $ \r\n \r\n- \r\n \r\n2016 \r\n \r\n$ \r\n \r\n5,360,865.43 $ \r\n \r\n5,360,865.43 $ \r\n \r\n- \r\n \r\n2015 \r\n \r\n$ \r\n \r\n4,797,913.58 $ \r\n \r\n4,797,913.58 $ \r\n \r\n- \r\n \r\nSchool District's covered payroll \r\n$ 39,127,366.15 $ 38,673,234.64 $ 38,069,372.98 $ 36,915,144.69 \r\n \r\nContribution as a percentage of covered \r\npayroll \r\n16.73% 14.11% 14.08% 13.00% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 47 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \r\nSCHEDULE OF CONTRIBUTIONS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"6\" \r\n \r\nYear Ended \r\n \r\nContractually required contribution \r\n \r\nContributions in relation to the contractually required \r\ncontribution \r\n \r\nContribution deficiency (excess) \r\n \r\n2018 \r\n \r\n$ \r\n \r\n32,475.72 $ \r\n \r\n32,475.72 $ \r\n \r\n- \r\n \r\n2017 \r\n \r\n$ \r\n \r\n31,838.88 $ \r\n \r\n31,838.88 $ \r\n \r\n- \r\n \r\n2016 \r\n \r\n$ \r\n \r\n27,606.43 $ \r\n \r\n27,606.43 $ \r\n \r\n- \r\n \r\n2015 \r\n \r\n$ \r\n \r\n17,207.88 $ \r\n \r\n17,207.88 $ \r\n \r\n- \r\n \r\n2014 \r\n \r\n$ \r\n \r\n14,104.00 $ \r\n \r\n14,104.00 $ \r\n \r\n- \r\n \r\n2013 \r\n \r\n$ \r\n \r\n11,306.36 $ \r\n \r\n11,306.36 $ \r\n \r\n- \r\n \r\n2012 \r\n \r\n$ \r\n \r\n2,581.12 $ \r\n \r\n2,581.12 $ \r\n \r\n- \r\n \r\n2011 \r\n \r\n$ \r\n \r\n6,124.09 $ \r\n \r\n6,124.09 $ \r\n \r\n- \r\n \r\n2010 \r\n \r\n$ \r\n \r\n18,234.41 $ \r\n \r\n18,234.41 $ \r\n \r\n- \r\n \r\n2009 \r\n \r\n$ \r\n \r\n26,889.19 $ \r\n \r\n26,889.19 $ \r\n \r\n- \r\n \r\nSchool District's covered payroll \r\n \r\n$ \r\n \r\n130,926.01 \r\n \r\n$ \r\n \r\n128,331.00 \r\n \r\n$ \r\n \r\n111,677.30 \r\n \r\n$ \r\n \r\n78,360.00 \r\n \r\n$ \r\n \r\n76,400.48 \r\n \r\n$ \r\n \r\n75,872.88 \r\n \r\n$ \r\n \r\n22,193.64 \r\n \r\n$ \r\n \r\n58,828.91 \r\n \r\n$ \r\n \r\n175,162.44 \r\n \r\n$ \r\n \r\n258,301.54 \r\n \r\nContribution as a percentage of covered \r\npayroll \r\n24.81% 24.81% 24.72% 21.96% 18.46% 14.90% 11.63% 10.41% 10.41% 10.41% \r\n \r\n- 48 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \r\nSCHEDULE OF CONTRIBUTIONS SCHOOL OPEB FUND \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"7\" \r\n \r\nYear Ended \r\n \r\nContractually required contribution \r\n \r\nContributions in relation to the contractually required \r\ncontribution \r\n \r\nContribution deficiency (excess) \r\n \r\n2018 \r\n \r\n$ \r\n \r\n2,057,312.00 $ \r\n \r\n2,057,312.00 $ \r\n \r\n- \r\n \r\n2017 \r\n \r\n$ \r\n \r\n2,100,811.00 $ \r\n \r\n2,100,811.00 $ \r\n \r\n- \r\n \r\nSchool District's covered-employee \r\npayroll \r\n$ 32,469,171.98 $ 31,880,339.52 \r\n \r\nContribution as a percentage of covered- \r\nemployee payroll \r\n6.34% 6.59% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 49 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS \r\nSOCIAL SECURITY REPLACEMENT PLAN YEAR ENDING DECEMBER 31 \r\n \r\nSCHEDULE \"8\" \r\n \r\nTotal Pension Liability Service Cost Interest Differences between Expected and Actual Experience Change of Assumptions Benefit Payments \r\nNet Change in Total Pension Liability \r\nTotal Pension Liability - beginning \r\nTotal Pension Liability - ending (a) \r\nPlan Fiduciary Net Position Contributions - employer Net Investment Income Benefit Payments Administrative Expenses Due to Broker \r\nNet change in Plan Fiduciary Net Position \r\nPlan Fiduciary Net Position - beginning \r\nPlan Fiduciary Net Position - ending (b) \r\nNet Pension Liability - ending (a - b) \r\nPlan Fiduciary Net Position as a percentage of the Total \r\nPension Liability \r\nCovered-Employee Payroll \r\nNet Pension Liability as percentage of Covered Payroll \r\n \r\n2018 \r\n \r\n2017 \r\n \r\n2016 \r\n \r\n2015 \r\n \r\n2014 \r\n \r\n$ \r\n \r\n202,546.00 $ \r\n \r\n211,474.00 $ \r\n \r\n252,078.00 $ \r\n \r\n203,802.00 $ \r\n \r\n164,756.00 \r\n \r\n416,164.00 \r\n \r\n393,557.00 \r\n \r\n357,947.00 \r\n \r\n378,679.00 \r\n \r\n363,955.00 \r\n \r\n(63,999.00) \r\n \r\n70,820.00 \r\n \r\n62,585.00 \r\n \r\n(446,217.00) \r\n \r\n251,101.00 \r\n \r\n128,319.00 \r\n \r\n(153,139.00) \r\n \r\n(61,902.00) \r\n \r\n471,960.00 \r\n \r\n832,322.00 \r\n \r\n(332,304.00) \r\n \r\n(321,825.00) \r\n \r\n(294,805.00) \r\n \r\n(244,169.00) \r\n \r\n(221,185.00) \r\n \r\n350,726.00 \r\n \r\n200,887.00 \r\n \r\n315,903.00 \r\n \r\n364,055.00 \r\n \r\n1,390,949.00 \r\n \r\n7,445,284.00 \r\n \r\n7,244,397.00 \r\n \r\n6,928,494.00 \r\n \r\n6,564,439.00 \r\n \r\n5,173,490.00 \r\n \r\n$ 7,796,010.00 $ 7,445,284.00 $ 7,244,397.00 $ 6,928,494.00 $ 6,564,439.00 \r\n \r\n$ \r\n \r\n335,798.00 $ \r\n \r\n349,969.00 $ \r\n \r\n315,891.00 $ \r\n \r\n310,889.00 $ \r\n \r\n304,253.00 \r\n \r\n392,875.00 \r\n \r\n238,741.00 \r\n \r\n(20,197.00) \r\n \r\n147,675.00 \r\n \r\n473,233.00 \r\n \r\n(332,304.00) \r\n \r\n(321,825.00) \r\n \r\n(294,805.00) \r\n \r\n(244,169.00) \r\n \r\n(221,185.00) \r\n \r\n(24,030.00) \r\n \r\n(21,220.00) \r\n \r\n(29,660.00) \r\n \r\n(25,205.00) \r\n \r\n(23,094.00) \r\n \r\n- \r\n \r\n(1,113.00) \r\n \r\n(1,229.00) \r\n \r\n(4,493.00) \r\n \r\n(242.00) \r\n \r\n372,339.00 \r\n \r\n244,552.00 \r\n \r\n(30,000.00) \r\n \r\n184,697.00 \r\n \r\n532,965.00 \r\n \r\n3,773,625.00 \r\n \r\n3,529,073.00 \r\n \r\n3,559,073.00 \r\n \r\n3,374,376.00 \r\n \r\n2,841,411.00 \r\n \r\n4,145,964.00 \r\n \r\n3,773,625.00 \r\n \r\n3,529,073.00 \r\n \r\n3,559,073.00 \r\n \r\n3,374,376.00 \r\n \r\n$ 3,650,046.00 $ 3,671,659.00 $ 3,715,324.00 $ 3,369,421.00 $ 3,190,063.00 \r\n \r\n53.18% \r\n \r\n50.68% \r\n \r\n48.71% \r\n \r\n51.37% \r\n \r\n51.40% \r\n \r\n$ 2,416,621.00 $ 2,377,259.00 $ 2,600,407.00 $ 2,562,945.00 $ 2,726,676.00 \r\n \r\n151.04% \r\n \r\n154.45% \r\n \r\n142.87% \r\n \r\n131.47% \r\n \r\n117.00% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 50 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \r\nSCHEDULE OF CONTRIBUTIONS SOCIAL SECURITY REPLACEMENT PLAN FOR THE YEAR ENDED DECEMBER 31 \r\n \r\nSCHEDULE \"9\" \r\n \r\nYear Ended \r\n \r\nActually determined contribution \r\n \r\nContributions in relation to the actually determined contribution \r\n \r\nContribution deficiency (excess) \r\n \r\nSchool District's covered payroll \r\n \r\n2018 \r\n \r\n$ \r\n \r\n2017 \r\n \r\n$ \r\n \r\n2016 \r\n \r\n$ \r\n \r\n2015 \r\n \r\n$ \r\n \r\n2014 \r\n \r\n$ \r\n \r\n335,798.00 $ 328,611.00 $ 315,891.00 $ 310,889.00 $ 304,253.00 $ \r\n \r\n335,798.00 $ 349,969.00 $ 315,891.00 $ 310,889.00 $ 304,253.00 $ \r\n \r\n- \r\n \r\n$ \r\n \r\n(21,358.00) $ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n2,416,621.00 2,377,259.00 2,600,407.00 2,562,945.00 2,726,676.00 \r\n \r\nContribution as a percentage of covered \r\npayroll \r\n13.90% 14.72% 12.15% 12.13% 11.16% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 51 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF INVESTMENT RETURNS SOCIAL SECURITY REPLACEMENT PLAN \r\nYEAR ENDING DECEMBER 31 \r\n \r\nYear Ended \r\n2018 2017 2016 2015 2014 \r\n \r\nAnnual Money - Weighted Rate of Return, Net of Investment \r\nExpense \r\n10.88% 7.04% \r\n(0.59)% 4.55% \r\n17.25% \r\n \r\nSCHEDULE \"10\" \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 52 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION \r\nFOR THE YEAR ENDED JUNE 30, 2018 \r\n \r\nSCHEDULE \"11\" \r\n \r\nTeachers Retirement System \r\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. \r\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). \r\nEmployees' Retirement System \r\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. \r\nPublic School Employees Retirement System \r\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. \r\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). \r\nSchool OPEB Fund \r\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. \r\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 discount rate and an increase in the investment rate of return due to a longer term investment strategy. \r\nIn the June 30, 2015 actuarial valuation, decremental and underlying inflation assumptions were changed to reflect the Retirement Systems' experience studies. \r\nIn the June 30, 2012 actuarial valuation, a data audit was performed and data collection procedures and assumptions were changed. \r\nSocial Security Replacement Plan \r\nChanges of assumptions: There were no changes in benefits that affected the measurement of the total pension liability since the prior measurement date. However, in 2018 the amounts reported as changes in assumptions resulted from a decrease in the discount rate from 5.57% to 5.43% since the prior measurement date. \r\nMethod and assumptions used in calculations of actuarially determined contributions: The actuarially determined contribution rates in the schedule of contributions are calculated as of January 1, 2018. The following actuarial methods and assumptions were used to determine the contractually required contributions for year ended June 30, 2016 reported in that schedule: \r\n \r\nValuation date Actuarial cost method Amortization method Remaining amortization period Asset valuation method \r\nInflation rate Salary increases Investment rate of return \r\n \r\nJanuary 1, 2018 Entry age Level percentage of payroll 21 years Method recognized a portion of the difference between the market value of assets and expected actuarial value of assets, based on the assumed interest rate of return. The amount recognized each year is 20% of the difference between market value and expected actuarial value. 2.50% 3.00%, per annum 7.00%, net of pension plan investment \r\n \r\n- 53 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT GENERAL FUND \r\nSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL \r\nYEAR ENDED JUNE 30, 2018 \r\n \r\nSCHEDULE \"12\" \r\n \r\nREVENUES \r\nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous \r\nTotal Revenues \r\nEXPENDITURES \r\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 \r\nDebt Service \r\nTotal Expenditures \r\nExcess of Revenues over (under) Expenditures \r\nOTHER FINANCING SOURCES (USES) \r\nOther Sources Other Uses \r\nTotal Other Financing Sources (Uses) \r\nNet Change in Fund Balances \r\nFund Balances - Beginning \r\nAdjustments \r\n \r\nNONAPPROPRIATED BUDGETS \r\n \r\nORIGINAL (1) \r\n \r\nFINAL (1) \r\n \r\nACTUAL AMOUNTS \r\n \r\nVARIANCE OVER/UNDER \r\n \r\n$ \r\n \r\n13,035,000.00 $ \r\n \r\n13,035,000.00 $ \r\n \r\n15,330,250.99 $ \r\n \r\n- \r\n \r\n- \r\n \r\n187,275.10 \r\n \r\n45,949,545.00 \r\n \r\n47,475,109.00 \r\n \r\n49,444,551.75 \r\n \r\n- \r\n \r\n5,856,059.00 \r\n \r\n9,445,892.96 \r\n \r\n- \r\n \r\n2,065,582.00 \r\n \r\n2,108,405.09 \r\n \r\n- \r\n \r\n12,827.00 \r\n \r\n14,727.36 \r\n \r\n250,000.00 \r\n \r\n250,000.00 \r\n \r\n1,103,893.30 \r\n \r\n59,234,545.00 \r\n \r\n68,694,577.00 \r\n \r\n77,634,996.55 \r\n \r\n2,295,250.99 187,275.10 \r\n1,969,442.75 3,589,833.96 \r\n42,823.09 1,900.36 \r\n853,893.30 \r\n8,940,419.55 \r\n \r\n44,631,219.92 \r\n1,182,444.25 982,887.64 \r\n1,105,218.77 469,971.54 \r\n4,058,807.86 966,560.02 \r\n5,625,234.20 2,390,098.16 \r\n182,724.72 42,790.00 - \r\n4,730,358.69 - \r\n66,368,315.77 \r\n(7,133,770.77) \r\n350,000.00 (350,000.00) \r\n- \r\n(7,133,770.77) \r\n10,075,689.01 \r\n(134.80) \r\n \r\n49,637,126.00 \r\n2,128,626.00 1,708,898.65 1,105,218.77 \r\n573,197.54 4,154,705.00 1,010,560.02 6,006,884.00 2,953,152.00 \r\n191,527.00 50,017.00 \r\n1,977,304.00 4,780,727.79 \r\n- \r\n76,277,943.77 \r\n(7,583,366.77) \r\n350,000.00 (350,000.00) \r\n- \r\n(7,583,366.77) \r\n11,883,595.74 \r\n- \r\n \r\n48,863,592.85 \r\n1,967,913.03 1,189,233.21 1,011,428.62 \r\n896,295.48 4,154,704.52 \r\n779,112.93 6,045,985.71 2,825,569.31 \r\n191,526.04 50,017.88 \r\n2,060,267.58 4,597,770.24 \r\n300,423.89 \r\n74,933,841.29 \r\n2,701,155.26 \r\n- \r\n- \r\n2,701,155.26 \r\n11,777,013.87 \r\n- \r\n \r\n773,533.15 \r\n160,712.97 519,665.44 \r\n93,790.15 (323,097.94) \r\n0.48 231,447.09 (39,101.71) 127,582.69 \r\n0.96 (0.88) (82,963.58) 182,957.55 (300,423.89) \r\n1,344,102.48 \r\n10,284,522.03 \r\n(350,000.00) 350,000.00 \r\n- \r\n10,284,522.03 \r\n(106,581.87) \r\n- \r\n \r\nFund Balances - Ending \r\n \r\n$ \r\n \r\n2,941,783.44 $ \r\n \r\n4,300,228.97 $ \r\n \r\n14,478,169.13 $ \r\n \r\n10,177,940.16 \r\n \r\nNotes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual \r\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 $2,075,009.98 and $2,037,094.23, respectively. \r\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. \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 54 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \r\nYEAR ENDED JUNE 30, 2018 \r\n \r\nSCHEDULE \"13\" \r\n \r\nFUNDING AGENCY PROGRAM/GRANT \r\nAgriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program \r\nTotal Child Nutrition Cluster \r\nOther Programs Pass-Through From Georgia Department of Education Food Services Child Nutrition Discretionary Grants Limited Availability \r\nTotal U. S. Department of Agriculture \r\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 \r\nTotal Special Education Cluster \r\nOther Programs Pass-Through From Georgia Department of Education Career and Technical Education - Basic Grants to States Education for Homeless Children and Youth Education for Homeless Children and Youth English Language Acquisition State Grants English Language Acquisition State Grants Rural Education Rural Education Student Support and Academic Enrichment Program Supporting Effective Instruction State Grant Title I Grants to Local Educational Agencies Title I Grants to Local Educational Agencies \r\nTotal Other Programs \r\nTotal U. S. Department of Education \r\n \r\nCFDA NUMBER \r\n \r\nPASSTHROUGH \r\nENTITY ID \r\nNUMBER \r\n \r\nEXPENDITURES IN PERIOD \r\n \r\n10.553 10.555 \r\n \r\n18185GA324N1099 $ 18185GA324N1100 \r\n \r\n1,351,155.40 2,968,114.54 \r\n4,319,269.94 \r\n \r\n10.579 \r\n \r\n185GA350N8103 \r\n \r\n45,000.00 4,364,269.94 \r\n \r\n84.027 84.027 84.173 84.173 \r\n \r\nH027A160073 H027A170073 H173A160081 H173A170081 \r\n \r\n84.048 84.196 84.196 84.365 84.365 84.358 84.358 84.424A 84.367 84.010 84.010 \r\n \r\nV048A170010 S196A160011 S196A170011 S365A160010 S365A170010 S358B160010 S365B170010 S424A170011 S367A160001 S010A160010 S010A170010 \r\n \r\n369,059.00 1,256,279.13 \r\n15,194.00 24,837.57 \r\n1,665,369.70 \r\n97,587.00 17,371.00 31,273.48 17,806.00 70,444.10 43,967.00 98,830.53 43,737.68 137,679.79 332,229.00 2,185,603.19 \r\n3,076,528.77 \r\n4,741,898.47 \r\n \r\nTotal Expenditures of Federal Awards \r\n \r\n$ \r\n \r\n9,106,168.41 \r\n \r\nNotes to the Schedule of Expenditures of Federal Awards \r\nNote 1. Basis of Presentation \r\nThe accompanying schedule of expenditures of federal awards (the \"Schedule\") includes the federal award activity of the Polk County School District (the \"District\") 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. \r\nNote 2. Summary of Significant Accounting Policies \r\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. \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 55 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2018 \r\n \r\nSCHEDULE \"14\" \r\n \r\nAGENCY/FUNDING \r\nGRANTS Bright From the Start: Georgia Department of Early Care and Learning Pre-Kindergarten Program \r\nEducation, 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 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 Disability Services Pupil Transportation - State Bonds Residential Treatment Centers Grant Teacher of the Year Teachers Retirement Vocational Education \r\nGeorgia State Financing and Investment Commission Reimbursement on Construction Projects \r\nOffice of the State Treasurer Public School Employees Retirement \r\nCONTRACT Human Resources, Georgia Department of Family Connection \r\n \r\nGOVERNMENTAL FUND TYPES \r\n \r\nCAPITAL \r\n \r\nGENERAL \r\n \r\nPROJECTS \r\n \r\nFUND \r\n \r\nFUND \r\n \r\nTOTAL \r\n \r\n$ 1,248,342.20 $ \r\n \r\n- $ 1,248,342.20 \r\n \r\n2,460,086.00 318,696.00 \r\n6,226,141.00 498,743.00 \r\n3,398,217.00 359,920.00 \r\n4,844,564.00 4,074,176.00 1,722,042.00 7,259,067.00 1,200,806.00 \r\n515,476.00 355,113.00 1,069,031.00 912,284.00 274,669.00 156,203.00 \r\n3,007.00 \r\n1,145,093.00 1,820,506.00 2,040,957.00 \r\n(668,510.00) \r\n814,612.00 156,210.00 \r\n33,006.00 5,881,018.00 \r\n121,868.00 65,820.81 \r\n202,693.00 154,535.83 523,308.00 \r\n507.25 30,413.93 68,100.00 \r\n \r\n- \r\n \r\n2,460,086.00 \r\n \r\n- \r\n \r\n318,696.00 \r\n \r\n- \r\n \r\n6,226,141.00 \r\n \r\n- \r\n \r\n498,743.00 \r\n \r\n- \r\n \r\n3,398,217.00 \r\n \r\n- \r\n \r\n359,920.00 \r\n \r\n- \r\n \r\n4,844,564.00 \r\n \r\n- \r\n \r\n4,074,176.00 \r\n \r\n- \r\n \r\n1,722,042.00 \r\n \r\n- \r\n \r\n7,259,067.00 \r\n \r\n- \r\n \r\n1,200,806.00 \r\n \r\n- \r\n \r\n515,476.00 \r\n \r\n- \r\n \r\n355,113.00 \r\n \r\n- \r\n \r\n1,069,031.00 \r\n \r\n- \r\n \r\n912,284.00 \r\n \r\n- \r\n \r\n274,669.00 \r\n \r\n- \r\n \r\n156,203.00 \r\n \r\n- \r\n \r\n3,007.00 \r\n \r\n- \r\n \r\n1,145,093.00 \r\n \r\n- \r\n \r\n1,820,506.00 \r\n \r\n- \r\n \r\n2,040,957.00 \r\n \r\n- \r\n \r\n(668,510.00) \r\n \r\n- \r\n \r\n814,612.00 \r\n \r\n- \r\n \r\n156,210.00 \r\n \r\n- \r\n \r\n33,006.00 \r\n \r\n- \r\n \r\n5,881,018.00 \r\n \r\n- \r\n \r\n121,868.00 \r\n \r\n- \r\n \r\n65,820.81 \r\n \r\n- \r\n \r\n202,693.00 \r\n \r\n- \r\n \r\n154,535.83 \r\n \r\n- \r\n \r\n523,308.00 \r\n \r\n- \r\n \r\n507.25 \r\n \r\n- \r\n \r\n30,413.93 \r\n \r\n- \r\n \r\n68,100.00 \r\n \r\n- \r\n \r\n111,636.60 \r\n \r\n109,330.00 \r\n \r\n- \r\n \r\n111,636.60 109,330.00 \r\n \r\n48,499.73 \r\n \r\n- \r\n \r\n48,499.73 \r\n \r\n$ 49,444,551.75 $ 111,636.60 $ 49,556,188.35 \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 56 - \r\n \r\n (This page left intentionally blank) \r\n \r\n P0LK COUNTY SCHOOL DISTRICT SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \r\nYEAR ENDED JUNE 30, 2018 \r\n \r\nSCHEDULE \"15\" \r\n \r\nPROJECT \r\n \r\nORIGINAL ESTIMATED \r\nCOST (1) \r\n \r\nCURRENT ESTIMATED COSTS (2) \r\n \r\nAMOUNT EXPENDED IN CURRENT YEAR (3) (4) \r\n \r\nAMOUNT EXPENDED IN PRIOR YEARS (3) (4) \r\n \r\nTOTAL COMPLETION \r\nCOST \r\n \r\nEXCESS PROCEEDS NOT \r\nEXPENDED \r\n \r\nESTIMATED COMPLETION \r\nDATE \r\n \r\nSPLOST V \r\n \r\nRenovations, repairs, equipping, and \r\n \r\nimprovements made at existing schools to \r\n \r\ninclude Cedartown High School Football \r\n \r\nStadium, baseball fence and media wall, dug \r\n \r\nouts at both High Schools; Northside \r\n \r\nplayground and fence, system furniture roof \r\n \r\nstudies. \r\n \r\n$ \r\n \r\n300,000.00 $ \r\n \r\n840,999.50 $ \r\n \r\n61,108.01 $ \r\n \r\n647,155.69 $ \r\n \r\n- $ \r\n \r\n- \r\n \r\nPolk County College and Career Academy - \r\n \r\nCedartown and Rockmart \r\n \r\n8,850,000.00 \r\n \r\n13,852,684.99 \r\n \r\n42,705.19 \r\n \r\n13,809,979.80 \r\n \r\n13,852,684.99 \r\n \r\n- \r\n \r\n9,150,000.00 \r\n \r\n14,693,684.49 \r\n \r\n103,813.20 \r\n \r\n14,457,135.49 \r\n \r\n13,852,684.99 \r\n \r\n- \r\n \r\nSPLOST VI \r\n \r\nRenovations, repairs, equipping, and \r\n \r\nimprovements made at existing schools to \r\n \r\ninclude classroom additions, roofing and HVAC \r\n \r\nimprovements, boiler replacements track \r\n \r\nresurfacing, gym renovations at RHS and \r\n \r\nparking lots. \r\n \r\n11,644,647.02 \r\n \r\n11,644,647.02 \r\n \r\n7,723.64 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\nSystem-wide instructional and administrative \r\n \r\ntechnology/infrastructure; \r\n \r\n1,750,000.00 \r\n \r\n1,750,000.00 \r\n \r\n225,900.00 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\nCedartown High School Fine Arts with \r\n \r\nexpansion of and improvements to band and \r\n \r\ndrama facilities; \r\n \r\n6,850,682.01 \r\n \r\n6,850,682.01 \r\n \r\n214,024.79 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\nAcquiring Property; \r\n \r\n301,142.00 \r\n \r\n301,142.00 \r\n \r\n301,141.78 \r\n \r\n- \r\n \r\n301,141.78 \r\n \r\n- \r\n \r\nRockmart High Agriculture Learning Center, \r\n \r\ncollege and career facilities, and gym \r\n \r\nrenovations; \r\n \r\n1,276,159.00 \r\n \r\n1,276,159.00 \r\n \r\n217,041.43 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\nSystem-wide Safety and Security \r\n \r\nEquipment/Fencing including vehicles; \r\n \r\n284,750.00 \r\n \r\n284,750.00 \r\n \r\n159,345.59 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\nPress box at RHS Concession Stands at RMS and RHS Kitchen at Cedartown High School School buses 2017 bond issuance cost and agent fee \r\n \r\n480,000.00 274,002.00 925,008.00 889,000.00 324,609.97 25,000,000.00 \r\n \r\n480,000.00 274,002.00 925,008.00 889,000.00 324,609.97 25,000,000.00 \r\n \r\n324,609.97 1,449,787.20 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n324,609.97 \r\n \r\n- \r\n \r\n- \r\n \r\n625,751.75 \r\n \r\n- \r\n \r\n6/30/2019 Complete \r\n6/30/2026 6/30/2021 \r\n6/30/2020 Complete \r\n6/30/2019 6/30/2019 6/30/2020 6/30/2020 6/30/2021 6/30/2024 \r\nComplete \r\n \r\nTotal \r\n \r\n$ 34,150,000.00 $ 39,693,684.49 $ 1,553,600.40 $ 14,457,135.49 $ 14,478,436.74 $ \r\n \r\n- \r\n \r\n(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax. \r\n \r\n(2) The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion. \r\n \r\n(3) The voters of Polk 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. \r\n \r\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: \r\n \r\nPrior Years \r\n \r\n$ 1,333,745.00 \r\n \r\nCurrent Year \r\n \r\n455,100.00 \r\n \r\nTotal \r\n \r\n$ 1,788,845.00 \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 57 - \r\n \r\n SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS \r\n \r\n Greg S. Griffin \r\nSTATE AUDITOR \r\n(404) 656-2174 \r\n \r\nDEPARTMENT OF AUDITS AND ACCOUNTS \r\n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \r\nJuly 15, 2019 \r\n \r\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 \r\nand Superintendent and Members of the Polk County School District \r\nINDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED \r\nIN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS \r\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, units, each major fund, and the aggregate remaining fund information of the Polk County School District (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 July 15, 2019. \r\nInternal Control Over Financial Reporting \r\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. \r\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. \r\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. \r\n \r\n Compliance and Other Matters \r\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. \r\nPurpose of this Report \r\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. \r\nRespectfully submitted, \r\nGreg S. Griffin State Auditor \r\n \r\n Greg S. Griffin \r\nSTATE AUDITOR \r\n(404) 656-2174 \r\n \r\nDEPARTMENT OF AUDITS AND ACCOUNTS \r\n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \r\nJuly 15, 2019 \r\n \r\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 \r\nand Superintendent and Members of the Polk County School District \r\nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE \r\nReport on Compliance for Each Major Federal Program \r\nWe have audited the Polk County School District (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. \r\nManagement's Responsibility \r\nManagement is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. \r\nAuditor's Responsibility \r\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. \r\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. \r\n \r\n Opinion on Each Major Federal Program \r\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. \r\nReport on Internal Control over Compliance \r\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. \r\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. \r\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. \r\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. \r\nRespectfully submitted, \r\nGreg S. Griffin State Auditor \r\n \r\n SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS \r\n \r\n POLK COUNTY SCHOOL DISTRICT AUDITEE'S RESPONSE \r\nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2018 \r\nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\nNo matters were reported. \r\nPRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \r\nNo matters were reported. \r\n \r\n SECTION IV FINDINGS AND QUESTIONED COSTS \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2018 \r\n \r\nI SUMMARY OF AUDITOR'S RESULTS \r\n \r\nFinancial Statements \r\nType of auditor's report issue: Governmental Activities; General Fund; Capital Projects Fund; Debt Service Fund; Aggregate Remaining Fund Information \r\n \r\nUnmodified \r\n \r\nInternal control over financial reporting:  Material weakness identified?  Significant deficiency identified? \r\n \r\nNo None Reported \r\n \r\nNoncompliance material to financial statements noted: \r\n \r\nNo \r\n \r\nFederal Awards \r\n \r\nInternal Control over major programs:  Material weakness identified?  Significant deficiency identified? \r\n \r\nNo None Reported \r\n \r\nType of auditor's report issued on compliance for major programs: All major programs \r\n \r\nUnmodified \r\n \r\nAny audit findings disclosed that are required to be reported in \r\n \r\naccordance with 2 CFR 200.156(a)? \r\n \r\nNo \r\n \r\nIdentification of major programs: CFDA Numbers \r\n \r\nName of Federal Program or Cluster \r\n \r\n10.553, 10.555 \r\n \r\nChild Nutrition Cluster \r\n \r\nDollar threshold used to distinguish between Type A and Type B programs: \r\n \r\n$750,000.00 \r\n \r\nAuditee qualified as low-risk auditee? \r\n \r\nNo \r\n \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. \r\n \r\nIII FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. \r\n \r\n "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-be26-bp7-b2017-belec-p-btext","title":"Polk School District, Cedartown, 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":["2018-09-24"],"dcterms_description":["Annual financial report for the Polk 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":["Polk School District (Ga.)--Appropriations and expenditures--Periodicals.","Education--Georgia--Polk County--Auditing--Periodicals.","Education--Georgia--Polk County--Finance--Statistics--Periodicals.","Georgia Government Documents--Serial"],"dcterms_title":["Polk School District, Cedartown, 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-bp7-b2017-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-be26-bp7-b2017-belec-p-btext"],"dcterms_temporal":null,"dcterms_rights_holder":null,"dcterms_bibliographic_citation":null,"dlg_local_right":null,"dcterms_medium":["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":"POLK SCHOOL DISTRICT CEDARTOWN, GEORGIA \r\nANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED \r\nJUNE 30, 2017 (Including Independent Auditor's Reports) \r\n \r\n POLK COUNTY SCHOOL DISTRICT - TABLE OF CONTENTS - \r\n \r\nPage \r\n \r\nSECTION I \r\n \r\nFINANCIAL \r\n \r\nINDEPENDENT AUDITOR'S REPORT \r\n \r\nREQUIRED SUPPLEMENTARY INFORMATION \r\n \r\nMANAGEMENT'S DISCUSSION AND ANALYSIS \r\n \r\ni \r\n \r\nEXHIBITS \r\n \r\nBASIC FINANCIAL STATEMENTS \r\n \r\nGOVERNMENT-WIDE FINANCIAL STATEMENTS \r\n \r\nA \r\n \r\nSTATEMENT OF NET POSITION \r\n \r\n1 \r\n \r\nB \r\n \r\nSTATEMENT OF ACTIVITIES \r\n \r\n2 \r\n \r\nFUND FINANCIAL STATEMENTS \r\n \r\nC \r\n \r\nBALANCE SHEET \r\n \r\nGOVERNMENTAL FUNDS \r\n \r\n4 \r\n \r\nD \r\n \r\nRECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \r\n \r\nTO THE STATEMENT OF NET POSITION \r\n \r\n5 \r\n \r\nE \r\n \r\nSTATEMENT OF REVENUES, EXPENDITURES AND CHANGES \r\n \r\nIN FUND BALANCES \r\n \r\nGOVERNMENTAL FUNDS \r\n \r\n6 \r\n \r\nF \r\n \r\nRECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT \r\n \r\nOF REVENUES, EXPENDITURES AND CHANGES IN FUND \r\n \r\nBALANCES TO THE STATEMENT OF ACTIVITIES \r\n \r\n7 \r\n \r\nG \r\n \r\nSTATEMENT OF FIDUCIARY NET POSITION \r\n \r\nFIDUCIARY FUNDS \r\n \r\n8 \r\n \r\nH \r\n \r\nSTATEMENT OF CHANGES IN FIDUCIARY NET POSITION \r\n \r\nFIDUCIARY FUNDS \r\n \r\n9 \r\n \r\nI NOTES TO THE BASIC FINANCIAL STATEMENTS \r\n \r\n11 \r\n \r\nSCHEDULES \r\n \r\nREQUIRED SUPPLEMENTARY INFORMATION \r\n \r\n1 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY \r\n \r\nTEACHERS RETIREMENT SYSTEM OF GEORGIA \r\n \r\n41 \r\n \r\n2 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY \r\n \r\nEMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \r\n \r\n42 \r\n \r\n3 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY \r\n \r\nPUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA \r\n \r\n43 \r\n \r\n4 SCHEDULE OF CONTRIBUTIONS  TEACHERS RETIREMENT SYSTEM OF GEORGIA \r\n \r\n44 \r\n \r\n5 SCHEDULE OF CONTRIBUTIONS  EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA 45 \r\n \r\n6 SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS  \r\n \r\nSOCIAL SECURITY REPLACEMENT PLAN \r\n \r\n46 \r\n \r\n POLK COUNTY SCHOOL DISTRICT - TABLE OF CONTENTS - \r\n \r\nSECTION I \r\nFINANCIAL \r\nSCHEDULES \r\nREQUIRED SUPPLEMENTARY INFORMATION \r\n7 SCHEDULE OF CONTRIBUTIONS  SOCIAL SECURITY REPLACEMENT PLAN 8 SCHEDULE OF INVESTMENT RETURNS  SOCIAL SECURITY REPLACEMENT PLAN 9 NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION 10 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES \r\nIN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND \r\nSUPPLEMENTARY INFORMATION \r\n11 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 12 SCHEDULE OF STATE REVENUE 13 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \r\n \r\nPage \r\n47 48 49 50 \r\n51 52 53 \r\n \r\nSECTION II \r\nCOMPLIANCE AND INTERNAL CONTROL REPORTS \r\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 \r\nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE \r\n \r\nSECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS \r\n \r\nSECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\n \r\n SECTION I FINANCIAL \r\n \r\n GREG S. GRIFFIN \r\nSTATE AUDITOR \r\n(404) 656-2174 \r\n \r\nDEPARTMENT OF AUDITS AND ACCOUNTS \r\n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \r\nSeptember 24, 2018 \r\n \r\nThe Honorable Nathan Deal, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the State Board of Education \r\nand Superintendent and Members of the Polk County School District \r\nINDEPENDENT AUDITOR'S REPORT \r\nReport on the Financial Statements \r\nWe have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Polk County School District (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. \r\nManagement's Responsibility for the Financial Statements \r\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. \r\nAuditor's Responsibility \r\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. \r\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. \r\n \r\n We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. \r\nOpinions \r\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. \r\nEmphasis of Matter \r\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. \r\nOther Matters \r\nRequired Supplementary Information \r\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, Schedules 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 ix, and pages 41 through 50, 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. \r\nOther Information \r\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. \r\n \r\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. \r\nOther Reporting Required by Government Auditing Standards \r\nIn accordance with Government Auditing Standards, we have also issued our report dated September 24, 2018 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. \r\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. \r\nRespectfully submitted, \r\nGreg S. Griffin State Auditor \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2017 \r\nINTRODUCTION The intent of this discussion and analysis is to look at the Polk County School District's (School District) financial performance as a whole. The reader should review the notes to the basic financial statements and the financial statements to enhance their understanding of the School District's financial performance. The School District's financial statements for the fiscal year ended June 30, 2017 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 Position 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. The fund financial statements provide information about all of the School District's funds. FINANCIAL HIGHLIGHTS Key financial highlights for fiscal year 2017 are as follows: On the Government -wide financial statements: \r\n Government-wide net position at June 30, 2017 was approximately $33.5 million. Net position reflects the difference between all assets of the School District (including capital assets, net of depreciation), deferred outflows and all liabilities, both shortterm and long-term and deferred inflows. The net position at June 30, 2017 of $33.5 million represented an increase of approximately $7.1 m i l l i o n when compared to the prior year. This large increase is related to progress on the ongoing construction of the college and career centers. \r\n The School District had over $77.2 million in expenses relating to governmental activities; only $57.6 million of these expenses were offset by program specific charges for services, operating and capital grants and contributions. However, the general revenues (primarily property and sales taxes) of approximately $26.7 provided additional funding of these expenses. \r\n As stated above, general revenues accounted for $26.7 million or about 32% of all revenues totaling approximately $84.3 million. Program specific revenues in the form of charges for services, operating and capital grants, and contributions accounted for the balance of these revenues. \r\ni \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2017 \r\n0n the fund financial statements: \r\n Among major funds, the general fund had approximately $75.9 million in revenues and $73.2 million in expenditures. The general fund balance of approximately $11.8 million at June 30, 2017 increased by approximately $2.7 million from the prior year. \r\nOVERVIEW OF THE FINANCIAL STATEMENTS \r\nThis annual report consists of three parts; management's discussion and analysis (this section), the basic financial statements, including notes to the 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. \r\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 School District's overall financial status. \r\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 School District, the general fund, capital projects fund, and debt service fund are all considered to be major funds. The School District has no non-major funds as defined by GASB Statement No. 34 for purposes of this report. \r\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. \r\nGovernment-Wide Statements \r\nSince the School District has no operations that have been classified as \"Business Activities\", the government-wide financial statements are basically a consolidation of the entire School District's operating funds into one column called governmental activities. In reviewing the government-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 School District's assets, deferred outflows, liabilities, and deferred inflows 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. \r\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. \r\nii \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2017 \r\nWhen analyzing government-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: \r\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 \r\nthe accrual basis of accounting  Allocate net position as follows: \r\no Net Investment in Capital Assets o Restricted net position is that with constraints placed on the use by external sources \r\nsuch as creditors, grantors, contributors or laws and regulations. o Unrestricted net position is net position that does not meet any of the above \r\nrestrictions. \r\nFund Financial Statements \r\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 non-major funds as defined by generally accepted accounting principles. \r\nThe School District has two kinds of funds as discussed below: \r\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. \r\nFiduciary Funds  The School District is the trustee, or fiduciary, for assets that belong to clubs, organizations and others within the principals' accounts as well as an employer sponsored pension plan. 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 government-wide financial statements because it cannot use these assets to finance its operations. \r\nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT AS A WHOLE \r\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 School 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 decreases in the School \r\niii \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2017 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 non-financial factors should be considered in assessing the overall health of the School District. In the case of the School District, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by approximately $33.5 million at June 30, 2017. 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 $33.5 million of net position, about $5.4 million was restricted for continuation of Federal and State programs, debt service and capital projects. Accordingly, these funds were not available to meet the School District's ongoing obligations to citizens and creditors. In addition, the School District had approximately $83.0 million net investment 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 position, it must be recognized that this portion of the net position is not available for future spending. The deficit balance of unrestricted net position of approximately $54.9 million reflects the net pension liability adjustments as required by GASB Statement No. 68 and GASB Statement No. 71. \r\niv \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2017 \r\n \r\nTable 1 provides a summary of the School District's net position for this fiscal year as compared to the prior fiscal year. \r\nTable 1 Net Position \r\n \r\nGovernmental Activities \r\n \r\nFiscal \r\n \r\nFiscal \r\n \r\nYear 2017 \r\n \r\nYear 2016 \r\n \r\nAssets Current and Other Assets Capital Assets, Net \r\n \r\n$ 21,167,710 $ 24,263,984 \r\n \r\n94,623,642 \r\n \r\n86,223,526 \r\n \r\nTotal Assets \r\n \r\n115,791,352 \r\n \r\n110,487,510 \r\n \r\nDeferred Outflows of Resources Related to Defined Benefit Pension Plans \r\n \r\n18,037,523 \r\n \r\n5,987,253 \r\n \r\nLiabilities Current and Other Liabilities Long-Term Liabilities \r\n \r\n9,858,661 88,140,825 \r\n \r\n10,319,854 73,116,547 \r\n \r\nTotal Liabilities \r\n \r\n97,999,486 \r\n \r\n83,436,401 \r\n \r\nDeferred Inflows of Resources Related to Defined Benefit Pension Plans \r\n \r\n2,324,989 \r\n \r\n6,650,644 \r\n \r\nNet Position Net Investment in Capital Assets Restricted Unrestricted (Deficit) \r\n \r\n82,970,370 5,413,763 \r\n(54,879,732) \r\n \r\n71,487,458 4,758,543 \r\n(49,858,283) \r\n \r\nTotal Net Position \r\n \r\n$ 33,504,401 $ 26,387,718 \r\n \r\nv \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2017 \r\nTotal net position increased by approximately $7.1 million in fiscal year 2017 from the prior year. This change in net position is detailed in Table 2 below. Table 2 also shows the change in net position as compared to the prior fiscal year. \r\nTable 2 Change in Net Position \r\n \r\nRevenues Program Revenues: Charges for Services Operating Grants and Contributions Capital Grants and Contributions \r\nTotal Program Revenues \r\nGeneral Revenues: Taxes Property Taxes Sales Taxes Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous \r\nTotal General Revenues \r\nTotal Revenues \r\nProgram Expenses: Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Operations of Non-Instructional Services Enterprise Operations Food Services Interest on Short-Term and Long-Term Debt \r\nTotal Expenses \r\nIncrease in Net Position \r\n \r\nGovernmental Activities \r\n \r\nFiscal Year \r\n \r\nFiscal Year \r\n \r\n2017 \r\n \r\n2016 \r\n \r\n$ \r\n \r\n1,933,202 $ \r\n \r\n1,872,236 \r\n \r\n50,797,359 \r\n \r\n48,381,030 \r\n \r\n4,854,900 \r\n \r\n1,799,549 \r\n \r\n57,585,461 \r\n \r\n52,052,815 \r\n \r\n14,942,568 4,740,596 \r\n5,395,178 76,954 \r\n1,547,477 \r\n26,702,773 \r\n84,288,234 \r\n \r\n15,428,879 4,685,075 \r\n4,452,878 78,566 \r\n1,199,025 \r\n25,844,423 \r\n77,897,238 \r\n \r\n51,564,126 \r\n \r\n46,449,546 \r\n \r\n1,884,730 1,788,094 \r\n949,010 1,077,244 4,134,698 \r\n766,476 5,325,527 2,869,206 \r\n192,011 193,873 \r\n \r\n1,467,676 1,851,981 \r\n889,667 506,860 3,413,693 697,663 7,203,438 2,616,533 233,956 361,952 \r\n \r\n1,804,538 4,356,241 \r\n265,776 \r\n \r\n1,889,931 4,622,681 \r\n476,458 \r\n \r\n77,171,550 \r\n \r\n72,682,035 \r\n \r\n$ \r\n \r\n7,116,684 $ \r\n \r\n5,215,203 \r\n \r\nvi \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2017 \r\n \r\nCost of Providing Services \r\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. \r\n \r\nTable 3 Governmental Activities \r\n \r\nTotal Cost of Services \r\n \r\nFiscal \r\n \r\nFiscal \r\n \r\nYear 2017 \r\n \r\nYear 2016 \r\n \r\nNet Cost of Services \r\n \r\nFiscal \r\n \r\nFiscal \r\n \r\nYear 2017 \r\n \r\nYear 2016 \r\n \r\nInstruction \r\n \r\n$ \r\n \r\nSupport Services: \r\n \r\nPupil Services \r\n \r\nImprovement of Instructional Services \r\n \r\nEducational Media Services \r\n \r\nGeneral Administration \r\n \r\nSchool Administration \r\n \r\nBusiness Administration \r\n \r\nMaintenance and Operation of Plant \r\n \r\nStudent Transportation Services \r\n \r\nCentral Support Services \r\n \r\nOther Support Services \r\n \r\nOperations of Non-Instructional Services: \r\n \r\nEnterprise Operations \r\n \r\nFood Services \r\n \r\nInterest on Short-Term and Long-Term Debt \r\n \r\n51,564,126 $ \r\n1,884,730 1,788,094 \r\n949,010 1,077,244 4,134,698 \r\n766,476 5,325,527 2,869,206 \r\n192,011 193,873 \r\n1,804,538 4,356,241 \r\n265,776 \r\n \r\n46,449,546 $ 10,446,203 $ 10,724,016 \r\n \r\n1,467,676 1,851,981 \r\n889,667 506,860 3,413,693 697,663 7,203,438 2,616,533 233,956 361,952 \r\n \r\n1,092,955 604,154 (31,099) (143,947) \r\n2,118,844 757,735 \r\n2,908,111 1,880,768 \r\n189,792 146,015 \r\n \r\n933,359 323,760 (91,072) (703,095) 1,426,114 691,521 4,868,895 1,545,891 230,197 \r\n78,130 \r\n \r\n1,889,931 4,622,681 \r\n476,458 \r\n \r\n1,230 (650,448) 265,776 \r\n \r\n149,065 (24,020) 476,458 \r\n \r\nTotal Expenses \r\n \r\n$ 77,171,550 $ 72,682,035 $ 19,586,089 $ 20,629,219 \r\n \r\nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT'S FUNDS \r\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 and other financing sources over $85.6 million and total expenditures and other financing uses of $88.4 million in fiscal year 2017. Total governmental fund balances of approximately $10.1 million at June 30, 2017, decreased approximately $2.8 million from the prior year. \r\n \r\nGeneral Fund Budget Highlights \r\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 2017, the School District amended its general fund budget as needed. \r\n \r\nvii \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2017 \r\n \r\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. \r\nFor the general fund, the final actual revenues of $75.9 million were greater than the final budgeted amount of $66.1 million by approximately $9.8. This can be primarily attributed to receiving more property taxes, federal funds, charges for services, and miscellaneous income than originally expected. \r\nThe general fund's final actual expenditures of $73.2 million were less than the final budget amount of $79.0 million by approximately $5.8 million. The School District believes it effectively managed its budget during the fiscal year. \r\n \r\nCAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets \r\n \r\nAt fiscal year ended June 30, 2017, the School District had over $94.6 million invested in capital assets, net of accumulated depreciation, all in governmental activities. These assets are made up of a broad range of items including buildings; land; land improvements; and food service, transportation and maintenance equipment. Table 4 reflects a summary of these balances, net of accumulated depreciation, as compared to the prior fiscal year. \r\n \r\nTable 4 Capital Assets (Net of Depreciation) \r\n \r\nGovernmental Activities \r\n \r\nFiscal \r\n \r\nFiscal \r\n \r\nYear 2017 \r\n \r\nYear 2016 \r\n \r\nLand Construction In Progress Building and Improvements Equipment Land Improvements \r\n \r\n$ 2,275,175 $ 2,275,175 \r\n \r\n13,402,571 \r\n \r\n11,473,178 \r\n \r\n76,848,636 \r\n \r\n70,089,918 \r\n \r\n772,852 \r\n \r\n1,003,575 \r\n \r\n1,324,408 \r\n \r\n1,381,680 \r\n \r\nTotal \r\n \r\n$ 94,623,642 $ 86,223,526 \r\n \r\nAdditional information about the School District's capital assets can be found in the Notes to the Basic Financial Statements \r\n \r\nviii \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2017 \r\n \r\nDebt Administration \r\n \r\nAt June 30, 2017, the School District had $12.1 million in bonds outstanding with $2.45 million due within one year and $418 thousand in capital leases outstanding and due in one year. \r\nTable 5 Debt at June 30 \r\n \r\nGeneral Obligation Bonds Capital Leases \r\n \r\nGovernmental Activities \r\n \r\nFiscal \r\n \r\nFiscal \r\n \r\nYear 2017 \r\n \r\nYear 2016 \r\n \r\n$ 12,090,000 $ 14,500,000 \r\n \r\n418,022 \r\n \r\n833,747 \r\n \r\nTotal \r\n \r\n$ 12,508,022 $ 15,333,747 \r\n \r\nNet Pension Liabilities \r\n \r\nAt June 30, 2017 the School District reported liabilities for its proportionate share of the net pension liability. Reporting this liability was required by GASB No. 68 and GASB No. 71. \r\n \r\nFACTORS BEARING ON THE DISTRICT'S FUTURE \r\n \r\nCurrently known circumstances that are expected to have a significant effect on financial position or results of operations in future years are as follows: \r\n \r\n The School District is financially stable. The School District's operating millage for fiscal year 2016 was 16.183. It was rolled back in fiscal year 2017 to 16.151. \r\n The School District is in excellent financial condition. The general fund had a fund balance as of June 30, 2017 of $11.8 million, which is up $2.7 million from the prior year. In fiscal year 2017, $5,582,992 was loaned from the general fund to the capital projects fund to complete the construction of the Polk County College and Career Academy. The inter-fund loan will be paid back in future years with excess Special Purpose Local Option Sales Tax proceeds. \r\n The School District is financially challenged by the State's continuing reduction of state revenue appropriations to local school districts. However, the School District is scheduled to receive a $1,593,810 increase of state revenue for fiscal year 2018. \r\n The School District will continue to renovate the existing facilities to accommodate future growth as needed. The School District plans to fund additional capital outlays with the one percent local sales tax revenue, general obligation bonds and state capital outlay grant. An fine arts building will be constructed at Cedartown High School. An agricultural building will be constructed on the Rockmart High Campus. Technology upgrades will also be made. Also, additions and modifications will be done as needed. \r\n \r\nCONTACTING THE SCHOOL DISTRICT'S FINANCIAL MANAGEMENT \r\n \r\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 Mrs. Tammy McDonald, Chief Financial Officer, Polk County School District, 612 South College Street, Cedartown, Georgia 30125. You may also email your questions to Mrs. McDonald at tammy@polk.k12.ga.us. \r\n \r\nix \r\n \r\n POLK COUNTY SCHOOL DISTRICT \r\n \r\n POLK COUNTY SCHOOL DISTRICT STATEMENT OF NET POSITION JUNE 30, 2017 \r\nASSETS \r\nCash and Cash Equivalents Investments Receivables, Net \r\nTaxes State Government Federal Government Other Inventories Restricted Assets Investments with Fiscal Agent or Trustee Capital Assets, Non-Depreciable Capital Assets, Depreciable (Net of Accumulated Depreciation) \r\nTotal Assets \r\nDEFERRED OUTFLOWS OF RESOURCES \r\nRelated to Defined Benefit Pension Plans \r\nLIABILITIES \r\nAccounts Payable Salaries and Benefits Payable Interest Payable Contracts Payable Retainages Payable Net Pension Liability Long-Term Liabilities \r\nDue Within One Year Due in More Than One Year \r\nTotal Liabilities \r\nDEFERRED INFLOWS OF RESOURCES \r\nRelated to Defined Benefit Pension Plans \r\nNET POSITION \r\nNet Investment in Capital Assets Restricted for \r\nContinuation of Federal Programs Debt Service Continuation of State Programs Unrestricted (Deficit) \r\nTotal Net Position \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\nEXHIBIT \"A\" \r\n \r\nGOVERNMENTAL ACTIVITIES \r\n \r\n$ \r\n \r\n9,553,452.98 \r\n \r\n10,693.27 \r\n \r\n2,144,938.54 6,360,688.47 1,048,687.87 \r\n286,667.36 116,007.08 \r\n \r\n1,646,575.32 15,677,745.89 78,945,896.13 \r\n \r\n115,791,352.91 \r\n \r\n18,037,523.36 \r\n \r\n615,758.33 8,081,370.15 \r\n113,775.00 20,349.03 \r\n1,027,408.70 74,557,748.00 \r\n3,098,107.11 10,484,969.59 \r\n97,999,485.91 \r\n \r\n2,324,989.00 \r\n \r\n82,970,369.70 \r\n1,612,644.45 3,800,506.94 \r\n612.08 (54,879,731.81) \r\n \r\n$ 33,504,401.36 \r\n \r\n- 1 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT STATEMENT OF ACTIVITIES \r\nFOR THE YEAR ENDED JUNE 30, 2017 \r\n \r\nGOVERNMENTAL ACTIVITIES \r\nInstruction Support Services \r\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 \r\nTotal Governmental Activities \r\nGeneral Revenues Taxes Property Taxes For Maintenance and Operations Other Taxes 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 \r\nTotal General Revenues \r\nChange in Net Position \r\nNet Position - Beginning of Year \r\nNet Position - End of Year \r\n \r\nEXPENSES \r\n \r\nCHARGES FOR SERVICES \r\n \r\n$ 51,564,125.63 $ \r\n1,884,729.65 1,788,093.72 \r\n949,010.45 1,077,243.73 4,134,698.47 \r\n766,476.13 5,325,526.69 2,869,206.45 \r\n192,011.14 193,872.76 \r\n1,804,538.14 4,356,241.07 \r\n265,776.27 \r\n$ 77,171,550.30 $ \r\n \r\n59,134.36 \r\n- \r\n1,803,307.69 70,759.76 - \r\n1,933,201.81 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 2 - \r\n \r\n EXHIBIT \"B\" \r\n \r\nPROGRAM REVENUES OPERATING GRANTS AND \r\nCONTRIBUTIONS \r\n \r\nCAPITAL GRANTS AND CONTRIBUTIONS \r\n \r\nNET (EXPENSES) REVENUES \r\nAND CHANGES IN NET POSITION \r\n \r\n$ 36,303,212.43 $ \r\n791,775.06 1,183,939.38 \r\n980,110.01 1,221,190.36 2,015,854.49 \r\n8,741.24 2,417,415.56 \r\n988,438.99 2,218.95 8,881.44 \r\n4,875,581.34 \r\n- \r\n$ 50,797,359.25 $ \r\n \r\n4,755,575.98 $ \r\n38,976.07 \r\n60,348.25 \r\n- \r\n4,854,900.30 \r\n \r\n(10,446,202.86) \r\n(1,092,954.59) (604,154.34) 31,099.56 143,946.63 \r\n(2,118,843.98) (757,734.89) \r\n(2,908,111.13) (1,880,767.46) \r\n(189,792.19) (146,015.25) \r\n(1,230.45) 650,448.28 (265,776.27) \r\n(19,586,088.94) \r\n \r\n14,895,359.62 47,208.39 \r\n4,541,510.53 199,085.15 \r\n5,395,178.00 76,954.34 \r\n1,547,476.66 \r\n26,702,772.69 \r\n7,116,683.75 \r\n26,387,717.61 \r\n \r\n$ \r\n \r\n33,504,401.36 \r\n \r\n- 3 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT BALANCE SHEET \r\nGOVERNMENTAL FUNDS JUNE 30, 2017 \r\n \r\nEXHIBIT \"C\" \r\n \r\nASSETS \r\nCash and Cash Equivalents Investments Receivables, Net \r\nTaxes State Government Federal Government Other Due from Other Funds Inventories Restricted Investments with a Fiscal Agent or Trustee \r\n \r\nGENERAL FUND \r\n \r\nCAPITAL PROJECTS \r\nFUND \r\n \r\nDEBT SERVICE \r\nFUND \r\n \r\nTOTAL \r\n \r\n$ 6,664,367.85 $ 1,021,097.44 $ 1,867,987.69 $ 9,553,452.98 \r\n \r\n10,693.27 \r\n \r\n- \r\n \r\n- \r\n \r\n10,693.27 \r\n \r\n1,745,219.61 6,360,688.47 1,048,687.87 \r\n277,755.36 5,582,991.96 \r\n116,007.08 \r\n \r\n8,912.00 - \r\n \r\n399,718.93 - \r\n \r\n2,144,938.54 6,360,688.47 1,048,687.87 \r\n286,667.36 5,582,991.96 \r\n116,007.08 \r\n \r\n- \r\n \r\n- \r\n \r\n1,646,575.32 \r\n \r\n1,646,575.32 \r\n \r\nTotal Assets \r\nLIABILITIES \r\nAccounts Payable Salaries and Benefits Payable Due to Other Funds Contracts Payable Retainages Payable \r\nTotal Liabilities \r\nDEFERRED INFLOWS OF RESOURCES \r\nUnavailable Revenue - Property Taxes \r\nFUND BALANCES \r\nNonspendable Restricted Assigned Unassigned \r\nTotal Fund Balances \r\n \r\n$ 21,806,411.47 $ 1,030,009.44 $ 3,914,281.94 $ 26,750,702.85 \r\n \r\n$ \r\n \r\n612,752.08 $ \r\n \r\n3,006.25 $ \r\n \r\n8,081,370.15 \r\n \r\n- \r\n \r\n- \r\n \r\n5,582,991.96 \r\n \r\n- \r\n \r\n20,349.03 \r\n \r\n- \r\n \r\n1,027,408.70 \r\n \r\n8,694,122.23 \r\n \r\n6,633,755.94 \r\n \r\n- $ \r\n \r\n615,758.33 \r\n \r\n- \r\n \r\n8,081,370.15 \r\n \r\n- \r\n \r\n5,582,991.96 \r\n \r\n- \r\n \r\n20,349.03 \r\n \r\n- \r\n \r\n1,027,408.70 \r\n \r\n- \r\n \r\n15,327,878.17 \r\n \r\n1,335,275.37 \r\n \r\n- \r\n \r\n- \r\n \r\n1,335,275.37 \r\n \r\n116,007.08 1,497,249.45 \r\n568,124.05 9,595,633.29 \r\n11,777,013.87 \r\n \r\n(5,603,746.50) \r\n(5,603,746.50) \r\n \r\n3,914,281.94 \r\n- \r\n3,914,281.94 \r\n \r\n116,007.08 5,411,531.39 \r\n568,124.05 3,991,886.79 \r\n10,087,549.31 \r\n \r\nTotal Liabilities, Deferred Inflows of Resources, and Fund Balances \r\n \r\n$ 21,806,411.47 $ 1,030,009.44 $ 3,914,281.94 $ 26,750,702.85 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 4 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \r\nTO THE STATEMENT OF NET POSITION JUNE 30, 2017 \r\n \r\nEXHIBIT \"D\" \r\n \r\nTotal fund balances - governmental funds (Exhibit \"C\") \r\nAmounts reported for governmental activities in the Statement of Net Position are different because: \r\nCapital assets used in governmental activities are not financial resources and therefore are not reported in the funds. \r\nLand Construction in progress Buildings and improvements Equipment Land improvements Accumulated depreciation \r\nSome liabilities are not due and payable in the current period and, therefore, are not reported in the funds. \r\nNet pension liability \r\nDeferred outflows and inflows of resources related to pensions are applicable to future periods and, therefore, are not reported in the funds. \r\nTaxes that are not available to pay for current period expenditures are deferred in the funds. \r\nLong-term liabilities, and related accrued interest, are not due and payable in the current period and therefore are not reported in the funds. \r\nBonds payable Accrued interest payable Capital leases payable Compensated absences payable Unamortized bond premiums \r\nNet position of governmental activities (Exhibit \"A\") \r\n \r\n$ 10,087,549.31 \r\n \r\n$ 2,275,174.50 13,402,571.39 \r\n101,303,245.95 4,794,118.70 2,594,719.05 \r\n(29,746,187.57) \r\n \r\n94,623,642.02 \r\n \r\n(74,557,748.00) 15,712,534.36 \r\n1,335,275.37 \r\n \r\n$ (12,090,000.00) (113,775.00) (418,022.42) (154,715.52) (920,338.76) \r\n \r\n(13,696,851.70) \r\n \r\n$ 33,504,401.36 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 5 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES \r\nGOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2017 \r\n \r\nEXHIBIT \"E\" \r\n \r\nREVENUES \r\nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous \r\nTotal Revenues \r\nEXPENDITURES \r\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 \r\nCapital Outlay Debt Services \r\nPrincipal Dues and Fees Interest \r\nTotal Expenditures \r\nRevenues over (under) Expenditures \r\nOTHER FINANCING SOURCES (USES) \r\nTransfers In Transfers Out \r\nTotal Other Financing Sources (Uses) \r\nNet Change in Fund Balances \r\nFund Balances - Beginning \r\nFund Balances - Ending \r\n \r\nGENERAL FUND \r\n \r\nCAPITAL PROJECTS \r\nFUND \r\n \r\nDEBT SERVICE \r\nFUND \r\n \r\nTOTAL \r\n \r\n$ 14,765,513.67 $ 199,085.15 \r\n48,288,322.26 9,174,287.69 1,933,201.81 5,686.01 1,547,476.66 \r\n75,913,573.25 \r\n \r\n- $ 3,510,761.11 2,021.86 - \r\n3,512,782.97 \r\n \r\n- $ 4,541,510.53 \r\n69,246.47 - \r\n \r\n14,765,513.67 4,740,595.68 \r\n51,799,083.37 9,174,287.69 1,933,201.81 76,954.34 1,547,476.66 \r\n \r\n4,610,757.00 \r\n \r\n84,037,113.22 \r\n \r\n48,270,953.67 \r\n1,849,633.92 1,754,551.14 \r\n921,154.20 984,369.32 4,024,375.12 742,583.71 5,318,216.58 2,575,926.80 188,503.72 163,581.56 1,804,538.14 4,301,036.88 \r\n- \r\n297,942.54 - \r\n2,481.35 \r\n73,199,848.65 \r\n2,713,724.60 \r\n \r\n20,985.66 \r\n14,124.97 10,584,971.26 \r\n117,781.75 806.25 \r\n2,129.61 \r\n10,740,799.50 \r\n(7,228,016.53) \r\n \r\n- \r\n7,350.00 - \r\n2,410,000.00 - \r\n503,300.00 \r\n2,920,650.00 \r\n1,690,107.00 \r\n \r\n48,291,939.33 \r\n1,849,633.92 1,754,551.14 \r\n921,154.20 991,719.32 4,024,375.12 742,583.71 5,332,341.55 2,575,926.80 188,503.72 163,581.56 1,804,538.14 4,301,036.88 10,584,971.26 \r\n2,825,724.29 806.25 \r\n507,910.96 \r\n86,861,298.15 \r\n(2,824,184.93) \r\n \r\n- \r\n2,713,724.60 9,063,289.27 \r\n \r\n1,566,914.36 - \r\n1,566,914.36 \r\n(5,661,102.17) 57,355.67 \r\n \r\n(1,566,914.36) \r\n(1,566,914.36) \r\n \r\n1,566,914.36 (1,566,914.36) \r\n- \r\n \r\n123,192.64 3,791,089.30 \r\n \r\n(2,824,184.93) 12,911,734.24 \r\n \r\n$ 11,777,013.87 $ (5,603,746.50) $ \r\n \r\n3,914,281.94 $ 10,087,549.31 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 6 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF \r\nREVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2017 \r\n \r\nEXHIBIT \"F\" \r\n \r\nNet change in fund balances total governmental funds (Exhibit \"E\") \r\nAmounts reported for governmental activities in the Statement of Activities are different because: \r\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. \r\nCapital outlay Depreciation expense \r\nTaxes reported in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. \r\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. \r\nAmortization of bond premium Bond principal retirements Capital lease payments \r\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. \r\nPension expense \r\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. \r\nAccrued interest on issuance of bonds Compensated absences \r\nChange in net position of governmental activities (Exhibit \"B\") \r\n \r\n$ (2,824,184.93) \r\n \r\n$ 10,573,368.03 (2,173,251.77) \r\n \r\n8,400,116.26 \r\n \r\n177,054.34 \r\n \r\n$ \r\n \r\n230,084.69 \r\n \r\n2,410,000.00 \r\n \r\n415,724.29 \r\n \r\n3,055,808.98 \r\n \r\n(1,686,999.50) \r\n \r\n$ \r\n \r\n12,050.00 \r\n \r\n(17,161.40) \r\n \r\n(5,111.40) \r\n \r\n$ 7,116,683.75 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 7 - \r\n \r\n ASSETS Cash and Cash Equivalents Investments \r\nTotal Assets LIABILITIES Due to Broker Funds Held for Others NET POSITION Employee's Pension Benefits Held in Trust for Private Purposes \r\n \r\nPOLK COUNTY SCHOOL DISTRICT STATEMENT OF FIDUCIARY NET POSITION \r\nFIDUCIARY FUNDS JUNE 30, 2017 \r\n \r\nEXHIBIT \"G\" \r\n \r\nPRIVATE PURPOSE TRUSTS \r\n \r\nAGENCY FUNDS \r\n \r\nPENSION TRUST FUND \r\nDECEMBER 31, 2016 \r\n \r\n$ \r\n \r\n9,710.72 $ 119,350.46 $ \r\n \r\n- \r\n \r\n- \r\n \r\n359,161.00 3,415,577.00 \r\n \r\n$ \r\n \r\n9,710.72 $ 119,350.46 $ \r\n \r\n3,774,738.00 \r\n \r\n$ \r\n \r\n- $ \r\n \r\n$ 119,350.46 \r\n \r\n1,113.00 - \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n9,710.72 \r\n \r\n$ \r\n \r\n3,773,625.00 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 8 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT STATEMENT OF CHANGES IN FIDUCIARY NET POSITION \r\nFIDUCIARY FUNDS YEAR ENDED JUNE 30, 2017 \r\n \r\nEXHIBIT \"H\" \r\n \r\nADDITIONS Contributions Employer Contributions Investment Earnings Net Increase in Fair Value of Investments Interest Total Investment Earnings Other Additions Total Additions \r\nDEDUCTIONS Administrative Expenses Benefits Paid to Participants Total Deductions Change in Net Position \r\nNet Position - Beginning \r\nNet Position - Ending \r\n \r\nPRIVATE PURPOSE TRUSTS \r\n \r\nPENSION TRUST FUND \r\nDECEMBER 31, 2016 \r\n \r\n$ \r\n \r\n- $ \r\n \r\n2,000.00 2,000.00 \r\n \r\n349,969.00 \r\n231,939.52 5,688.00 \r\n237,627.52 - \r\n587,596.52 \r\n \r\n705.89 705.89 1,294.11 8,416.61 \r\n \r\n21,220.00 321,825.00 343,045.00 244,551.52 3,529,073.48 \r\n \r\n$ \r\n \r\n9,710.72 $ \r\n \r\n3,773,625.00 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n \r\n- 9 - \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2017 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY \r\nREPORTING ENTITY \r\nThe Polk County School District (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. \r\nNOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES \r\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. \r\nBASIS OF PRESENTATION \r\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. \r\nGOVERNMENT-WIDE STATEMENTS: \r\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. \r\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: \r\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. \r\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. \r\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. \r\nThe Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities. \r\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. \r\n \r\n- 11 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2017 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\nFUND FINANCIAL STATEMENTS \r\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. \r\nThe School District reports the following major governmental funds: \r\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. \r\n The capital projects fund accounts for and reports financial resources including Education Special Purpose Local Option Sales Tax (ESPLOST), College and Career Academy Funds and grants from Georgia State Financing and Investment Commission that are restricted, committed or assigned for capital outlay expenditures, including the acquisition or construction of capital facilities and other capital assets. \r\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. \r\nThe School District reports the following fiduciary fund types: \r\n Private purpose trust funds are used to report trust arrangements under which income is to be used for the purpose of clothing and medical needs for disadvantaged students at the Superintendent's discretion and a scholarship for a student graduating from Rockmart High School. \r\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. \r\n Pension trust fund accounts for the activities of Polk County School District Social Security \r\nReplacement Plan, a single employer defined benefit pension plan for the group of employees covered by the Public School Employees Retirement System (PSERS). \r\nBASIS OF ACCOUNTING \r\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. \r\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. \r\n \r\n- 12 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2017 \r\n \r\nEXHIBIT \"I\" \r\n \r\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 and compensated absences, 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. \r\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 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. \r\nNEW ACCOUNTING PRONOUNCEMENTS \r\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. See note 15 for further disclosure of tax abatements in accordance with this standard. \r\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. \r\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. \r\n \r\n- 13 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2017 \r\n \r\nEXHIBIT \"I\" \r\n \r\nFISCAL YEAR END \r\nAll funds are reported using fiscal years which end on June 30, except the defined benefit pension plan (fiduciary fund), which has a fiscal year ending December 31. \r\nCASH AND CASH EQUIVALENTS \r\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. \r\nINVESTMENTS \r\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. \r\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. \r\nFor accounting purposes, certificates of deposit are classified as investments if they have an original maturity greater than three months when acquired. \r\nRECEIVABLES \r\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. \r\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. \r\nINVENTORIES \r\nFood Inventories \r\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. \r\nRESTRICTED ASSETS \r\nCertain resources set aside for repayment of debt are classified as restricted assets on the Statement of Net Position because their use is limited by applicable debt statutes, e.g. Qualified Zone Academy Bond sinking funds. \r\nCAPITAL ASSETS \r\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 \r\n- 14 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2017 \r\n \r\nEXHIBIT \"I\" \r\n \r\nacquisition 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. \r\n \r\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. \r\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. \r\n \r\nCapitalization thresholds and estimated useful lives of capital assets reported in the government-wide statements are as follows: \r\n \r\nCapitalization Policy \r\n \r\nEstimated Useful Life \r\n \r\nLand Land Improvements Buildings and Improvements Equipment Intangible Assets \r\n \r\nALL $50,000.00 $50,000.00 $50,000.00 $50,000.00 \r\n \r\nN/A 20 to 60 years 25 to 60 years \r\n5 to 50 years 10 to 20 years \r\n \r\nDEFERRED OUTFLOWS/INFLOWS OF RESOURCES \r\n \r\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. \r\n \r\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. \r\n \r\nCOMPENSATED ABSENCES \r\n \r\nCompensated absences payable consists of vacation leave employees earned based on services already rendered. \r\n \r\nVacation leave of 10 days is awarded annually to all full time personnel employed on a twelve month basis with less than 15 years of experience and 15 days annually to all full time personnel employed on a twelve month basis with between 15 and 40 years of experience. Twelve month employees with 40 or more years of service to the School District are eligible for 5 additional vacation days annually. No other employees are eligible to earn vacation leave. \r\n \r\nFor twelve-month employees with 15 or more years of experience, all unused vacation days may be carried forward into the next employment year up to and including June 30. This is a maximum of 15 days earned from previous year. Upon expiration of this limit, a maximum of 5 unused vacation days may be carried forward. Therefore, this employee could have a maximum of 20 days of acquired vacation at the start of a new fiscal year. \r\n \r\nFor twelve-month employees with less than 15 years of experience, all unused vacation days may be carried forward into the next employment year up to and including June 30. This is a maximum of 10 days earned from previous year. Upon expiration of this limit, a maximum of 5 unused vacation days may be carried forward. Therefore, this employee could have a maximum of 15 days of acquired vacation at the start of a new fiscal year. \r\n \r\n- 15 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2017 \r\n \r\nEXHIBIT \"I\" \r\n \r\nUpon terminating employment, the School District pays all unused and unforfeited vacation benefits to employees. Accordingly, vacation benefits are accrued as a liability in the government-wide financial statements. A liability for these amounts is reported in the governmental fund financial statements only if they have matured, for example, as a result of employee resignations and retirements by fiscalyear end. \r\nMembers of the Teachers Retirement System of Georgia (TRS) may apply unused sick leave toward early retirement. The liability for early retirement will be borne by TRS rather than by the individual School Districts. Otherwise, sick leave does not vest with the employee, and no liability is reported in the School District's financial statements. \r\nLONG-TERM LIABILITIES AND BOND DISCOUNTS/PREMIUMS \r\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. \r\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. \r\nPENSIONS \r\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. \r\nFUND BALANCES \r\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. \r\nThe School District's fund balances are classified as follows: \r\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. \r\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. \r\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. \r\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. \r\n- 16 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2017 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\nUSE OF ESTIMATES \r\n \r\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. \r\nPROPERTY TAXES \r\n \r\nThe Polk County Board of Commissioners adopted the property tax levy for the 2016 tax digest year (calendar year) on August 8, 2016 (levy date) based on property values as of January 1, 2016. Taxes were due on December 1, 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 Polk 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 $13,590,575.26. \r\n \r\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): \r\n \r\nSchool Operations \r\n \r\n16.151 mills \r\n \r\nAdditionally, Title Ad Valorem Tax revenues, at the fund reporting level, amounted to $1,127,730.02 during fiscal year ended June 30, 2017. \r\nSALES TAXES \r\nEducation Special Purpose Local Option Sales Tax (ESPLOST), at the fund reporting level, during the year amounted to $4,541,510.53 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. \r\nNOTE 3: BUDGETARY DATA \r\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, 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. \r\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. \r\n \r\n- 17 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2017 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\nNOTE 4: DEPOSITS, CASH EQUIVALENTS AND INVESTMENTS \r\nCOLLATERALIZATION OF DEPOSITS \r\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, $109,161.13 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 \r\nAcceptable security for deposits consists of any one of or any combination of the following: \r\n(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, \r\n(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, \r\n(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia, \r\n(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, \r\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, \r\n(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and \r\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. \r\nCATEGORIZATION OF DEPOSITS \r\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, School District had deposits with a carrying amount of $8,112,833.14, and a bank balance of $11,256,201.43. The bank balances insured by Federal depository insurance were $955,641.47 and the bank balances collateralized with securities held by the pledging financial institution in the School District's name were $31,606.14. \r\n \r\n- 18 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2017 \r\n \r\nEXHIBIT \"I\" \r\n \r\nAt June 30, 2017, $10,268,953.82 of the School District's bank balance was exposed to custodial credit risk as follows: \r\n \r\nUninsured and Uncollateralized Uninsured with collateral held by the pledging \r\nfinancial institution Uninsured with collateral held by the pledging \r\nfinancial institution's trust department or agent but not in the School District's name \r\n \r\n$ \r\n \r\n109,161.13 \r\n \r\n- \r\n \r\n10,159,792.69 \r\n \r\nTotal \r\n \r\n$ 10,268,953.82 \r\n \r\nReconciliation of cash and cash equivalents balances to carrying value of deposits: \r\n \r\nStatement of Net Position Cash and cash equivalents \r\nStatement of Fiduciary Net Position Cash and cash equivalents \r\n \r\n$ 9,553,452.98 488,222.18 \r\n \r\nTotal cash and cash equivalents \r\n \r\n10,041,675.16 \r\n \r\nAdd: Deposits with original maturity of three months or more reported as investments \r\nLess: Investment pools reported as cash and cash equivalents \r\nGeorgia Fund 1 \r\n \r\n10,693.27 1,939,535.29 \r\n \r\nTotal carrying value of deposits - June 30, 2017 \r\n \r\n$ 8,112,833.14 \r\n \r\nCATEGORIZATION OF CASH EQUIVALENTS \r\nThe School District reported cash equivalents of $1,939,535.29 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, $1.00 per share, which approximates fair value. The pool is an AAAf rated investment pool by Standard and Poor's. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2017, was 56 days. \r\nGeorgia Fund 1, administered by the State of Georgia, Office of the State Treasurer, is not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office of the State Treasurer for the Georgia Fund 1, does not provide for investment in derivatives or similar investments. Additional information on the Georgia Fund 1 is disclosed in the State of Georgia Comprehensive Annual Financial Report. This audit can be obtained from the Georgia Department of Audits and Accounts at www.audits.ga.gov/SGD/CAFR.html. \r\n \r\n- 19 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2017 \r\n \r\nEXHIBIT \"I\" \r\n \r\nCATEGORIZATION OF INVESTMENTS At June 30, 2017, the School District had the following investments: \r\n \r\nInvestment Type \r\n \r\nFair Value \r\n \r\nInvestment Maturity Less Than 1 Year \r\n \r\nDebt Securities U. S. Agencies Implicitly Guaranteed \r\n \r\n$ 1,646,575.32 $ 1,646,575.32 \r\n \r\nOther Investments Bond Mutual Funds Equity Mutual Funds \r\n \r\n1,453,189.00 1,962,388.00 \r\n \r\nTotal Investments \r\n \r\n$ 5,062,152.32 \r\n \r\nFair Value of Investments \r\n \r\nThe School District measures and records its investments using fair value measurement guidelines established by generally accepted accounting principles. These guidelines recognize a three-tiered fair value hierarchy, as follows: \r\n \r\nLevel 1: Quoted prices for identical measurements in active markets; \r\n \r\nLevel 2: Observable inputs other than quoted market prices; and, \r\n \r\nLevel 3: Unobservable inputs. \r\n \r\nAt June 30, the School District had the following investments by fair value level: \r\n \r\nInvestments by fair value level: \r\n \r\nFair Value \r\n \r\nLevel 1 \r\n \r\nLevel 2 \r\n \r\nU. S. Agencies Implicitly Guaranteed \r\nMutual Bond Funds Equity Mutual Funds - Domestic Equity Mutual Funds - International \r\n \r\n$ 1,646,575.32 $ \r\n \r\n- $ 1,646,575.32 \r\n \r\n1,453,189.00 \r\n \r\n1,453,189.00 \r\n \r\n- \r\n \r\n1,796,618.00 \r\n \r\n1,796,618.00 \r\n \r\n- \r\n \r\n165,770.00 \r\n \r\n165,770.00 \r\n \r\n- \r\n \r\nTotal investments by fair value level \r\n \r\n$ 5,062,152.32 $ 3,415,577.00 $ 1,646,575.32 \r\n \r\nInterest Rate Risk \r\nInterest rate risk is the risk that changes in interest rates of debt investment will adversely affect the fair value of an investment. The School District does not have a formal policy for managing interest rate risk. \r\nCustodial Credit Risk \r\nCustodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, the School District will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The School District does not have a formal policy for managing custodial credit risk. \r\nAt June 30, 2017, $3,415,577.00 of the School District's applicable investments were held by the investment's counterparty, not in the School District's name. \r\n \r\n- 20 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2017 \r\n \r\nEXHIBIT \"I\" \r\n \r\nCredit Quality Risk \r\nCredit quality risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. State law limits investments to those prescribed O.C.G.A. 36-83-4. The School District does not have a formal policy that would further limit its investment choices or one that addresses credit risk. \r\n \r\nThe investments subject to credit quality risk are reflected below: \r\n \r\nRated Debt Investments \r\n \r\nFair Value \r\n \r\nQuality Ratings \r\n \r\nAAA \r\n \r\nUnrated \r\n \r\nDebt Securities U. S. Agencies Implicitly Guaranteed Mutual Bond Fund \r\n \r\n$ 1,646,575.32 $ 1,646,575.32 $ \r\n \r\n- \r\n \r\n1,453,189.00 \r\n \r\n- \r\n \r\n1,453,189.00 \r\n \r\nTotals by Quality Ratings $ 3,099,764.32 $ 1,646,575.32 $ 1,453,189.00 \r\n \r\nConcentration of Credit Risk \r\nConcentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The School District does not have a formal policy for managing concentration of credit risk. More than 5% of the School District's investments are in Mutual Equity Funds, Mutual Bond Funds and Federal National Mortgage Association (FNMA) Discount Note. These investments are 39%, 29%, and 32%, respectively, of the School District's total investments. \r\nNOTE 5: RESTRICTED ASSETS \r\nCertain resources set aside for repayment of debt are classified as restricted assets on the Statement of Net Position because their use is limited by applicable debt statutes, e.g. Qualified Zone Academy Bond (QZAB) Sinking Funds. \r\n \r\n- 21 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2017 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 6: CAPITAL ASSETS \r\n \r\nThe following is a summary of changes in the capital assets for governmental activities during the fiscal year: \r\n \r\nBalances July 1, 2016 \r\n \r\nIncreases \r\n \r\nDecreases \r\n \r\nBalances June 30, 2017 \r\n \r\nGovernmental Activities Capital Assets, Not Being Depreciated: \r\nLand Construction in Progress \r\n \r\n$ 2,275,174.50 $ \r\n \r\n- $ \r\n \r\n- $ \r\n \r\n11,473,178.22 \r\n \r\n10,573,368.03 \r\n \r\n8,643,974.86 \r\n \r\n2,275,174.50 13,402,571.39 \r\n \r\nTotal Capital Assets Not Being Depreciated \r\n \r\n13,748,352.72 \r\n \r\n10,573,368.03 \r\n \r\n8,643,974.86 \r\n \r\n15,677,745.89 \r\n \r\nCapital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements \r\nLess Accumulated Depreciation for: Buildings and Improvements Equipment Land Improvements \r\n \r\n92,659,271.09 4,794,118.70 2,594,719.05 \r\n \r\n8,643,974.86 - \r\n \r\n22,569,352.78 3,790,544.10 1,213,038.92 \r\n \r\n1,885,257.30 230,722.65 57,271.82 \r\n \r\n- \r\n \r\n101,303,245.95 \r\n \r\n- \r\n \r\n4,794,118.70 \r\n \r\n- \r\n \r\n2,594,719.05 \r\n \r\n- \r\n \r\n24,454,610.08 \r\n \r\n- \r\n \r\n4,021,266.75 \r\n \r\n- \r\n \r\n1,270,310.74 \r\n \r\nTotal Capital Assets, Being Depreciated, Net \r\n \r\n72,475,173.04 \r\n \r\n6,470,723.09 \r\n \r\n- \r\n \r\n78,945,896.13 \r\n \r\nGovernmental Activity Capital Assets - Net $ 86,223,525.76 $ 17,044,091.12 $ 8,643,974.86 $ 94,623,642.02 \r\n \r\nCurrent year depreciation expense by function is as follows: \r\n \r\nInstruction Support Services \r\nStudent Transportation Services Other Support Services Food Services \r\n \r\n$ 210,884.75 17,280.00 \r\n \r\n$ 1,918,331.69 \r\n228,164.75 26,755.33 \r\n \r\n$ 2,173,251.77 \r\n \r\nNOTE 7: INTERFUND ASSETS, LIABILITIES, AND TRANSFERS INTERFUND ASSETS AND LIABILITIES \r\n \r\nDue to and due from other funds are recorded for interfund receivables and payables which arise from interfund transactions. Interfund balances at June 30, 2017, consisted of the following: \r\n \r\nDue From Other Funds \r\n \r\nDue To Other Funds \r\n \r\nGeneral Fund Capital Projects Fund \r\n \r\n$ 5,582,991.96 - \r\n \r\n$ \r\n \r\n- \r\n \r\n5,582,991.96 \r\n \r\n$ 5,582,991.96 $ 5,582,991.96 \r\n \r\n- 22 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2017 \r\n \r\nEXHIBIT \"I\" \r\n \r\nInterfund assets and liabilities are a result of the general fund loaning funds to the capital projects fund to provide cash to complete construction projects. \r\n \r\nINTERFUND TRANSFERS Interfund transfers for the year ended June 30, 2017, consisted of the following: \r\n \r\nTransfers to \r\n \r\nTransfers From Debt Service Fund \r\n \r\nCapital Projects Fund $ 1,566,914.36 \r\n \r\nTransfers are used to move sales tax revenues collected by the debt service fund to the capital projects fund for the payment of costs associated with construction projects approved by the Special Purpose Local Option Sales Tax (SPLOST) referendum. \r\nNOTE 8: LONG-TERM LIABILITIES The changes in long-term liabilities during the fiscal year for governmental activities, were as follows: \r\n \r\nBalance July 1, 2016 \r\n \r\nAdditions \r\n \r\nGovernmental Activities \r\n \r\nBalance \r\n \r\nDeductions \r\n \r\nJune 30, 2017 \r\n \r\nDue Within One Year \r\n \r\nGeneral Obligation Bonds Qualified Zone Academy Bonds \r\nTotal Bond Debt \r\n \r\n$ 12,500,000.00 $ 2,000,000.00 \r\n14,500,000.00 \r\n \r\n- $ 2,410,000.00 $ 10,090,000.00 $ 2,450,000.00 \r\n \r\n- \r\n \r\n- \r\n \r\n2,000,000.00 \r\n \r\n- \r\n \r\n- \r\n \r\n2,410,000.00 \r\n \r\n12,090,000.00 \r\n \r\n2,450,000.00 \r\n \r\nCapital Leases Compensated Absences(1) Unamortized Bond Premiums \r\n \r\n833,746.71 137,554.12 1,150,423.45 \r\n \r\n51,011.12 \r\n- \r\n \r\n415,724.29 33,849.72 \r\n230,084.69 \r\n \r\n418,022.42 154,715.52 920,338.76 \r\n \r\n418,022.42 - \r\n230,084.69 \r\n \r\n$ 16,621,724.28 $ 51,011.12 $ 3,089,658.70 $ 13,583,076.70 $ 3,098,107.11 \r\n \r\n(1) The portion of compensated absences due within one year has been determined to be immaterial to the basic financial statements. \r\nGENERAL OBLIGATION DEBT OUTSTANDING \r\nThe School District's bonded debt consists of various issues 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 property taxes. General obligation bonds are direct obligations and pledge the full faith and credit of the School District. \r\nGeneral obligation bonds currently outstanding are as follows: \r\n \r\nDescription \r\n \r\nInterest Rates \r\n \r\nIssue Date \r\n \r\nMaturity Date \r\n \r\nAmount Issued \r\n \r\nAmount Outstanding \r\n \r\nGeneral Government - Series 2014 2.00% - 5.00% \r\n \r\n7/22/2014 \r\n \r\n4/1/2021 $ 12,500,000.00 $ 10,090,000.00 \r\n \r\n- 23 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2017 \r\n \r\nEXHIBIT \"I\" \r\n \r\nThe following schedule details debt service requirements to maturity for the School District's total general obligation bonds payable: \r\n \r\nFiscal Year Ended June 30: \r\n \r\nGeneral Obligation Debt \r\n \r\nPrincipal \r\n \r\nInterest \r\n \r\nUnamortized Bond Premium \r\n \r\n2018 2019 2020 2021 \r\n \r\n$ 2,450,000.00 $ 2,490,000.00 2,545,000.00 2,605,000.00 \r\n \r\n455,100.00 $ 357,100.00 257,500.00 130,250.00 \r\n \r\n230,084.69 230,084.69 230,084.69 230,084.69 \r\n \r\nTotal Principal and Interest $ 10,090,000.00 $ 1,199,950.00 $ \r\n \r\n920,338.76 \r\n \r\nQUALIFIED ZONE ACADEMY BONDS (QZAB) \r\nSection 226 of the Taxpayer Relief Act of 1997 (Public Law 105-34) provides for a source of capital at no or at nominal interest rates for costs incurred by School Districts in connection with the establishment of special academic programs, in partnership with the business community. The School District, in agreement with Regions Bank, has entered into such an arrangement. \r\n \r\nThis agreement establishes a method of repayment for qualified interest-free debt instrument. The agreement requires the School District to deposit funds annually into a sinking fund account on or before June 30, 2017. The amount on deposit at June 30, 2017 was $1,646,575.32. \r\n \r\nDebt currently outstanding under Qualified Zone Academy Bonds is as follows: \r\n \r\nPurpose \r\n \r\nInterest Rate \r\n \r\nIssue Date \r\n \r\nMaturity Date \r\n \r\nAmount Issued Amount Outstanding \r\n \r\nGeneral Government - QZAB - Series 2006 \r\n \r\n0.00% 12/5/2006 \r\n \r\n12/15/2022 $ 2,000,000.00 $ \r\n \r\n2,000,000.00 \r\n \r\nThe following schedule reports the annual Qualified Zone Academy Bond payments: \r\n \r\nFiscal Year Ended June 30: \r\n \r\nPrincipal \r\n \r\n2023 \r\n \r\n$ 2,000,000.00 \r\n \r\nCAPITAL LEASES \r\n \r\nThe School District has acquired computer equipment under the provisions of various long-term lease agreements classified as capital leases for accounting purposes because they provide for a transfer of ownership by the end of the lease term. \r\n \r\nCapital leases currently outstanding are as follows: \r\n \r\nPurpose \r\n \r\nInterest Rates \r\n \r\nIssue Date \r\n \r\nMaturity Date \r\n \r\nAmount Issued \r\n \r\nAmount Outstanding \r\n \r\nComputer Hardware Computer Hardware \r\n \r\n2.5550% 2.3578% \r\n \r\n8/17/2014 3/25/2015 \r\n \r\n8/17/2017 7/1/2018 \r\n \r\n$ 473,266.05 $ 118,841.78 \r\n \r\n1,192,934.70 \r\n \r\n299,180.64 \r\n \r\n$ 1,666,200.75 $ 418,022.42 \r\n \r\n- 24 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2017 \r\n \r\nEXHIBIT \"I\" \r\n \r\nThe following is a schedule of total capital lease payments: \r\n \r\nFiscal Year Ended June 30: \r\n \r\nPrincipal \r\n \r\nInterest \r\n \r\n2018 \r\n \r\n$ 418,022.42 $ 2,312.83 \r\n \r\nCOMPENSATED ABSENCES \r\nCompensated absences represent obligations of the School District relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. Typically, the general fund is the fund used to liquidate this long-term debt. The School District uses the vesting method to compute compensated absences. \r\nNOTE 9: RISK MANAGEMENT \r\nINSURANCE \r\nCommercial Insurance \r\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. \r\nUNEMPLOYMENT COMPENSATION \r\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. \r\nChanges in the unemployment compensation claims liability during the last two fiscal years are as follows: \r\n \r\nBeginning of Year Liability \r\n \r\nClaims and Changes in Estimates \r\n \r\nClaims Paid \r\n \r\nEnd of Year Liability \r\n \r\n2016 $ \r\n \r\n- \r\n \r\n$ \r\n \r\n7,074.00 \r\n \r\n$ \r\n \r\n7,074.00 \r\n \r\n$ \r\n \r\n- \r\n \r\n2017 $ \r\n \r\n- \r\n \r\n$ 12,210.00 \r\n \r\n$ 12,210.00 \r\n \r\n$ \r\n \r\n- \r\n \r\nSURETY BOND \r\n \r\nThe School District purchased a surety bond to provide additional insurance coverage as follows: \r\n \r\nPosition Covered \r\n \r\nAmount \r\n \r\nSuperintendent $ 50,000.00 \r\n \r\n- 25 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2017 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 10: FUND BALANCE CLASSIFICATION DETAILS \r\n \r\nThe School District's financial statements include the following amounts presented in the aggregate at June 30, 2017: \r\n \r\nNonspendable Inventories \r\nRestricted Continuation of Federal Programs Debt Service Continuation of State Programs \r\nAssigned School Activity Accounts \r\nUnassigned \r\n \r\n$ \r\n \r\n116,007.08 \r\n \r\n$ 1,496,637.37 3,914,281.94 612.08 \r\n \r\n5,411,531.39 \r\n \r\n568,124.05 3,991,886.79 \r\n \r\nFund Balance, June 30, 2017 \r\n \r\n$ 10,087,549.31 \r\n \r\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. \r\nNOTE 11: SIGNIFICANT COMMITMENTS \r\nCOMMITMENTS UNDER CONSTRUCTION CONTRACTS \r\nThe following is an analysis of significant outstanding construction or renovation contracts executed by the School District as of June 30, 2017, together with funding available: \r\n \r\nProject \r\n \r\nUnearned Executed Contracts (1) \r\n \r\nPayments through June 30, 2017 (2) \r\n \r\nFunding Available From State (1) \r\n \r\nPolk County College and Career Academy - Cedartown High School \r\n \r\n$ \r\n \r\n24,300.94 $ 12,590,677.03 $ \r\n \r\n2,200,172.60 \r\n \r\n(1) The amounts described are not reflected in the basic financial statements. (2) Payments include contracts and retainages payable at year-end. \r\n \r\nNOTE 12: SIGNIFICANT CONTINGENT LIABILITIES \r\nFEDERAL GRANTS \r\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. \r\nLITIGATION \r\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. \r\n \r\n- 26 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2017 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 13: POST-EMPLOYMENT BENEFITS \r\nGEORGIA SCHOOL PERSONNEL POST-EMPLOYMENT HEALTH BENEFIT FUND \r\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. \r\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. \r\n \r\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. \r\n \r\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: \r\n \r\nFor certificated teachers, librarians and regional educational service agencies and certain other eligible participants: \r\n \r\nJuly 1, 2016  June 30, 2017 \r\n \r\n$945.00 per member per month \r\n \r\nFor non-certificated school personnel: \r\n \r\nJuly 1, 2016  December 31, 2016 $746.20 per member per month \r\n \r\nJanuary 1, 2017  June 30, 2017 $846.20 per member per month \r\n \r\nNo additional contribution was required by the Board for fiscal year 2017 nor contributed to the School OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the School plan for other post-employment benefits and are subject to appropriation. \r\n \r\n- 27 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2017 \r\n \r\nEXHIBIT \"I\" \r\n \r\nThe School District's combined active and retiree contributions to the health insurance plans, which equaled the required contribution, for the current fiscal year and the preceding two fiscal years were as follows: \r\n \r\nFiscal Year \r\n \r\nPercentage Contributed \r\n \r\nRequired Contribution \r\n \r\n2017 2016 2015 \r\n \r\n100% 100% 100% \r\n \r\n$ 7,516,171.97 $ 7,164,882.51 $ 6,689,769.90 \r\n \r\nNOTE 14: RETIREMENT PLANS \r\n \r\nThe School District participates in various retirement plans administered by the State of Georgia, as further explained below. \r\n \r\nTEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) \r\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. \r\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. \r\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 $5,456,446.48 and $64,241.50 from the School District and the State, respectively. \r\n \r\nEMPLOYEES' RETIREMENT SYSTEM \r\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. \r\n- 28 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2017 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\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. \r\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. \r\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 contractually required contribution rate, actuarially determined annually, for the year ended June 30, 2017 was 24.81% of annual covered payroll for old and new plan members and 21.69% for GSEPS members. 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 $31,838.88 for the current fiscal year. \r\nPUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM (PSERS) \r\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. \r\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. \r\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. \r\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 \r\n- 29 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2017 \r\n \r\nEXHIBIT \"I\" \r\n \r\nand 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. \r\n \r\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 $103,373.00. \r\nPension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions \r\n \r\nAt June 30, 2017, the School District reported a liability of $70,886,089.00 for its proportionate share of the net pension liability for TRS ($70,658,887.00) and ERS ($227,202.00). \r\nThe TRS net pension liability reflected a reduction for support provided to the School District by the State of Georgia for certain public school support personnel. The amount recognized by the School District as its proportionate share of the net pension liability, the related State of Georgia support, and the total portion of the net pension liability that was associated with the School District were as follows: \r\n \r\nSchool District's proportionate share of the net pension liability \r\n \r\n$ 70,658,887.00 \r\n \r\nState of Georgia's proportionate share of the net pension liability associated with the School District \r\n \r\n944,080.00 \r\n \r\nTotal \r\n \r\n$ 71,602,967.00 \r\n \r\nThe net pension liability for TRS and ERS 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 and ERS during the fiscal year ended June 30, 2016. \r\nAt June 30, 2016, the School District's TRS proportion was 0.342487%, which was a decrease of 0.003287% from its proportion measured as of June 30, 2015. At June 30, 2016, the School District's ERS proportion was 0.004803%, which was an increase of 0.001376% from its proportion measured as of June 30, 2015. \r\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 $762,372.00. \r\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. \r\nFor the year ended June 30, 2017, the School District recognized pension expense of $7,146,946.00 for TRS, $48,397.00 for ERS and $124,981.00 for PSERS and revenue of $116,700.00 for TRS and $124,981.00 for PSERS. The revenue is support provided by the State of Georgia. For TRS the State of Georgia support is provided only for certain support personnel. \r\n \r\n- 30 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2017 \r\n \r\nEXHIBIT \"I\" \r\n \r\nAt June 30, 2017, the School District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: \r\n \r\nTRS Deferred Outflows of Resources \r\n \r\nDeferred Inflows of Resources \r\n \r\nERS \r\n \r\nDeferred \r\n \r\nDeferred \r\n \r\nOutflows of \r\n \r\nInflows of \r\n \r\nResources \r\n \r\nResources \r\n \r\nDifferences between expected and actual experience \r\n \r\n$ 1,052,627.00 $ 349,409.00 $ \r\n \r\n- $ 525.00 \r\n \r\nChanges of assumptions \r\n \r\n1,831,381.00 \r\n \r\n- \r\n \r\n1,924.00 \r\n \r\n- \r\n \r\nNet difference between projected and actual earnings on pension plan investments \r\n \r\n8,938,640.00 \r\n \r\n- \r\n \r\n23,100.00 \r\n \r\n- \r\n \r\nChanges in proportion and differences between School District contributions and proportionate share of contributions \r\n \r\n- \r\n \r\n1,453,303.00 \r\n \r\n34,352.00 \r\n \r\n- \r\n \r\nSchool District contributions subsequent to the measurement date \r\nTotal \r\n \r\n5,456,446.48 \r\n \r\n- \r\n \r\n31,838.88 \r\n \r\n$ 17,279,094.48 $ 1,802,712.00 $ 91,214.88 $ \r\n \r\n525.00 \r\n \r\nThe School District contributions subsequent to the measurement date of $5,456,446.48 for TRS and $31,838.88 for ERS are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ended June 30, 2018. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: \r\n \r\nYear Ended June 30: \r\n \r\nTRS \r\n \r\nERS \r\n \r\n2018 \r\n \r\n$ 839,452.00 $ 28,918.00 \r\n \r\n2019 \r\n \r\n$ 839,448.00 $ 9,759.00 \r\n \r\n2020 \r\n \r\n$ 4,845,881.00 $ 12,454.00 \r\n \r\n2021 \r\n \r\n$ 3,378,865.00 $ 7,720.00 \r\n \r\n2022 \r\n \r\n$ 116,290.00 $ \r\n \r\n- \r\n \r\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: \r\n \r\nTeachers Retirement System: \r\n \r\nInflation \r\n \r\n2.75% \r\n \r\nSalary increases \r\n \r\n3.75%  9.00%, average, including inflation \r\n \r\nInvestment rate of return \r\n \r\n7.50%, net of pension plan investment expense, including inflation \r\n \r\n- 31 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2017 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\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. \r\nEmployees' Retirement System: \r\n \r\nInflation Salary increases Investment rate of return \r\n \r\n2.75% \r\n3.25%  7.00%, average, including inflation 7.50%, net of pension plan investment expense, including inflation \r\n \r\nPost-retirement mortality rates were based on the RP-2000 Combined Mortality Table with future mortality improvement projected to 2025 with the Society of Actuaries' projection scale BB and set forward 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 of Actuaries' projection scale BB and set back 7 years for males and set forward 3 years for 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 9-12% less than the actual number of deaths that occurred during the study period for service retirements 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. \r\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. \r\nPublic School Employees Retirement System: \r\n \r\nInflation Salary increases Investment rate of return \r\n \r\n2.75% \r\nN/A 7.50%, net of pension plan investment expense, including inflation \r\n \r\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. \r\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. \r\n \r\n- 32 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2017 \r\n \r\nEXHIBIT \"I\" \r\n \r\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: \r\n \r\nAsset class \r\n \r\nTRS Target allocation \r\n \r\nERS/PSERS Target \r\nallocation \r\n \r\nLong-term expected real rate of return* \r\n \r\nFixed income Domestic large stocks Domestic mid stocks Domestic small stocks International developed market stocks International emerging market stocks Alternative \r\n \r\n30.00% 39.80% \r\n3.70% 1.50% 19.40% 5.60% \r\n- \r\n \r\n30.00% 37.20% \r\n3.40% 1.40% 17.80% 5.20% 5.00% \r\n \r\n(0.50)% 9.00% \r\n12.00% 13.50% \r\n8.00% 12.00% 10.50% \r\n \r\nTotal \r\n \r\n100.00% \r\n \r\n100.00% \r\n \r\n* Rates shown are net of the 2.75% assumed rate of inflation \r\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. \r\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: \r\n \r\nTeachers Retirement System: \r\n \r\n1% Decrease (6.50%) \r\n \r\nCurrent Discount Rate (7.50%) \r\n \r\n1% Increase (8.50%) \r\n \r\nSchool District's proportionate share of the net pension liability \r\n \r\n$ 109,981,429.00 $ 70,658,887.00 $ 38,283,255.00 \r\n \r\nEmployees' Retirement System: \r\nSchool District's proportionate share of the net pension liability \r\n \r\n1% Decrease (6.50%) \r\n \r\nCurrent Discount Rate (7.50%) \r\n \r\n1% Increase (8.50%) \r\n \r\n$ \r\n \r\n307,901.00 $ \r\n \r\n227,202.00 $ \r\n \r\n158,431.00 \r\n \r\n- 33 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2017 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\nPOLK COUNTY SCHOOL DISTRICT SOCIAL SECURITY REPLACEMENT PLAN Plan Description: As of January 2004, the School District established a single employer defined benefit pension plan for the group of employees covered under the Public Service Employees Retirement System (PSERS). Recognizing that PSERS was a limited defined benefit plan that does not meet the requirements of a qualified social security replacement plan, the new plan was established for these employees to meet the requirements of a social security replacement plan. \r\nThe School District Social Security Replacement Plan (Plan) provides a pension benefit for each participant at retirement, equal to 1.5% of the participant's Average Monthly Compensation multiplied by his Years of Credited Service up to 40 Years of Credited Service. Years of service subsequent to July 1, 1991, are counted for purposes of determining a participant's benefit. The funding method and determination of benefits payable are provided in or authorized by various sections of Title 47 of the Official Code of Georgia Annotated (\"OCGA\"). The Plan does not issue a separate financial report. \r\nThe employee is always 100% vested in his accrued benefit in the Plan. \r\nThe Plan is funded by employer contributions held in trust by Reliance Trust Company. The Actuary for the Plan is Swerdlin \u0026 Company. The Actuary determines the Plan liabilities and required contributions on an annual basis. \r\nAs of January 1, 2017, there were 371 Plan participants, consisting of the following: \r\n \r\nJanuary 1, 2017 \r\n \r\nActive plan members Vested terminated participants Retirees, beneficiaries and disabled participants \r\n \r\n134 141 \r\n96 \r\n \r\n371 \r\n \r\nFunding Policy: Employees shall neither be required nor permitted to make contributions to the Plan. The Polk County School District (Employer) shall make contributions required to fund the cost of the benefits provided to its eligible employees by this Plan. The Employer makes such contributions as necessary to fund the Plan in accordance with all applicable minimum funding standards under Georgia law. \r\nThe Employer's Annual Required Minimum Contribution is the actuarially determined amount necessary to fund the plan benefits. The current year required minimum contribution was $328,611.00. The current year contribution was $349,969.00. The current contribution rate was 14.72% of annual covered payroll. \r\nInvestments: The Plan maintains an investment policy which fosters prudent and sound judgment in the management of plan assets to ensure safety of capital consistent with the fiduciary responsibility to the citizens of Georgia and which conforms to the Plan's investment policy. All investments are consistent with Polk School District's policy and applicable Federal and State laws. \r\nInvestments are reported at fair value. Securities are traded on a national or international exchange and are valued at the last reported sales price. The Plan's investment policy requires diversification of assets in an effort to avoid the risk of large losses and maximize the investment return to the Plan consistent with market and economic risk. \r\n \r\n- 34 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2017 \r\n \r\nEXHIBIT \"I\" \r\n \r\nAs of December 31, 2016, the Plan's assets are: \r\n \r\nAsset Class Cash and Equivalent Domestic Equities International Equities Fixed Income \r\n \r\nPercent of Plan Assets \r\n \r\n$ \r\n \r\n359,161.00 \r\n \r\n1,796,618.00 \r\n \r\n165,770.00 \r\n \r\n1,453,189.00 \r\n \r\n$ \r\n \r\n3,774,738.00 \r\n \r\nFor the plan year ended December 31, 2016, the annual money-weighted rate of return on pension plan investments, net of plan investment expense, was 7.04%. \r\nThe following table summarizes the adopted asset allocation policy at December 31, 2016: \r\n \r\nAsset Class \r\nDomestic Equities International Equities Fixed Income Cash Total \r\n \r\nAdopted Asset Allocation \r\n40% to 50% 1% to 5% \r\n35% to 45% 1% to 5% 100% \r\n \r\nPension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to the Plan: The components of the net pension liability at December 31, 2016 were as follows: \r\n \r\nTotal pension liability Plan fiduciary net position Net pension liability \r\n \r\n$ 7,445,284.00 (3,773,625.00) \r\n$ 3,671,659.00 \r\n \r\nThe Plan's fiduciary net position as a percentage of its total pension liability is 50.68%. \r\nThe net pension liability for the Plan was measured as of December 31, 2016. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of January 1, 2016. An expected total pension liability as of December 31, 2016 was determined using standard roll-forward techniques. \r\nFor the year ended June 30, 2017, the School District recognized pension expense of $446,611.00 for the Plan. \r\n \r\n- 35 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2017 \r\n \r\nEXHIBIT \"I\" \r\n \r\nAt June 30, 2017, the School District reported deferred outflows of resources and deferred inflows of resources related to the Plan from the following sources: \r\n \r\nDeferred Outflows of Resources \r\n \r\nDeferred Inflows of Resources \r\n \r\nNet difference between projected and \r\n \r\nactual earnings on pension plan \r\n \r\ninvestment \r\n \r\n$ \r\n \r\n200,884.00 $ \r\n \r\n- \r\n \r\nDifferences between expected and actual experience \r\n \r\n117,703.00 \r\n \r\n329,610.00 \r\n \r\nChanges in actuarial assumptions \r\n \r\n348,627.00 \r\n \r\n192,142.00 \r\n \r\nTotal \r\n \r\n$ \r\n \r\n667,214.00 $ 521,752.00 \r\n \r\nAmounts reported as deferred outflows of resources and deferred inflows of resources related to the Plan will be recognized in pension expense as follows: \r\n \r\nYear Ended June 30: \r\n \r\n2017 2018 2019 2020 2021 Thereafter \r\nActuarial Methods and Assumptions: \r\n \r\n$ 66,844.00 $ 66,842.00 $ 50,409.00 $ (3,239.00) $ (5,007.00) $ (30,387.00) \r\n \r\nThe total pension liability was determined as of January 1, 2017 using the following actuarial assumptions and methods: \r\n \r\nInflation \r\n \r\n2.50% \r\n \r\nSalary increases \r\n \r\n3.00% \r\n \r\nInvestment rate of return \r\n \r\n7.00%, net of pension plan investment expense \r\n \r\nSingle equivalent discount rate 5.57%, net of pension plan investment expense \r\n \r\nMortality rates were based on the RP-2014 Blue Collar with MP-2016. \r\n \r\nThe long-term expected rate of return on the Plan investments was determined using a building-block method in which best-estimate ranges of expected future real rate of return, net investment expenses and inflation, are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by expected inflation. Best estimate of arithmetic real rates of return for each major asset class, included in the Plan's target asset allocation as of December 31, 2016. \r\n \r\nAsset Class \r\nDomestic Equities International Equities Fixed Income Cash \r\n \r\nTarget Allocation \r\n49% 5% \r\n41% 5% \r\n \r\nLong-Term Expected Real Rate of Return* \r\n6.00% 6.00% 3.00% 0.00% \r\n \r\n*Rates shown are net of the 2.50% assumed rate of inflation \r\n \r\n- 36 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2017 \r\n \r\nEXHIBIT \"I\" \r\n \r\nDiscount rate: The discount rate used to measure the total pension liability was the single equivalent discount rate shown above. The projection of cash flows used to determine the discount rate assumed that employer contributions will be made at rates equal to actuarially determined contribution rates. Based on this assumption, the Plan's fiduciary net position was projected to be available to make all projected future benefits payments of current Plan members through 2046 and the long-term expected rate of return of 7.00% was applied to this period. The 20-year tax-free municipal bond yield of 3.78% was applied after 2047. \r\nSensitivity of the Polk County School District's Net Pension Liability to changes in the discount rate: The following presents the School District's net pension liability calculated using the discount rate of 5.57%, as well as what the School District's net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (4.57%) or 1-percentage-point higher (6.57%) than the current rate: \r\n \r\n1% Decrease \r\n \r\nCurrent discount rate \r\n \r\n1% Increase \r\n \r\nSchool District's proportionate share \r\n \r\nof the net pension liability \r\n \r\n$ \r\n \r\n(4.57%) 4,644,402.00 $ \r\n \r\n(5.57%) \r\n \r\n(6.57%) \r\n \r\n3,671,659.00 $ 2,855,570.00 \r\n \r\nNOTE 15: TAX ABATEMENTS \r\n \r\nThe Development Authority of Polk County, the Cedartown Development Authority and the Rockmart Development Authority can enter into agreements with private individuals or entities for economic or industrial projects to encourage the creation of jobs and capital investment through an \"Economic Incentive Program\". This program is used to incentivize these businesses to build, relocate, expand, or renovate within incorporated and unincorporated Polk County. Each agreement provides a property tax benefit to the company through a schedule of discounted valuation that reduces, for ad valorem tax purposes, the fair market value of real and/or personal property that is held by the Authorities and leased to the company. Georgia case law and the Authorities' enabling legislation provide the Authorities with the power to enter into such agreements with private companies. \r\n \r\nThe Authorities may accept title to real and personal property assets from a company in return for job creation and capital investment, and provide a tax benefit to the company through a lease agreement with the Authority. In considering eligibility for providing this benefit to a company, the Authorities review the following criteria: \r\n \r\n1. Eligible businesses can include new and existing industrial businesses. 2. But for an incentive agreement, the company would not create the jobs and investment in \r\nthe community. 3. Eligible projects must involve significant investment in real and personal property. 4. The average wage of the business' employees should be above the average wage of goods \r\nproducing employees in Polk County. 5. The business should offer medical benefits to all employees. 6. The impact to job retention will be considered for each expansion project. 7. As a condition of assistance, a business will be required to work with the Authority to \r\nconvey title to the Authority. \r\n \r\nIn return for a property tax benefit, a company is required to commit to creating jobs and capital investment within a defined period as part of a performance and accountability agreement with the Authority that includes provisions for the company to pay back a prorated portion of the benefit if they fail to meet the performance criteria by a specified date. The Authorities monitor compliance with performance and accountability agreements to ensure the companies meet their commitments. \r\n \r\n- 37 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2017 \r\n \r\nEXHIBIT \"I\" \r\n \r\nFor the Polk County School District's year ending December 31, 2016, the cumulative property tax not collected due to incentive agreements was $220,687.04; however, $226,077.57 was paid to the Polk County School District through the Economic Incentive Program for the same period. These agreements will result in an estimated $97.0 million in new capital investment for Polk County and more than 290 new/retained jobs. According to the National Association of Manufacturers, the new capital investment will generate an additional $173.8 million in our economy, and the 290 jobs will generate another 1,160 jobs in other sectors. \r\nThe companies currently under an abatement program during the 2016 tax year are listed below, along with a summary of each project. The values included in these notes only reflect the values included in an economic incentive program and are not intended to be the total amount of investment in Polk County. \r\nMiura Manufacturing America Co. LTD 2200 Steven B. Smith Blvd. Rockmart, Georgia 30153 \r\nIn 2008, the Development Authority of Polk County entered into a lease agreement with Miura Manufacturing which allowed for the company to lease, improve and equip an approximate 100,000 square foot industrial boiler manufacturing facility in the Rockmart 101 Industrial Park. Miura committed to invest approximately $11,225,000.00 in the property, machinery and equipment and to also create approximately 50 new jobs within 36 months after full operating capacity. The agreement would provide a leasehold valuation schedule which phased in the property taxes over a period of time from 2009 to 2017. \r\nThe 2016 maximum fair market value of the project, including real property, inventory, machinery and equipment totals $14,790,948.00. In 2016, the total abated taxes for Miura was $15,190.65, with $5,894.99 being abated by the Polk County School District. \r\nGildan Yarns, LLC 2121 Heilig Road Salisbuty, NC 28146 \r\nDoing business in Polk County at 270 North Park Blvd. Cedartown, Ga.30125 \r\nIn 2013, the Cedartown Development Authority entered into a Memorandum of Understanding with Gildan Yarns, LLC for the expansion, renovation, improvement and equipping of an existing yarn manufacturing facility in the Cedartown North Industrial Park for lease and operation by the company. The company committed to invest $30.0 million in renovation and equipment, as well as create 8 new jobs and retain 94 existing jobs. In order to incentivize this project, the Cedartown Development Authority entered into an agreement to phase in the property taxes on the project over a period of time from 2015 to 2024. \r\nFor the 2016 tax year, Gildan Yarn is being assessed a fair market value, including real property, inventory, machinery and equipment of $12,574,588.00. In 2016, the total abated taxes for Gildan Yarns was $174,180.38, with $73,057.18 being abated by the Polk County School District. \r\n \r\n- 38 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2017 \r\n \r\nEXHIBIT \"I\" \r\n \r\nJefferson Southern Corporation 1000 Marquette Road Rockmart, Georgia 30153 \r\nJefferson Southern Corporation is a Tier One automotive supplier who produces and sells parts that are ready to be installed in automobiles. JSC located in Rockmart, Georgia in the Rockmart 101 Industrial Park in 2001. At that time, the Rockmart Development Authority entered into a Tax Incentive Operating Agreement that would allow for the acquisition, construction and equipping of the original manufacturing facility in multiple phases and would provide a phase in of property taxes for each phase of the location/expansion. Through this original and subsequent agreements, Jefferson Southern Corporation has committed to invest $55,800,000.00 in capital investment in Polk County, along with the creation of 140 jobs. This investment has occurred (and is occurring) in four phases, with Phase I being the original purchase and construction of the manufacturing facility and an abatement period from 2002 to 2015, Phase II being the expansion of the facility and installation of a new press and welding line and an abatement period from 2004 to 2017, Phase III being new equipment and facility improvements with an abatement period from 2008 to 2021, and Phase IV consisting of the construction of an additional 82,000 square feet and the acquisition of new machinery and equipment including a crane, conveyor and a new press with an abatement period from 2015 to 2028. \r\nIn the tax period for 2016, Jefferson Southern had an appraised value of $47,464,564.00 including real property, inventory, machinery and equipment. During this same time period, the total of abated taxes for Jefferson Southern is $311,994.56, with $141,734.87 being abated by the Polk School District. \r\nNOTE 16: SUBSEQUENT EVENTS \r\nIn the subsequent fiscal year, voters authorized the School District to issue general obligation bonds in the amount of $18,050,000.00 which were sold March 1, 2018. The proceeds from these bonds will be used for capital outlay projects to construct, remodel, improve, and equip existing facilities. \r\n \r\n- 39 - \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY TEACHERS RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"1\" \r\n \r\nYear Ended \r\n \r\nSchool District's proportion of the net pension liability \r\n \r\nSchool District's proportionate share of the net pension liability \r\n \r\nState of Georgia's proportionate share of the net \r\npension liability associated with the School District \r\n \r\n2017 2016 2015 \r\n \r\n0.342487% $ 0.345774% $ 0.346443% $ \r\n \r\n70,658,887.00 $ 52,640,658.00 $ 43,768,503.00 $ \r\n \r\n944,080.00 $ 600,892.00 $ 560,177.00 $ \r\n \r\nTotal \r\n \r\nSchool District's covered payroll \r\n \r\nSchool District's proportionate share of the net pension liability as a percentage of its covered \r\npayroll \r\n \r\nPlan fiduciary net position as a \r\npercentage of the total pension liability \r\n \r\n71,602,967.00 53,241,550.00 44,328,680.00 \r\n \r\n$ 38,069,372.98 $ 36,915,144.69 $ 35,545,926.47 \r\n \r\n185.61% 142.60% 123.13% \r\n \r\n76.06% 81.44% 84.03% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 41 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"2\" \r\n \r\nYear Ended \r\n \r\nSchool District's proportion of the net pension liability \r\n \r\nSchool District's proportionate share of the net pension liability \r\n \r\n2017 2016 2015 \r\n \r\n0.004803% $ 0.003427% $ 0.003393% $ \r\n \r\n227,202.00 138,841.00 127,258.00 \r\n \r\nSchool District's covered payroll \r\n \r\nSchool District's proportionate share of the net pension liability as a \r\npercentage of covered payroll \r\n \r\n$ \r\n \r\n111,677.30 \r\n \r\n$ \r\n \r\n78,360.00 \r\n \r\n$ \r\n \r\n76,400.48 \r\n \r\n203.45% 177.18% 166.57% \r\n \r\nPlan fiduciary net position as a \r\npercentage of total net pension liability \r\n72.34% 76.20% 77.99% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 42 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY PUBLIC SCHOOLS EMPLOYEES RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"3\" \r\n \r\nYear Ended \r\n2017 2016 2015 \r\n \r\nSchool District's proportion of the \r\nnet pension liability \r\n \r\nSchool District's proportionate share of the net pension liability \r\n \r\n0.00% $ \r\n \r\n- \r\n \r\n0.00% $ \r\n \r\n- \r\n \r\n0.00% $ \r\n \r\n- \r\n \r\nState of Georgia's proprotionate share of the net pension \r\nliaibility associated with the School District \r\n \r\n$ \r\n \r\n762,372.00 $ \r\n \r\n$ \r\n \r\n485,473.00 $ \r\n \r\n$ \r\n \r\n443,309.00 $ \r\n \r\nTotal \r\n762,372.00 485,473.00 443,309.00 \r\n \r\nSchool District's covered payroll \r\n$ 1,810,170.59 $ 1,791,780.27 $ 1,790,955.74 \r\n \r\nSchool District's proportionate share of the net pension liability as a percentage of its covered \r\npayroll \r\n \r\nPlan fiduciary net position as a \r\npercentage of the total pension liability \r\n \r\nN/A \r\n \r\n81.00% \r\n \r\nN/A \r\n \r\n87.00% \r\n \r\nN/A \r\n \r\n88.29% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 43 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \r\nSCHEDULE OF CONTRIBUTIONS TEACHERS RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"4\" \r\n \r\nYear Ended \r\n2017 2016 2015 \r\n \r\nContractually required contribution \r\n \r\n$ \r\n \r\n5,456,446.48 \r\n \r\n$ \r\n \r\n5,360,865.43 \r\n \r\n$ \r\n \r\n4,797,913.58 \r\n \r\nContributions in relation to the contractually required \r\ncontribution \r\n \r\n$ \r\n \r\n5,456,446.48 \r\n \r\n$ \r\n \r\n5,360,865.43 \r\n \r\n$ \r\n \r\n4,797,913.58 \r\n \r\nContribution deficiency (excess) \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\nSchool District's covered-employee \r\npayroll \r\n$ 38,673,234.64 $ 38,069,372.98 $ 36,915,144.69 \r\n \r\nContribution as a percentage of covered- \r\nemployee payroll \r\n14.11% 14.08% 13.00% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 44 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \r\nSCHEDULE OF CONTRIBUTIONS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"5\" \r\n \r\nYear Ended \r\n \r\nContractually required contribution \r\n \r\nContributions in relation to the contractually required \r\ncontribution \r\n \r\nContribution deficiency (excess) \r\n \r\n2017 \r\n \r\n$ \r\n \r\n31,838.88 $ \r\n \r\n31,838.88 $ \r\n \r\n- \r\n \r\n2016 \r\n \r\n$ \r\n \r\n27,606.43 $ \r\n \r\n27,606.43 $ \r\n \r\n- \r\n \r\n2015 \r\n \r\n$ \r\n \r\n17,207.88 $ \r\n \r\n17,207.88 $ \r\n \r\n- \r\n \r\n2014 \r\n \r\n$ \r\n \r\n14,104.00 $ \r\n \r\n14,104.00 $ \r\n \r\n- \r\n \r\n2013 \r\n \r\n$ \r\n \r\n11,306.36 $ \r\n \r\n11,306.36 $ \r\n \r\n- \r\n \r\n2012 \r\n \r\n$ \r\n \r\n2,581.12 $ \r\n \r\n2,581.12 $ \r\n \r\n- \r\n \r\n2011 \r\n \r\n$ \r\n \r\n6,124.09 $ \r\n \r\n6,124.09 $ \r\n \r\n- \r\n \r\n2010 \r\n \r\n$ \r\n \r\n18,234.41 $ \r\n \r\n18,234.41 $ \r\n \r\n- \r\n \r\n2009 \r\n \r\n$ \r\n \r\n26,889.19 $ \r\n \r\n26,889.19 $ \r\n \r\n- \r\n \r\nSchool District's covered-employee \r\npayroll \r\n \r\n$ 128,331.00 \r\n \r\n$ 111,677.30 \r\n \r\n$ \r\n \r\n78,360.00 \r\n \r\n$ \r\n \r\n76,400.48 \r\n \r\n$ \r\n \r\n75,872.88 \r\n \r\n$ \r\n \r\n22,193.64 \r\n \r\n$ \r\n \r\n58,828.91 \r\n \r\n$ 175,162.44 \r\n \r\n$ 258,301.54 \r\n \r\nContribution as a percentage of covered- \r\nemployee payroll \r\n24.81% 24.72% 21.96% 18.46% 14.90% 11.63% 10.41% 10.41% 10.41% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 45 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS \r\nSOCIAL SECURITY REPLACEMENT PLAN YEAR ENDING DECEMBER 31 \r\n \r\nSCHEDULE \"6\" \r\n \r\nTotal Pension Liability Service Cost Interest Differences between Expected and Actual Experience Change of Assumptions Benefit Payments \r\nNet Change in Total Pension Liability \r\nTotal Pension Liability - beginning \r\n \r\n2017 \r\n \r\n2016 \r\n \r\n2015 \r\n \r\n2014 \r\n \r\n$ 211,474.00 $ 252,078.00 $ 203,802.00 $ 164,756.00 \r\n \r\n393,557.00 \r\n \r\n357,947.00 \r\n \r\n378,679.00 \r\n \r\n363,955.00 \r\n \r\n70,820.00 \r\n \r\n62,585.00 \r\n \r\n(446,217.00) \r\n \r\n251,101.00 \r\n \r\n(153,139.00) \r\n \r\n(61,902.00) \r\n \r\n471,960.00 \r\n \r\n832,322.00 \r\n \r\n(321,825.00) \r\n \r\n(294,805.00) \r\n \r\n(244,169.00) \r\n \r\n(221,185.00) \r\n \r\n200,887.00 \r\n \r\n315,903.00 \r\n \r\n364,055.00 \r\n \r\n1,390,949.00 \r\n \r\n7,244,397.00 \r\n \r\n6,928,494.00 \r\n \r\n6,564,439.00 \r\n \r\n5,173,490.00 \r\n \r\nTotal Pension Liability - ending (a) \r\nPlan Fiduciary Net Position Contributions - employer Net Investment Income Benefit Payments Administrative Expenses Due to Broker \r\nNet change in Plan Fiduciary Net Position \r\nPlan Fiduciary Net Position - beginning \r\nPlan Fiduciary Net Position - ending (b) \r\n \r\n$ 7,445,284.00 $ 7,244,397.00 $ 6,928,494.00 $ 6,564,439.00 \r\n \r\n$ 349,969.00 $ 315,891.00 $ 310,889.00 $ 304,253.00 \r\n \r\n238,741.00 \r\n \r\n(20,197.00) \r\n \r\n147,675.00 \r\n \r\n473,233.00 \r\n \r\n(321,825.00) \r\n \r\n(294,805.00) \r\n \r\n(244,169.00) \r\n \r\n(221,185.00) \r\n \r\n(21,220.00) \r\n \r\n(29,660.00) \r\n \r\n(25,205.00) \r\n \r\n(23,094.00) \r\n \r\n(1,113.00) \r\n \r\n(1,229.00) \r\n \r\n(4,493.00) \r\n \r\n(242.00) \r\n \r\n244,552.00 \r\n \r\n(30,000.00) \r\n \r\n184,697.00 \r\n \r\n532,965.00 \r\n \r\n3,529,073.00 \r\n \r\n3,559,073.00 \r\n \r\n3,374,376.00 \r\n \r\n2,841,411.00 \r\n \r\n3,773,625.00 \r\n \r\n3,529,073.00 \r\n \r\n3,559,073.00 \r\n \r\n3,374,376.00 \r\n \r\nNet Pension Liability - ending (a - b) \r\nPlan Fiduciary Net Position as a percentage of the Total Pension Liability \r\nCovered-Employee Payroll \r\nNet Pension Liability as percentage of Covered-Employee Payroll \r\n \r\n$ 3,671,659.00 $ 3,715,324.00 $ 3,369,421.00 $ 3,190,063.00 \r\n \r\n50.68% \r\n \r\n48.71% \r\n \r\n51.37% \r\n \r\n51.40% \r\n \r\n$ 2,377,259.00 $ 2,600,407.00 $ 2,562,945.00 $ 2,726,676.00 \r\n \r\n154.45% \r\n \r\n142.87% \r\n \r\n131.47% \r\n \r\n117.00% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 46 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \r\nSCHEDULE OF CONTRIBUTIONS SOCIAL SECURITY REPLACEMENT PLAN FOR THE YEAR ENDED DECEMBER 31 \r\n \r\nSCHEDULE \"7\" \r\n \r\nYear Ended \r\n \r\nContractually required contribution \r\n \r\n2017 \r\n \r\n$ \r\n \r\n2016 \r\n \r\n$ \r\n \r\n2015 \r\n \r\n$ \r\n \r\n2014 \r\n \r\n$ \r\n \r\n328,611.00 315,891.00 310,889.00 304,253.00 \r\n \r\nContributions in relation to the contractually required \r\ncontribution \r\n \r\n$ \r\n \r\n349,969.00 \r\n \r\n$ \r\n \r\n315,891.00 \r\n \r\n$ \r\n \r\n310,889.00 \r\n \r\n$ \r\n \r\n304,253.00 \r\n \r\nContribution deficiency (excess) \r\n \r\nSchool District's covered-employee \r\npayroll \r\n \r\n$ \r\n \r\n(21,358.00) $ 2,377,259.00 \r\n \r\n$ \r\n \r\n- \r\n \r\n$ 2,600,407.00 \r\n \r\n$ \r\n \r\n- \r\n \r\n$ 2,562,945.00 \r\n \r\n$ \r\n \r\n- \r\n \r\n$ 2,726,676.00 \r\n \r\nContribution as a percentage of covered- \r\nemployee payroll \r\n14.72% 12.15% 12.13% 11.16% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 47 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF INVESTMENT RETURNS SOCIAL SECURITY REPLACEMENT PLAN \r\nYEAR ENDING DECEMBER 31 \r\n \r\nYear Ended \r\n2017 2016 2015 2014 \r\n \r\nAnnual Money - Weighted Rate of Return, Net of Investment Expense \r\n7.04% (0.59)% \r\n4.55% 17.25% \r\n \r\nSCHEDULE \"8\" \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 48 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION \r\nFOR THE YEAR ENDED JUNE 30, 2017 \r\n \r\nSCHEDULE \"9\" \r\n \r\nTeachers Retirement System \r\nChanges of assumptions: In 2010 and later, the expectation of retired life mortality was changed to the RP 2000 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. \r\nOn November 1- 8, 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 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). \r\n \r\nEmployees' Retirement System \r\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. \r\nPublic School Employees Retirement System \r\nChanges of assumptions: In 2010 and later, the expectation of retired life mortality was changed to the RP 2000 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. \r\n- 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 and withdrawal. The expectation of retired life mortality was changed to 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). \r\n \r\nSocial Security Replacement Plan \r\nChanges of assumptions: There were no changes in benefits that affected the measurement of the total pension liability since the prior measurement date. However, in 2016 the amounts reported as changes in assumptions resulted from an increase in the discount rate from 5.11% to 5.40% since the prior measurement date. \r\nMethod and assumptions used in calculations of actuarially determined contributions: The actuarially determined contribution rates in the schedule of contributions are calculated as of January 1, 2015, 18 months 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, 2016 reported in that schedule: \r\n \r\nValuation date Actuarial cost method Amortization method Remaining amortization period Asset valuation method \r\nInflation rate Salary increases Investment rate of return \r\n \r\nJanuary 1, 2015 Entry age Level percentage of payroll 22 years Method recognized a portion of the difference between the market value of assets and expected actuarial value of assets, based on the assumed interest rate of return. The amount recognized each year is 20% of the difference between market value and expected actuarial value. 2.50% 3.50%, per annum 7.00%, net of pension plan investment \r\n \r\n- 49 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT GENERAL FUND \r\nSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL \r\nYEAR ENDED JUNE 30, 2017 \r\n \r\nSCHEDULE \"10\" \r\n \r\nREVENUES \r\nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous \r\nTotal Revenues \r\nEXPENDITURES \r\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 \r\nCapital Outlay Debt Service \r\nTotal Expenditures \r\nExcess of Revenues over (under) Expenditures \r\nOTHER FINANCING SOURCES (USES) \r\nOther Sources Other Uses \r\nTotal Other Financing Sources (Uses) \r\nNet Change in Fund Balances \r\nFund Balances - Beginning \r\nFund Balances - Ending \r\n \r\nNONAPPROPRIATED BUDGETS \r\n \r\nORIGINAL (1) \r\n \r\nFINAL (1) \r\n \r\nACTUAL AMOUNTS \r\n \r\nVARIANCE OVER/UNDER \r\n \r\n$ 13,035,000.00 $ 13,035,000.00 $ 14,765,513.67 $ \r\n \r\n- \r\n \r\n- \r\n \r\n199,085.15 \r\n \r\n44,352,328.00 \r\n \r\n47,204,477.46 \r\n \r\n48,288,322.26 \r\n \r\n- \r\n \r\n5,588,217.00 \r\n \r\n9,174,287.69 \r\n \r\n- \r\n \r\n- \r\n \r\n1,933,201.81 \r\n \r\n- \r\n \r\n- \r\n \r\n5,686.01 \r\n \r\n250,000.00 \r\n \r\n250,000.00 \r\n \r\n1,547,476.66 \r\n \r\n57,637,328.00 \r\n \r\n66,077,694.46 \r\n \r\n75,913,573.25 \r\n \r\n1,730,513.67 199,085.15 \r\n1,083,844.80 3,586,070.69 1,933,201.81 \r\n5,686.01 1,297,476.66 \r\n9,835,878.79 \r\n \r\n44,318,834.12 \r\n1,019,954.13 777,042.82 \r\n1,023,507.89 555,177.36 \r\n3,812,213.51 940,717.87 \r\n5,087,282.17 2,451,067.13 \r\n221,061.06 115,730.00 \r\n4,603,090.00 \r\n500,000.00 - \r\n65,425,678.06 \r\n(7,788,350.06) \r\n \r\n49,887,551.49 \r\n1,984,740.58 2,056,585.82 1,023,507.89 \r\n622,846.36 4,024,375.12 \r\n940,717.87 5,324,991.98 2,589,829.73 \r\n221,061.06 164,952.63 \r\n4,675,841.99 5,500,000.00 \r\n- \r\n79,017,002.52 \r\n(12,939,308.06) \r\n \r\n48,270,953.67 \r\n1,849,633.92 1,754,551.14 \r\n921,154.20 984,369.32 4,024,375.12 742,583.71 5,318,216.58 2,575,926.80 188,503.72 163,581.56 1,804,538.14 4,301,036.88 \r\n300,423.89 \r\n73,199,848.65 \r\n2,713,724.60 \r\n \r\n1,616,597.82 \r\n135,106.66 302,034.68 102,353.69 (361,522.96) \r\n198,134.16 \r\n6,775.40 13,902.93 32,557.34 \r\n1,371.07 (1,804,538.14) \r\n374,805.11 5,500,000.00 \r\n(300,423.89) \r\n5,817,153.87 \r\n15,653,032.66 \r\n \r\n350,000.00 (350,000.00) \r\n(7,788,350.06) 8,818,301.12 \r\n \r\n355,657.00 (355,657.00) \r\n(12,939,308.06) \r\n8,951,886.78 \r\n \r\n2,713,724.60 9,063,289.27 \r\n \r\n(355,657.00) 355,657.00 \r\n15,653,032.66 \r\n111,402.49 \r\n \r\n$ \r\n \r\n1,029,951.06 $ (3,987,421.28) $ 11,777,013.87 $ 15,764,435.15 \r\n \r\nNotes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual \r\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 $1,867,428.05 and $1,796,214.47, respectively. \r\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. \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 50 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \r\nYEAR ENDED JUNE 30, 2017 \r\n \r\nSCHEDULE \"11\" \r\n \r\nFUNDING AGENCY PROGRAM/GRANT \r\nAgriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program \r\nTotal U. S. Department of Agriculture \r\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 \r\nTotal Special Education Cluster \r\nOther Programs Pass-Through From Georgia Department of Education Career and Technical Education - Basic Grants to States Education for Homeless Children and Youth Education for Homeless Children and Youth English Language Acquisition Grants English Language Acquisition Grants Improving Teacher Quality State Grants Improving Teacher Quality State Grants Rural Education Rural Education Title I Grants to Local Educational Agencies Title I Grants to Local Educational Agencies \r\nTotal Other Programs \r\nTotal U. S. Department of Education \r\n \r\nCFDA NUMBER \r\n \r\nPASSTHROUGH \r\nENTITY ID \r\nNUMBER \r\n \r\nEXPENDITURES IN PERIOD \r\n \r\n10.553 10.555 \r\n \r\n17175GA324N1099 $ 17175GA324N1100 \r\n \r\n1,296,389.97 2,856,070.93 \r\n4,152,460.90 \r\n \r\n84.027 84.027 84.173 84.173 \r\n \r\nH027A150073 H027A160073 H173A150081 H173A160081 \r\n \r\n84.048 84.196 84.196 84.365 84.365 84.367 84.367 84.358 84.358 84.010 84.010 \r\n \r\nV048A160010 S196A150011 S196A160011 S365A150010 S365A160010 S367A150001 S367A160001 S358B150010 S358B160010 S010A150010 S010A160010 \r\n \r\n486,257.00 1,137,132.93 \r\n56,643.00 2,590.24 \r\n1,682,623.17 \r\n91,986.98 1,566.00 \r\n38,546.60 17,748.00 22,776.65 30,723.00 142,406.67 34,002.00 121,174.02 275,312.00 2,067,726.76 \r\n2,843,968.68 \r\n4,526,591.85 \r\n \r\nTotal Expenditures of Federal Awards \r\n \r\n$ \r\n \r\n8,679,052.75 \r\n \r\nNotes to the Schedule of Expenditures of Federal Awards \r\n \r\nNote 1. Basis of Presentation \r\n \r\nThe accompanying schedule of expenditures of federal awards (the \"Schedule\") includes the federal award activity of the Polk County School District (the \"District\") 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. \r\n \r\nNote 2. Summary of Significant Accounting Policies \r\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. \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 51 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2017 \r\n \r\nSCHEDULE \"12\" \r\n \r\nAGENCY/FUNDING \r\nGRANTS Bright From the Start: Georgia Department of Early Care and Learning Pre-Kindergarten Program \r\nEducation, 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 Supervisor Education Equalization Funding Grant Other State Programs Agriculture Construction Related Equipment - State Bonds Food Services Math and Science Supplements Preschool Disability Services Residential Treatment Centers Grant Teacher of the Year Teachers Retirement Vocational Education Vocational Construction Related Equipment - State Bonds \r\nGeorgia State Financing and Investment Commission Reimbursement on Construction Projects \r\nOffice of the State Treasurer Public School Employees Retirement \r\nTechnical College System of Georgia College and Career Academy \r\nCONTRACT Human Resources, Georgia Department of Family Connection \r\n \r\nGOVERNMENTAL FUND TYPES \r\n \r\nCAPITAL \r\n \r\nGENERAL \r\n \r\nPROJECTS \r\n \r\nFUND \r\n \r\nFUND \r\n \r\nTOTAL \r\n \r\n$ 1,179,701.55 $ \r\n \r\n- $ 1,179,701.55 \r\n \r\n2,391,440.00 331,670.00 \r\n6,246,280.00 527,069.00 \r\n3,027,593.00 425,851.00 \r\n4,422,076.00 4,051,285.00 1,546,690.00 6,652,817.00 1,210,931.00 \r\n476,234.00 332,881.00 981,617.00 872,685.00 262,440.00 154,444.00 \r\n992,240.00 1,753,810.00 2,012,166.00 \r\n174,889.00 (580,851.00) \r\n807,485.00 150,248.00 \r\n26,612.00 5,395,178.00 \r\n285,165.45 115,098.00 \r\n81,951.79 193,748.00 439,920.00 \r\n507.25 64,241.50 72,863.00 1,058,973.74 \r\n \r\n- \r\n \r\n2,391,440.00 \r\n \r\n- \r\n \r\n331,670.00 \r\n \r\n- \r\n \r\n6,246,280.00 \r\n \r\n- \r\n \r\n527,069.00 \r\n \r\n- \r\n \r\n3,027,593.00 \r\n \r\n- \r\n \r\n425,851.00 \r\n \r\n- \r\n \r\n4,422,076.00 \r\n \r\n- \r\n \r\n4,051,285.00 \r\n \r\n- \r\n \r\n1,546,690.00 \r\n \r\n- \r\n \r\n6,652,817.00 \r\n \r\n- \r\n \r\n1,210,931.00 \r\n \r\n- \r\n \r\n476,234.00 \r\n \r\n- \r\n \r\n332,881.00 \r\n \r\n- \r\n \r\n981,617.00 \r\n \r\n- \r\n \r\n872,685.00 \r\n \r\n- \r\n \r\n262,440.00 \r\n \r\n- \r\n \r\n154,444.00 \r\n \r\n- \r\n \r\n992,240.00 \r\n \r\n- \r\n \r\n1,753,810.00 \r\n \r\n- \r\n \r\n2,012,166.00 \r\n \r\n- \r\n \r\n174,889.00 \r\n \r\n- \r\n \r\n(580,851.00) \r\n \r\n- \r\n \r\n807,485.00 \r\n \r\n- \r\n \r\n150,248.00 \r\n \r\n- \r\n \r\n26,612.00 \r\n \r\n- \r\n \r\n5,395,178.00 \r\n \r\n- \r\n \r\n285,165.45 \r\n \r\n- \r\n \r\n115,098.00 \r\n \r\n- \r\n \r\n81,951.79 \r\n \r\n- \r\n \r\n193,748.00 \r\n \r\n- \r\n \r\n439,920.00 \r\n \r\n- \r\n \r\n507.25 \r\n \r\n- \r\n \r\n64,241.50 \r\n \r\n- \r\n \r\n72,863.00 \r\n \r\n- \r\n \r\n1,058,973.74 \r\n \r\n- \r\n \r\n1,549,333.50 \r\n \r\n103,373.00 \r\n \r\n- \r\n \r\n- \r\n \r\n1,961,427.61 \r\n \r\n1,549,333.50 103,373.00 \r\n1,961,427.61 \r\n \r\n46,998.98 \r\n \r\n- \r\n \r\n46,998.98 \r\n \r\n$ 48,288,322.26 $ 3,510,761.11 $ 51,799,083.37 \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 52 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \r\nYEAR ENDED JUNE 30, 2017 \r\n \r\nSCHEDULE \"13\" \r\n \r\nPROJECT \r\nSPLOST IV \r\nAcquiring, constructing, equipping, and completing the Rockmart area Van Wert Elementary School \r\nAcquiring, constructing, equipping and completing the Cedartown area Youngs Grove Elementary School \r\nAcquiring, constructing, renovating, repairing, improving, and equipping school buildings, other buildings, facilities, property and equipment, both real and personal, useful or desirable in connection therewith. \r\nSPLOST V \r\nRenovations, repairs, equipping, and improvements made at existing schools to include Cedartown High School Football Stadium, baseball fence and media wall, dug outs at both High Schools; Northside playground and and fence, system furniture roof studies roof studies. \r\nAcquiring and installing systemwide instructional and administrative technology \r\nRenovations at Eastside Elementary \r\nPolk County College and Career Academy Cedartown and Rockmart \r\n \r\nORIGINAL ESTIMATED \r\nCOST (1) \r\n- \r\n$ 35,000,000.00 $ \r\n300,000.00 1,500,000.00 3,300,000.00 8,850,000.00 13,950,000.00 \r\n \r\nCURRENT ESTIMATED COSTS (2) \r\n \r\nAMOUNT EXPENDED IN CURRENT YEAR (3) (4) \r\n \r\nAMOUNT EXPENDED IN PRIOR YEARS (3) (4) \r\n \r\nTOTAL COMPLETION \r\nCOST \r\n \r\nEXCESS PROCEEDS NOT \r\nEXPENDED \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n27,174,476.60 $ \r\n \r\n66,364.72 $ \r\n \r\n27,108,111.88 $ 27,174,476.60 $ \r\n \r\n- \r\n \r\n731,047.07 \r\n \r\n15,174.97 \r\n \r\n631,980.72 \r\n \r\n- \r\n \r\n- \r\n \r\n1,798,392.21 \r\n \r\n87,267.38 \r\n \r\n1,711,124.83 \r\n \r\n1,798,392.21 \r\n \r\n- \r\n \r\n3,497,017.07 \r\n \r\n5,605.89 \r\n \r\n3,491,411.18 \r\n \r\n3,497,017.07 \r\n \r\n- \r\n \r\n13,809,979.80 \r\n \r\n10,565,580.29 \r\n \r\n3,244,399.51 \r\n \r\n13,809,979.80 \r\n \r\n- \r\n \r\n19,836,436.15 \r\n \r\n10,673,628.53 \r\n \r\n9,078,916.24 \r\n \r\n19,105,389.08 \r\n \r\n- \r\n \r\nESTIMATED COMPLETION \r\nDATE \r\nComplete \r\n6/30/2018 Complete Complete Complete \r\n \r\nTotal \r\n \r\n$ 48,950,000.00 $ \r\n \r\n47,010,912.75 $ 10,739,993.25 $ \r\n \r\n36,187,028.12 $ 46,279,865.68 $ \r\n \r\n- \r\n \r\n(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax. \r\n \r\n(2) The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion. \r\n \r\n(3) The voters of Polk 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. \r\n \r\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: \r\n \r\nPrior Years \r\n \r\n$ \r\n \r\n4,623,358.73 \r\n \r\nCurrent Year \r\n \r\n503,300.00 \r\n \r\nTotal \r\n \r\n$ \r\n \r\n5,126,658.73 \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 53 - \r\n \r\n SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS \r\n \r\n Greg S. Griffin \r\nSTATE AUDITOR \r\n(404) 656-2174 \r\n \r\nDEPARTMENT OF AUDITS AND ACCOUNTS \r\n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \r\nSeptember 24, 2018 \r\n \r\nThe Honorable Nathan Deal, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the State Board of Education \r\nand Superintendent and Members of the Polk County School District \r\nINDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL \r\nSTATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS \r\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 Polk County School District (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 September 24, 2018. \r\nInternal Control Over Financial Reporting \r\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. \r\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. \r\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. \r\n \r\n Compliance and Other Matters \r\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. \r\nPurpose of this Report \r\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. \r\nRespectfully submitted, \r\nGreg S. Griffin State Auditor \r\n \r\n Greg S. Griffin \r\nSTATE AUDITOR \r\n(404) 656-2174 \r\n \r\nDEPARTMENT OF AUDITS AND ACCOUNTS \r\n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \r\nSeptember 24, 2018 \r\n \r\nThe Honorable Nathan Deal, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the State Board of Education \r\nand Superintendent and Members of the Polk County School District \r\nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE \r\nReport on Compliance for Each Major Federal Program \r\nWe have audited the Polk County School District'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, 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. \r\nManagement's Responsibility \r\nManagement is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. \r\nAuditor's Responsibility \r\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. \r\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. \r\n \r\n Opinion on Each Major Federal Program \r\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. \r\nReport on Internal Control over Compliance \r\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. \r\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. \r\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. \r\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. \r\nRespectfully submitted, \r\nGreg S. Griffin State Auditor \r\n \r\n SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS \r\n \r\n POLK COUNTY SCHOOL DISTRICT AUDITEE'S RESPONSE \r\nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2017 \r\nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. \r\nPRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. \r\n \r\n SECTION IV FINDINGS AND QUESTIONED COSTS \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2017 \r\n \r\nI SUMMARY OF AUDITOR'S RESULTS \r\n \r\nFinancial Statements \r\n \r\nType of auditor's report issue: Governmental Activities; General Fund; Capital Projects Fund; Debt Service Fund; Aggregate Remaining Fund Information \r\nInternal control over financial reporting:  Material weakness identified?  Significant deficiency identified? \r\nNoncompliance material to financial statements noted: \r\n \r\nUnmodified \r\nNo None Reported \r\nNo \r\n \r\nFederal Awards \r\nInternal Control over major programs:  Material weakness identified?  Significant deficiency identified? \r\n \r\nNo None Reported \r\n \r\nType of auditor's report issued on compliance for major programs: All major programs \r\n \r\nUnmodified \r\n \r\nAny audit findings disclosed that are required to be reported in \r\n \r\naccordance with 2 CFR 200.516(a)? \r\n \r\nNo \r\n \r\nIdentification of major programs: \r\n \r\nCFDA Numbers \r\n \r\nName of Federal Program or Cluster \r\n \r\n84.010 84.027, 84.173 \r\n \r\nTitle I Grants to Local Educational Agencies Special Education Cluster \r\n \r\nDollar threshold used to distinguish between Type A and Type B programs: \r\n \r\n$750,000.00 \r\n \r\nAuditee qualified as low-risk auditee? \r\n \r\nNo \r\n \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n \r\nNo matters were reported. \r\n \r\nIII FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. \r\n \r\n "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-be26-bp7-b2016-belec-p-btext","title":"Polk School District, Cedartown, 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":["2017-08-17"],"dcterms_description":["Annual financial report for the Polk 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":["Polk School District (Ga.)--Appropriations and expenditures--Periodicals.","Education--Georgia--Polk County--Auditing--Periodicals.","Education--Georgia--Polk County--Finance--Statistics--Periodicals.","Georgia Government Documents--Serial"],"dcterms_title":["Polk School District, Cedartown, 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-bp7-b2016-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-be26-bp7-b2016-belec-p-btext"],"dcterms_temporal":null,"dcterms_rights_holder":null,"dcterms_bibliographic_citation":null,"dlg_local_right":null,"dcterms_medium":["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":"POLK SCHOOL DISTRICT CEDARTOWN, GEORGIA \r\nANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED \r\nJUNE 30, 2016 (Including Independent Auditor's Reports) \r\n \r\n POLK COUNTY SCHOOL DISTRICT - TABLE OF CONTENTS - \r\n \r\nPage \r\n \r\nSECTION I \r\n \r\nFINANCIAL \r\n \r\nINDEPENDENT AUDITOR'S REPORT \r\n \r\nREQUIRED SUPPLEMENTARY INFORMATION \r\n \r\nMANAGEMENT'S DISCUSSION AND ANALYSIS \r\n \r\ni \r\n \r\nEXHIBITS \r\n \r\nBASIC FINANCIAL STATEMENTS \r\n \r\nGOVERNMENT-WIDE FINANCIAL STATEMENTS \r\n \r\nA \r\n \r\nSTATEMENT OF NET POSITION \r\n \r\n1 \r\n \r\nB \r\n \r\nSTATEMENT OF ACTIVITIES \r\n \r\n2 \r\n \r\nFUND FINANCIAL STATEMENTS \r\n \r\nC \r\n \r\nBALANCE SHEET \r\n \r\nGOVERNMENTAL FUNDS \r\n \r\n4 \r\n \r\nD \r\n \r\nRECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \r\n \r\nTO THE STATEMENT OF NET POSITION \r\n \r\n5 \r\n \r\nE \r\n \r\nSTATEMENT OF REVENUES, EXPENDITURES AND CHANGES \r\n \r\nIN FUND BALANCES \r\n \r\nGOVERNMENTAL FUNDS \r\n \r\n6 \r\n \r\nF \r\n \r\nRECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT \r\n \r\nOF REVENUES, EXPENDITURES AND CHANGES IN FUND \r\n \r\nBALANCES TO THE STATEMENT OF ACTIVITIES \r\n \r\n7 \r\n \r\nG \r\n \r\nSTATEMENT OF FIDUCIARY NET POSITION \r\n \r\nFIDUCIARY FUNDS \r\n \r\n8 \r\n \r\nH \r\n \r\nSTATEMENT OF CHANGES IN FIDUCIARY NET POSITION \r\n \r\nFIDUCIARY FUNDS \r\n \r\n9 \r\n \r\nI NOTES TO THE BASIC FINANCIAL STATEMENTS \r\n \r\n11 \r\n \r\nSCHEDULES \r\n \r\nREQUIRED SUPPLEMENTARY INFORMATION \r\n \r\n1 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY \r\n \r\nTEACHERS RETIREMENT SYSTEM OF GEORGIA \r\n \r\n39 \r\n \r\n2 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY \r\n \r\nEMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \r\n \r\n40 \r\n \r\n3 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY \r\n \r\n41 \r\n \r\nPUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA \r\n \r\n4 SCHEDULE OF CONTRIBUTIONS  TEACHERS RETIREMENT SYSTEM OF GEORGIA \r\n \r\n42 \r\n \r\n5 SCHEDULE OF CONTRIBUTIONS  EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA 43 \r\n \r\n6 SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS - \r\n \r\nSOCIAL SECURITY REPLACEMENT PLAN \r\n \r\n44 \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT - TABLE OF CONTENTS - \r\n \r\nSECTION I \r\nFINANCIAL \r\nSCHEDULES \r\nREQUIRED SUPPLEMENTARY INFORMATION \r\n7 SCHEDULE OF CONTRIBUTIONS  SOCIAL SECURITY REPLACEMENT PLAN 8 SCHEDULE OF INVESTMENT RETURNS  SOCIAL SECURITY REPLACEMENT PLAN 9 NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION 10 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES \r\nIN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND \r\nSUPPLEMENTARY INFORMATION \r\n11 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 12 SCHEDULE OF STATE REVENUE 13 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \r\n \r\nPage \r\n45 46 47 48 \r\n49 50 51 \r\n \r\nSECTION II \r\nCOMPLIANCE AND INTERNAL CONTROL REPORTS \r\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 \r\nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE \r\n \r\nSECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS \r\n \r\nSECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\n \r\n (This page left intentionally blank) \r\n \r\n SECTION I FINANCIAL \r\n \r\n (This page left intentionally blank) \r\n \r\n Greg S. Griffin \r\nSTATE AUDITOR \r\n(404) 656-2174 \r\n \r\nDEPARTMENT OF AUDITS AND ACCOUNTS \r\n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \r\nAugust 17, 2017 \r\n \r\nHonorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education \r\nand Superintendent and Members of the Polk County School District \r\nINDEPENDENT AUDITOR'S REPORT \r\nLadies and Gentlemen: \r\nReport on the Financial Statements \r\nWe have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Polk County School District (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. \r\nManagement's Responsibility for the Financial Statements \r\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. \r\nAuditor's Responsibility \r\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. \r\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 \r\n \r\n (This page left intentionally blank) \r\n \r\n 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. \r\nWe believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. \r\nOpinions \r\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. \r\nEmphasis of Matter \r\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. \r\nOther Matters \r\nRequired Supplementary Information \r\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, Schedules 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 x and pages 39 through 48 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. \r\nOther Information \r\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 11 through 13, is presented for the purposes of additional analysis and is not a required part of the basic financial statements. The Schedule \r\n \r\n (This page left intentionally blank) \r\n \r\n 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. \r\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. \r\nOther Reporting Required by Government Auditing Standards \r\nIn accordance with Government Auditing Standards, we have also issued our report dated August 17, 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. \r\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. \r\nRespectfully submitted, \r\nGreg S. Griffin State Auditor \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 \r\nINTRODUCTION The intent of this discussion and analysis is to look at the School District's financial performance as a whole. The reader should review the notes to the basic financial statements and the financial statements to enhance their understanding of the School District's financial performance. The School District's financial statements for the fiscal year ended June 30, 2016 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 Position 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. The fund financial statements provide information about all of the School District's funds. FINANCIAL HIGHLIGHTS Key financial highlights for fiscal year 2016 are as follows: On the government-wide financial statements: \r\n Government-wide net position at June 30, 2016 was approximately $26.4 million. Net position reflects assets (including capital assets, net of depreciation) and deferred outflows less all liabilities, both short-term and long-term and deferred inflows of the School District. The net position at June 30, 2016 of $26.4 million represented an increase of approximately $5.2 million when compared to the prior year. This large increase is due to an increase in state funding and local taxes. \r\n The School District had $72.7 million in expenses relating to governmental activities; only $52.1 million of these expenses were offset by program specific charges for services, operating and capital grants and contributions. However, the general revenues (primarily property and sales taxes) of approximately $25.8 million provided additional funding of these expenses. \r\n As stated above, general revenues accounted for $25.8 million or about 33.2% of all revenues totaling approximately $77.9 million. Program specific revenues in the form of charges for services, operating and capital grants, and contributions accounted for the balance of these revenues. \r\ni \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 \r\nOn the fund financial statements: \r\n Among major funds, the general fund had approximately $71.4 million in revenues and $71.8 million in expenditures. The general fund's fund balance of approximately $9.1 million at June 30, 2016 decreased by approximately $865 thousand from the prior year. \r\nOVERVIEW OF THE FINANCIAL STATEMENTS \r\nThis annual report consists of three parts; management's discussion and analysis (this section), the basic financial statements, including notes to the 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. \r\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 School District's overall financial status. \r\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 Polk County School District, the general fund, capital projects fund, and debt service fund are all considered to be major funds. The School District has no non-major funds as defined by GASB Statement No. 34 for purposes of this report. \r\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. \r\nGovernment-wide Statements \r\nSince the Polk County School District has no operations that have been classified as \"Business Activities\", the government-wide financial statements are basically a consolidation of the entire School District's operating funds into one column called governmental activities. In reviewing the government-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 School District's assets, deferred outflows, liabilities, and deferred inflows and uses the accrual basis of accounting similar to the accounting used by most private-sector companies. This basis of accounting takes into accounts all of the current year's revenues and expenses regardless of when cash is received or paid. \r\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. \r\nii \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 \r\nWhen analyzing government-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: \r\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 \r\naccrual basis of accounting  Allocate net position as follows: \r\no Net Investment in Capital Assets o Restricted net position is that with constraints placed on the use by external sources \r\nsuch as creditors, grantors, contributors or laws and regulations. o Unrestricted net position is net position that does not meet any of the above \r\nrestrictions. \r\nFund Financial Statements \r\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 non-major funds as defined by generally accepted accounting principles. \r\nThe School District has two kinds of funds as discussed below: \r\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. \r\nFiduciary Funds  The School District is the trustee, or fiduciary, for assets that belong to clubs, organizations and others within the principals' accounts as well as an Employer Sponsored Pension Plan. 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 government-wide financial statements because it cannot use these assets to finance its operations. \r\nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT AS A WHOLE \r\nNet position, which is the difference between total assets and deferred outflows of resources, and total liabilities and deferred inflows, is one indicator of the financial condition of the School 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 \r\niii \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 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 non-financial factors should be considered in assessing the overall health of the School District. In the case of the Polk County School District, assets and deferred outflows exceeded liabilities and deferred inflows by approximately $26.4 million at June 30, 2016. 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 $26.4 million of net position, about $4.8 million was restricted for continuation of Federal and State 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 School District had $71.5 million net investment 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 position, it must be recognized that this portion of the net position is not available for future spending. The deficit balance of unrestricted net position of approximately $49.9 million includes the net pension liability adjustments as required by GASB Statement No. 68 and GASB Statement No. 71. \r\niv \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 \r\n \r\nTable 1 provides a summary of the School District's net position for this fiscal year as compared to the prior fiscal year. \r\n \r\nTable 1 Net Position \r\n \r\nGovernmental Activities \r\n \r\nFiscal \r\n \r\nFiscal \r\n \r\nYear 2016 \r\n \r\nYear 2015 \r\n \r\nAssets Current and Other Assets Capital Assets, Net \r\n \r\n$ \r\n \r\n24,263,984 $ \r\n \r\n32,991,967 \r\n \r\n86,223,526 \r\n \r\n77,832,299 \r\n \r\nTotal Assets \r\n \r\n110,487,510 \r\n \r\n110,824,266 \r\n \r\nDeferred Outflows of Resources \r\n \r\n5,987,253 \r\n \r\n5,626,476 \r\n \r\nLiabilities Current and Other Liabilities Long-Term Liabilities \r\n \r\n10,319,854 73,116,547 \r\n \r\n8,584,309 69,271,109 \r\n \r\nTotal Liabilities \r\n \r\n83,436,401 \r\n \r\n77,855,418 \r\n \r\nDeferred Inflows of Resources \r\n \r\n6,650,644 \r\n \r\n17,422,809 \r\n \r\nNet Position Net Investment in Capital Assets Restricted Unrestricted (Deficit) \r\n \r\n71,487,458 4,758,543 \r\n(49,858,283) \r\n \r\n69,614,797 4,568,834 \r\n(53,011,116) \r\n \r\nTotal Net Position \r\n \r\n$ \r\n \r\n26,387,718 $ \r\n \r\n21,172,515 \r\n \r\nTotal net position increased by approximately $5.2 million in fiscal year 2016 from the prior year. This change in net position is detailed in Table 2 below. Table 2 also shows the change in net position as compared to the prior fiscal year. \r\n \r\nv \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 \r\n \r\nTable 2 Change in Net Position \r\n \r\nRevenues Program Revenues: Charges for Services Operating Grants and Contributions Capital Grants and Contributions \r\n \r\nGovernmental Activities \r\n \r\nFiscal Year \r\n \r\nFiscal Year \r\n \r\n2016 \r\n \r\n2015 \r\n \r\n$ \r\n \r\n1,872,236 $ \r\n \r\n2,021,462 \r\n \r\n48,381,030 \r\n \r\n46,378,777 \r\n \r\n1,799,549 \r\n \r\n110,000 \r\n \r\nTotal Program Revenues \r\n \r\n52,052,815 \r\n \r\n48,510,239 \r\n \r\nGeneral Revenues: Taxes Property Taxes Sales Taxes Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous \r\nTotal General Revenues \r\n \r\n15,428,879 4,685,075 \r\n4,452,878 78,566 \r\n1,199,025 25,844,423 \r\n \r\n14,802,684 4,708,022 \r\n4,473,310 80,159 \r\n809,316 24,873,491 \r\n \r\nTotal Revenues \r\n \r\n77,897,238 \r\n \r\n73,383,730 \r\n \r\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 \r\nTotal Expenses \r\nIncrease in Net Position \r\n \r\n46,449,546 \r\n \r\n46,039,167 \r\n \r\n1,467,676 1,851,981 \r\n889,667 506,860 3,413,693 697,663 7,203,438 2,616,533 233,956 361,952 \r\n \r\n1,373,486 1,667,814 \r\n868,186 492,227 3,180,417 966,269 5,290,090 2,638,705 190,010 218,947 \r\n \r\n1,889,931 4,622,681 \r\n476,458 \r\n \r\n1,885,042 4,389,436 \r\n596,649 \r\n \r\n72,682,035 \r\n \r\n69,796,445 \r\n \r\n$ \r\n \r\n5,215,203 $ \r\n \r\n3,587,285 \r\n \r\nvi \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 \r\nCost of Providing Services \r\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. \r\n \r\nTable 3 Governmental Activities \r\n \r\nTotal Cost of Services \r\n \r\nFiscal \r\n \r\nFiscal \r\n \r\nYear 2016 \r\n \r\nYear 2015 \r\n \r\nNet Cost of Services \r\n \r\nFiscal \r\n \r\nFiscal \r\n \r\nYear 2016 \r\n \r\nYear 2015 \r\n \r\nInstruction Support Services: \r\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 \r\n \r\n$ 46,449,546 $ 46,039,167 $ 10,724,016 $ 13,719,367 \r\n \r\n1,467,676 1,851,981 \r\n889,667 506,860 3,413,693 697,663 7,203,438 2,616,533 233,956 361,952 \r\n \r\n1,373,486 1,667,814 \r\n868,186 492,227 3,180,417 966,269 5,290,090 2,638,705 190,010 218,947 \r\n \r\n933,359 323,760 (91,072) (703,095) 1,426,114 691,521 4,868,895 1,545,891 230,197 \r\n78,130 \r\n \r\n988,564 276,735 (239,904) (859,146) 1,120,852 966,269 3,028,165 1,738,056 190,010 \r\n(2,486) \r\n \r\n1,889,931 4,622,681 \r\n476,458 \r\n \r\n1,885,042 4,389,436 \r\n596,649 \r\n \r\n149,065 (24,020) 476,458 \r\n \r\n(15,545) (221,382) 596,649 \r\n \r\nTotal Expenses \r\n \r\n$ 72,682,035 $ 69,796,445 $ 20,629,219 $ 21,286,204 \r\n \r\nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT'S FUNDS \r\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 and other financing sources over $78.3 million and total expenditures and other financing uses of $89.1 million in fiscal year 2016. Total governmental fund balances of approximately $12.9 million at June 30, 2016, decreased approximately $10.8 million from the prior year. \r\n \r\nvii \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 \r\n \r\nGeneral Fund Budget Highlights \r\n \r\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 2016, the School District amended its general fund budget as needed. \r\n \r\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. \r\n \r\nFor the general fund, the final actual revenues of $71.4 million were greater than the final budgeted amount of $61.2 million by approximately $10.2 million. This can be attributed to receiving more property taxes, state funds, federal funds, charges for services, and miscellaneous income than originally expected. \r\n \r\nThe general fund's final actual expenditures of $71.8 million were greater than the final budget amount of $68.5 by approximately $3.3 million. The School District believes it effectively managed its budget during the fiscal year. \r\n \r\nCAPITAL ASSETS AND DEBT ADMINISTRATION \r\n \r\nCapital Assets \r\n \r\nAt fiscal year ended June 30, 2016, the School District had over $86.2 million invested in capital assets, net of accumulated depreciation, all in governmental activities. These assets are made up of a broad range of items including buildings; land; land improvements; and food service, transportation and maintenance equipment. Table 4 reflects a summary of these balances, net of accumulated depreciation, as compared to the prior fiscal year. \r\n \r\nTable 4 Capital Assets (Net of Depreciation) \r\n \r\nGovernmental Activities \r\n \r\nFiscal \r\n \r\nFiscal \r\n \r\nYear 2016 \r\n \r\nYear 2015 \r\n \r\nLand Construction In Progress Building and Improvements Equipment Land Improvements \r\n \r\n$ 2,275,175 $ 2,275,175 \r\n \r\n11,473,178 \r\n \r\n1,124,641 \r\n \r\n70,089,918 \r\n \r\n71,884,506 \r\n \r\n1,003,575 \r\n \r\n1,109,026 \r\n \r\n1,381,680 \r\n \r\n1,438,952 \r\n \r\nTotal \r\n \r\n$ 86,223,526 $ 77,832,300 \r\n \r\nAdditional information about the School District's Capital Assets can be found in the Notes to the Basic Financial Statements. \r\n \r\nviii \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 \r\n \r\nDebt Administration \r\n \r\nAt June 30, 2016, the Board had $14.5 million in bonds outstanding with $2.4 million due within one year and $0.8 million in capital leases with $0.4 million due within one year. \r\nTable 5 Debt at June 30 \r\n \r\nGovernmental Activities \r\n \r\nFiscal Year 2016 \r\n \r\nFiscal Year 2015 \r\n \r\nGeneral Obligation Bonds $ 14,500,000 $ 19,161,897 \r\n \r\nCapital Lease \r\n \r\n833,747 \r\n \r\n415,724 \r\n \r\nTotal \r\n \r\n$ 15,333,747 $ 19,577,621 \r\n \r\nNet Pension Liabilities \r\n \r\nAt June 30, 2016 the School District reported liabilities for its proportionate share of the net pension liability. Reporting this liability was required by GASB No. 68 and GASB No. 71. \r\n \r\nFACTORS BEARING ON THE DISTRICT'S FUTURE \r\nCurrently known circumstances that are expected to have a significant effect on financial position or results of operations in future years are as follows: \r\n The School District is financially stable. The School District's operating millage for fiscal year 2015 was 16.274. It was rolled back in fiscal year 2016 to 16.183. \r\n The general fund had a fund balance as of June 30, 2016 of $9,063,289 which is down $864,860 from prior year. In fiscal year 2017, $5,000,000 was loaned from the general fund to the capital projects fund to complete the construction of the Polk County College and Career Academy. The interfund loan will be paid back in future years with Special Projects Local Option Sales Tax (SPLOST) proceeds. \r\n The School District is financially challenged by the State's continuing reduction of state revenue appropriations to local school districts. However, the School District's is scheduled to receive a $2,783,508 increase of state revenue for fiscal year 2017. \r\n The School District student population increased from 7,512 in fiscal year 2015 to 7,595 in fiscal year 2016. The School District will continue to renovate the existing 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, general obligation bonds and state capital outlay grants. Polk County College and Career Academy will be constructed on the existing Cedartown High School and Rockmart High School Campuses. An Athletic Facility will be constructed at Rockmart High School. Renovations will be made at Eastside Elementary. Technology upgrades will also be made. \r\n \r\nix \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2016  In fiscal year 2015, the Board adopted Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions and GASB Statement No. 71, Pension Transition for Contributions made Subsequent to the Measurement Datean amendment of GASB No. 68. Implementation of these statements required the School District to record a charge (decrease) to the government-wide net position at July 1, 2014 for the School District's share of the net pension liability for the pension plans administered through the Teachers Retirement System of Georgia (TRS), Employees' Retirement System of Georgia (ERS) and Polk County School's Employer Sponsored Pension Plan. Readers should understand implementation of (GASB) Statements No. 68 and No. 71 will not affect the School District's Governmental Activities Fund Statements. 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 Mrs. Tammy McDonald, Chief Financial Officer, Polk County School District, 612 South College Street, Cedartown, Georgia 30125. You may also email your questions to Mrs. McDonald at tammy@polk.k12.ga.us. \r\nx \r\n \r\n POLK COUNTY SCHOOL DISTRICT \r\n \r\n (This page left intentionally blank) \r\n \r\n  nt. \r\n \r\n  - \r\n \r\n      (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY \r\nREPORTING ENTITY \r\nThe Polk County School District (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. \r\nNOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES \r\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. \r\nBASIS OF PRESENTATION \r\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. \r\nGOVERNMENT-WIDE STATEMENTS: \r\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. \r\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: \r\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. \r\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. \r\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. \r\nThe Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities. \r\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. \r\n \r\n- 11 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\nFUND FINANCIAL STATEMENTS \r\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. \r\nThe School District reports the following major governmental funds: \r\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. \r\n The 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 for capital outlay expenditures, including the acquisition or construction of capital facilities and other capital assets. \r\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. \r\nThe School District reports the following fiduciary fund types: \r\n Private purpose trust funds are used to report trust arrangements under which income is to be used for the purpose of clothing and medical needs for disadvantaged students at the Superintendent's discretion and a scholarship for a student graduating from Rockmart High School. \r\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. \r\n Pension trust fund accounts for the activities of Polk County School District Social Security Replacement Plan, a single employer defined benefit pension plan for the group of employees covered by the Public School Employees Retirement System (PSERS). \r\nBASIS OF ACCOUNTING \r\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. \r\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. \r\n \r\n- 12 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"I\" \r\n \r\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 and compensated absences, 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. \r\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. \r\nNEW ACCOUNTING PRONOUNCEMENTS \r\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. \r\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. \r\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. \r\n \r\n- 13 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"I\" \r\n \r\nFISCAL YEAR ENDS \r\nAll funds are reported using fiscal years which end on June 30, except the defined benefit pension plan (fiduciary fund), which has a fiscal year ending December 31. \r\nCASH AND CASH EQUIVALENTS \r\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. \r\nINVESTMENTS \r\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. \r\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. \r\nFor accounting purposes, certificates of deposit are classified as investments if they have an original maturity greater than three months when acquired. \r\nRECEIVABLES \r\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. \r\nINVENTORIES \r\nFood Inventories \r\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. \r\nRESTRICTED ASSETS \r\nCertain resources set aside for repayment of debt are classified as restricted assets on the Statement of net position because their use is limited by applicable debt statutes, e.g. Qualified Zone Academy Bond sinking funds. \r\n \r\n- 14 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"I\" \r\n \r\nCAPITAL ASSETS \r\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. \r\n \r\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. \r\n \r\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. \r\n \r\nCapitalization thresholds and estimated useful lives of capital assets reported in the government-wide statements are as follows: \r\n \r\nCapitalization Policy \r\n \r\nEstimated Useful Life \r\n \r\nLand Land Improvements Buildings and Improvements Equipment Intangible Assets \r\n \r\nAll $50,000.00 $50,000.00 $50,000.00 $50,000.00 \r\n \r\nN/A 20 to 60 years 25 to 60 years \r\n5 to 50 years 10 to 20 years \r\n \r\nDEFERRED OUTFLOWS/INFLOWS OF RESOURCES \r\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. \r\n \r\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. \r\n \r\nCOMPENSATED ABSENCES \r\nCompensated absences payable consists of vacation leave employees earned based on services already rendered. \r\n \r\nVacation leave of 10 days is awarded annually to all full time personnel employed on a twelve month basis with less than 15 years of experience and 15 days annually to all full time personnel employed on a twelve month basis with between 15 and 40 years of experience. Twelve month employees with 40 or more years of service to the School District are eligible for 5 additional vacation days annually. No other employees are eligible to earn vacation leave. \r\n \r\nFor twelve-month employees with 15 or more years of experience, all unused vacation days may be carried forward into the next employment year up to and including June 30. This is a maximum of 15 days earned from previous year. Upon expiration of this limit, a maximum of 5 unused vacation days may be carried forward. Therefore, this employee could have a maximum of 20 days of acquired vacation at the start of a new fiscal year. \r\n \r\n- 15 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"I\" \r\n \r\nFor twelve-month employees with less than 15 years of experience, all unused vacation days may be carried forward into the next employment year up to and including June 30. This is a maximum of 10 days earned from previous year. Upon expiration of this limit, a maximum of 5 unused vacation days may be carried forward. Therefore, this employee could have a maximum of 15 days of acquired vacation at the start of a new fiscal year. \r\nUpon terminating employment, the School District pays all unused and unforfeited vacation benefits to employees. Accordingly, vacation benefits are accrued as a liability in the government-wide financial statements. A liability for these amounts is reported in the governmental fund financial statements only if they have matured, for example, as a result of employee resignations and retirements by fiscal year end. \r\nMembers of the Teachers Retirement System of Georgia (TRS) may apply unused sick leave toward early retirement. The liability for early retirement will be borne by TRS rather than by the individual School Districts. Otherwise, sick leave does not vest with the employee, and no liability is reported in the School District's financial statements. \r\nLONG-TERM LIABILITIES AND BOND DISCOUNTS/PREMIUMS \r\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. \r\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. \r\nPENSIONS \r\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. \r\nFUND BALANCES \r\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. \r\nThe School District's fund balances are classified as follows: \r\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. \r\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. \r\n \r\n- 16 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\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. \r\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. \r\nUSE OF ESTIMATES \r\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. \r\nPROPERTY TAXES \r\nThe Polk County Board of Commissioners adopted the property tax levy for the 2015 tax digest year (calendar year) on August 20, 2015 (levy date) based on property values as of January 1, 2015. Taxes were due on December 1, 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 Polk 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 $13,986,476.25. \r\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): \r\n \r\nSchool Operations \r\n \r\n16.183 mills \r\n \r\nAdditionally, Title Ad Valorem Tax revenues, at the fund reporting level, amounted to $1,070,906.82 during fiscal year ended June 30, 2016. \r\nSALES TAXES \r\nEducation Special Purpose Local Option Sales Tax (ESPLOST), at the fund reporting level, during the year amounted to $4,521,779.21 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. \r\n \r\n- 17 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 3: BUDGETARY DATA \r\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, 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. \r\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. \r\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. \r\nNOTE 4: DEPOSITS, CASH EQUIVALENTS AND INVESTMENTS \r\nCOLLATERALIZATION OF DEPOSITS \r\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. \r\nAcceptable security for deposits consists of any one of or any combination of the following: \r\n(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, \r\n(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, \r\n(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia, \r\n(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, \r\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, \r\n(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and \r\n \r\n- 18 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\n \r\nCATEGORIZATION OF DEPOSITS \r\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, School District had deposits with a carrying amount of $12,588,853.47, and a bank balance of $14,049,671.44. The bank balances insured by Federal depository insurance were $929,972.47 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 $1,253,899.00. \r\n \r\nAt June 30, 2016, $11,743,829.97 of the School District's bank balance was exposed to custodial credit risk as follows: \r\n \r\nUninsured and Uncollateralized Uninsured with collateral held by the pledging \r\nfinancial institution Uninsured with collateral held by the pledging \r\nfinancial institution's trust department or agent but not in the School District's name \r\n \r\n$ \r\n \r\n121,970.00 \r\n \r\n- \r\n \r\n11,743,829.97 \r\n \r\nTotal \r\n \r\n$ \r\n \r\n11,865,799.97 \r\n \r\nReconciliation of cash and cash equivalents balances to carrying value of deposits: \r\n \r\nStatement of Net Position \r\n \r\nCash and cash equivalents \r\n \r\n$ \r\n \r\nStatement of Fiduciary Net Position \r\n \r\nCash and cash equivalents \r\n \r\nTotal cash and cash equivalents \r\nAdd: Deposits with original maturity of three months or more reported as investments \r\n \r\nLess: Investment pools reported as cash and cash equivalents \r\nGeorgia Fund 1 \r\n \r\n14,223,788.70 484,426.09 \r\n14,708,214.79 10,419.42 \r\n2,129,780.74 \r\n \r\nTotal carrying value of deposits - June 30, 2016 \r\n \r\n$ 12,588,853.47 \r\n \r\nCATEGORIZATION OF CASH EQUIVALENTS \r\nThe School District reported cash equivalents of $2,129,780.74 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. \r\n- 19 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\nCATEGORIZATION OF INVESTMENTS \r\nAt June 30, 2016, the School District had the following investments: \r\n \r\nInvestment Type \r\n \r\nFair Value \r\n \r\nInvestment Maturity Less Than 1 Year \r\n \r\nDebt Securities U. S. Agencies Implicitly Guaranteed $ \r\n \r\n1,590,503.52 $ 1,590,503.52 \r\n \r\nOther Investments Bond Mutual Funds Equity Mutual Funds \r\n \r\n1,381,205.38 1,777,126.96 \r\n \r\nTotal Investments $ \r\n \r\n4,748,835.86 \r\n \r\nFair Value of Investments \r\nThe School District measures and records its investments using fair value measurement guidelines established by generally accepted accounting principles. These guidelines recognize a three-tiered fair value hierarchy, as follows: \r\nLevel 1: Quoted prices for identical measurements in active markets; \r\nLevel 2: Observable inputs other than quoted market prices; and, \r\nLevel 3: Unobservable inputs. \r\nThe School District has the following recurring fair value measurements as of June 30, 2016: \r\nU.S. Agencies Debt Securities of $1,590,503.52, Mutual Bond Funds of $1,381,205.38, and Equity Mutual Funds of $1,777,126.96 are valued using market observable information for identical or similar instruments in the market. (Level 2 inputs) \r\nInterest Rate Risk \r\nInterest rate risk is the risk that changes in interest rates of debt investment will adversely affect the fair value of an investment. The School District does not have a formal policy for managing interest rate risk. \r\nCustodial Credit Risk \r\nCustodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, the School District will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The School District does not have a formal policy for managing custodial credit risk. \r\nAt June 30, 2016, $3,367,630.48 of the School District's applicable investments were held by the investment's counterparty, not in the School District's name. \r\n \r\n- 20 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"I\" \r\n \r\nCredit Quality Risk Credit quality risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. State law limits investments to those prescribed O.C.G.A. 36-83-4. The School District does not have a formal policy that would further limit its investment choices or one that addresses credit risk. \r\nThe investments subject to credit quality risk are reflected below: \r\n \r\nRated Debt Investments \r\n \r\nFair Value \r\n \r\nQuality Ratings \r\n \r\nA \r\n \r\nUnrated \r\n \r\nDebt Securities U. S. Agencies Implicitly Guaranteed Mutual Bond Fund \r\n \r\n$ \r\n \r\n1,590,503.52 \r\n \r\n- $ \r\n \r\n1,590,503.52 \r\n \r\n1,381,205.38 $ \r\n \r\n1,381,205.38 \r\n \r\n- \r\n \r\nTotals by Quality Ratings \r\n \r\n$ \r\n \r\n2,971,708.90 $ \r\n \r\n1,381,205.38 $ \r\n \r\n1,590,503.52 \r\n \r\nConcentration of Credit Risk \r\nConcentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The School District does not have a formal policy for managing concentration of credit risk. More than 5% of the School District's investments are in Mutual Equity Funds, Mutual Bond Funds and Federal National Mortgage Association (FNMA) Discount Note. These investments are 37%, 29% and 34%, respectively, of the School District's total investments. \r\nNOTE 5: RESTRICTED ASSETS \r\nCertain resources set aside for repayment of debt are classified as restricted assets on the Statement of Net Position because their use is limited by applicable debt statues, e.g. Qualified Zone Academy Bond Sinking Funds. \r\n \r\n- 21 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 6: CAPITAL ASSETS \r\nThe following is a summary of changes in the capital assets for governmental activities during the fiscal year: \r\n \r\nBalances July 1, 2015 \r\n \r\nIncreases \r\n \r\nDecreases \r\n \r\nBalances June 30, 2016 \r\n \r\nGovernmental Activities Capital Assets, Not Being Depreciated: \r\nLand Construction in Progress \r\n \r\n$ \r\n \r\n2,275,174.50 $ \r\n \r\n- $ \r\n \r\n1,124,641.21 \r\n \r\n10,348,537.01 \r\n \r\n- $ \r\n \r\n2,275,174.50 \r\n \r\n- \r\n \r\n11,473,178.22 \r\n \r\nTotal Capital Assets Not Being Depreciated \r\n \r\n3,399,815.71 \r\n \r\n10,348,537.01 \r\n \r\n- \r\n \r\n13,748,352.72 \r\n \r\nCapital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements \r\nLess Accumulated Depreciation for: Buildings and Improvements Equipment Land Improvements \r\n \r\n92,659,271.09 4,617,104.70 2,594,719.05 \r\n20,774,765.23 3,508,079.12 1,155,767.10 \r\n \r\n177,014.00 \r\n- \r\n1,794,587.55 282,464.98 57,271.82 \r\n \r\n- \r\n \r\n92,659,271.09 \r\n \r\n- \r\n \r\n4,794,118.70 \r\n \r\n- \r\n \r\n2,594,719.05 \r\n \r\n- \r\n \r\n22,569,352.78 \r\n \r\n- \r\n \r\n3,790,544.10 \r\n \r\n- \r\n \r\n1,213,038.92 \r\n \r\nTotal Capital Assets, Being Depreciated, Net \r\n \r\n74,432,483.39 \r\n \r\n(1,957,310.35) \r\n \r\n- \r\n \r\n72,475,173.04 \r\n \r\nGovernmental Activity Capital Assets - Net $ 77,832,299.10 $ 8,391,226.66 $ \r\n \r\n- $ 86,223,525.76 \r\n \r\nCurrent year depreciation expense by function is as follows: \r\n \r\nInstruction Support Services \r\nStudent Transportation Services Other Support Services Food Services \r\n \r\n$ \r\n \r\n262,627.08 \r\n \r\n17,280.00 \r\n \r\n$ 1,827,661.94 \r\n279,907.08 26,755.33 \r\n \r\n$ 2,134,324.35 \r\n \r\nNOTE 7: INTERFUND TRANSFERS INTERFUND TRANSFERS Interfund transfers for the year ended June 30, 2016, consisted of the following: \r\n \r\nTransfers to \r\n \r\nTransfers From \r\n \r\nCapital \r\n \r\nGeneral \r\n \r\nProjects \r\n \r\nFund \r\n \r\nFund \r\n \r\nDebt Service Fund \r\n \r\n$ 465,366.98 $ 208,044.20 \r\n \r\nTransfers are used to move property tax revenues collected by the general fund and bond proceeds collected by the capital projects fund to the debt service fund for the payment of principal and interest on general long-term debt. \r\n \r\n- 22 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 8: LONG-TERM LIABILITIES The changes in long-term liabilities during the fiscal year for governmental activities, were as follows: \r\n \r\nBalance July 1, 2015 \r\n \r\nAdditions \r\n \r\nGovernmental Activities \r\n \r\nBalance \r\n \r\nDeductions \r\n \r\nJune 30, 2016 \r\n \r\nDue Within One Year \r\n \r\nGeneral Obligation Bonds \r\n \r\n$ \r\n \r\nQualified Zone Academy Bonds \r\n \r\nAppreciation Bonds \r\n \r\n12,500,000.00 $ 2,000,000.00 4,661,897.23 \r\n \r\n- $ 193,102.77 \r\n \r\n- $ 4,855,000.00 \r\n \r\n12,500,000.00 $ 2,000,000.00 - \r\n \r\n2,410,000.00 - \r\n \r\nTotal Bond Debt \r\n \r\n19,161,897.23 \r\n \r\n193,102.77 \r\n \r\n4,855,000.00 \r\n \r\n14,500,000.00 \r\n \r\n2,410,000.00 \r\n \r\nCapital Leases Compensated Absences (1) Bond Premiums Amortized \r\n \r\n1,333,142.64 130,378.51 \r\n1,380,508.14 \r\n \r\n42,700.90 \r\n- \r\n \r\n499,395.93 35,525.29 \r\n230,084.69 \r\n \r\n833,746.71 137,554.12 1,150,423.45 \r\n \r\n415,724.29 - \r\n230,084.69 \r\n \r\n$ 22,005,926.52 $ 235,803.67 $ 5,620,005.91 $ 16,621,724.28 $ 3,055,808.98 \r\n \r\n(1) The portion of compensated absences due within one year has been determined to be immaterial to the basic financial statements. \r\n \r\nGENERAL OBLIGATION DEBT OUTSTANDING \r\nThe School District's bonded debt consists of various issues 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. \r\nGeneral obligation bonds currently outstanding are as follows: \r\n \r\nDescription \r\n \r\nInterest Rates \r\n \r\nIssue Date \r\n \r\nMaturity Date \r\n \r\nAmount Issued \r\n \r\nAmount Outstanding \r\n \r\nGeneral Government - Series 2014 2.00% - 5.00% \r\n \r\n7/22/2014 \r\n \r\n4/1/2021 $ 12,500,000.00 $ 12,500,000.00 \r\n \r\nThe following schedule details debt service requirements to maturity for the School District's total general obligation bonds payable: \r\n \r\nFiscal Year Ended June 30: \r\n \r\nGeneral Obligation Debt \r\n \r\nPrincipal \r\n \r\nInterest \r\n \r\nUnamortized Bond Premium \r\n \r\n2017 2018 2019 2020 2021 \r\n \r\n$ \r\n \r\n2,410,000.00 $ \r\n \r\n2,450,000.00 \r\n \r\n2,490,000.00 \r\n \r\n2,545,000.00 \r\n \r\n2,605,000.00 \r\n \r\n503,300.00 $ 455,100.00 357,100.00 257,500.00 130,250.00 \r\n \r\n230,084.69 230,084.69 230,084.69 230,084.69 230,084.69 \r\n \r\nTotal Principal and Interest \r\n \r\n$ \r\n \r\n12,500,000.00 $ \r\n \r\n1,703,250.00 $ \r\n \r\n1,150,423.45 \r\n \r\n- 23 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"I\" \r\n \r\nQUALIFIED ZONE ACADEMY BONDS (QZAB) \r\nSection 226 of the Taxpayer Relief Act of 1997 (Public Law 105-34) provides for a source of capital at no or at nominal interest rates for costs incurred by School Districts in connection with the establishment of special academic programs, in partnership with the business community. The School District, in agreement with Regions Bank, has entered into such an arrangement. \r\n \r\nThis agreement establishes a method of repayment for qualified interest-free debt instrument. The agreement requires the School District to deposit funds annually into a sinking fund account. The amount on deposit at June 30, 2016 was $1,590,503.52. \r\nDebt currently outstanding under Qualified Zone Academy Bonds is as follows: \r\n \r\nPurpose \r\n \r\nInterest Rate \r\n \r\nIssue Date \r\n \r\nMaturity Date \r\n \r\nAmount Issued \r\n \r\nAmount Outstanding \r\n \r\nGeneral Government - QZAB - Series 2006 \r\n \r\n0.00% \r\n \r\n12/5/2006 \r\n \r\n12/15/2022 $ 2,000,000.00 $ 2,000,000.00 \r\n \r\nThe following schedule reports the annual required Qualified Zone Academy Bond payments: \r\n \r\nFiscal Year Ended June 30: \r\n \r\nPrincipal \r\n \r\n2023 \r\n \r\n$ \r\n \r\n2,000,000.00 \r\n \r\nCAPITAL LEASES The School District has acquired computer equipment under the provisions of various long-term lease agreements classified as capital leases for accounting purposes because they provide for a transfer of ownership by the end of the lease term. \r\nCapital leases currently outstanding are as follows: \r\nThe following is a schedule of total capital lease payments: \r\n \r\nPurpose \r\n \r\nInterest Rates \r\n \r\nIssue Date \r\n \r\nMaturity Date \r\n \r\nAmount Issued \r\n \r\nAmount Outstanding \r\n \r\nComputer Hardware Computer Hardware \r\n \r\n2.5500% 2.3578% \r\n \r\n8/17/2014 3/25/2015 \r\n \r\n8/17/2017 $ 7/1/2018 \r\n \r\n473,266.05 $ 1,192,934.70 \r\n \r\n236,623.53 597,123.18 \r\n \r\n$ \r\n \r\n1,666,200.75 $ \r\n \r\n833,746.71 \r\n \r\nFiscal Year Ended June 30: \r\n2017 2018 \r\nTotal Principal and Interest \r\n \r\nPrincipal \r\n \r\n$ \r\n \r\n415,724.29 $ \r\n \r\n418,022.42 \r\n \r\n$ \r\n \r\n833,746.71 $ \r\n \r\nInterest \r\n4,610.96 2,312.83 \r\n6,923.79 \r\n \r\nCOMPENSATED ABSENCES \r\nCompensated absences represent obligations of the School District relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. Typically, the general fund is the fund used to liquidate this long-term debt. The School District uses the vesting method to compute compensated absences. \r\n- 24 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 9: RISK MANAGEMENT \r\nINSURANCE \r\nCommercial Insurance \r\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. \r\nUNEMPLOYMENT COMPENSATION \r\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. \r\nChanges in the unemployment compensation claims liability during the last two fiscal years are as follows: \r\n \r\nBeginning of Year Liability \r\n \r\nClaims and Changes in Estimates \r\n \r\nClaims Paid \r\n \r\nEnd of Year Liability \r\n \r\n2015 \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n11,211.00 \r\n \r\n$ \r\n \r\n11,211.00 \r\n \r\n$ \r\n \r\n- \r\n \r\n2016 \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n7,074.00 \r\n \r\n$ \r\n \r\n7,074.00 \r\n \r\n$ \r\n \r\n- \r\n \r\nSURETY BOND The School District purchased a surety bond to provide additional insurance coverage as follows: \r\n \r\nPosition Covered \r\n \r\nAmount \r\n \r\nSuperintendent \r\n \r\n$ \r\n \r\n50,000.00 \r\n \r\nNOTE 10: FUND BALANCE CLASSIFICATION DETAILS \r\nThe School District's financial statements include the following amounts presented in the aggregate at June 30, 2016: \r\n \r\nNonspendable Inventories \r\nRestricted Continuation of Federal Programs Capital Projects Debt Service Continuation of State Programs \r\nAssigned School Activity Accounts Subsequent Period Expenditures \r\nUnassigned \r\n \r\n$ \r\n \r\n76,345.83 \r\n \r\n$ 930,604.48 57,355.67 \r\n3,791,089.30 28,972.33 \r\n \r\n4,808,021.78 \r\n \r\n497,811.95 3,185,260.06 \r\n \r\n3,683,072.01 4,344,294.62 \r\n \r\nFund Balance, June 30, 2016 \r\n \r\n$ 12,911,734.24 \r\n \r\n- 25 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\nNOTE 11: SIGNIFICANT COMMITMENTS \r\nCOMMITMENTS UNDER CONSTRUCTION CONTRACTS \r\nThe following is an analysis of significant outstanding construction or renovation contracts executed by the School District as of June 30, 2016, together with funding available: \r\n \r\nProject \r\nPolk County College and Career Academy - CHS Polk County College and Career Academy - RHS \r\n \r\nUnearned Executed Contracts (1) \r\n \r\nPayments through June 30, 2016 (2) \r\n \r\nFunding Available From State (1) \r\n \r\n$ \r\n \r\n9,660,667.82 $ \r\n \r\n3,066,166.92 $ \r\n \r\n5,643,573.81 \r\n \r\n234,044.28 \r\n \r\n371,659.72 \r\n \r\n- \r\n \r\n$ \r\n \r\n9,894,712.10 $ \r\n \r\n3,437,826.64 $ \r\n \r\n5,643,573.81 \r\n \r\n(1) The amounts described are not reflected in the basic financial statements. \r\n(2) Payments include Contracts and Retainages Payable at year-end. \r\nNOTE 12: SIGNIFICANT CONTINGENT LIABILITIES \r\nFEDERAL GRANTS \r\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. \r\nLITIGATION \r\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. \r\nNOTE 13: POST-EMPLOYMENT BENEFITS \r\nGEORGIA SCHOOL PERSONNEL POST-EMPLOYMENT HEALTH BENEFIT FUND \r\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. \r\n \r\n- 26 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\n \r\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. \r\n \r\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: \r\n \r\nFor certificated teachers, librarians and regional educational service agencies and certain other eligible participants: \r\n \r\nJuly 1, 2015  June 30, 2016 \r\n \r\n$945.00 per member per month \r\n \r\nFor non-certificated school personnel: \r\n \r\nJuly 1, 2015  December 31, 2015 $596.20 per member per month \r\n \r\nJanuary 1, 2016  June 30, 2016 $746.20 per member per month \r\n \r\nNo additional contribution was required by the Board for fiscal year 2016 nor contributed to the School OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the School plan for other post-employment benefits and are subject to appropriation. \r\n \r\nThe School District's combined active and retiree contributions to the health insurance plans, which equaled the required contribution, for the current fiscal year and the preceding two fiscal years were as follows: \r\n \r\nFiscal Year \r\n \r\nPercentage Contributed \r\n \r\nRequired Contribution \r\n \r\n2016 2015 2014 \r\n \r\n100% \r\n \r\n$ \r\n \r\n100% \r\n \r\n$ \r\n \r\n100% \r\n \r\n$ \r\n \r\n7,164,882.51 6,689,769.90 6,508,004.52 \r\n \r\n- 27 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 14: RETIREMENT PLANS \r\nThe School District participates in various retirement plans administered by the State of Georgia, as further explained below. \r\nTEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) \r\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. \r\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. \r\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 payroll, of which 14.08% of payroll was required from the School District and 0.19% of payroll required from the State. For the current fiscal year, employer contributions to the pension plan were $5,360,865.43 and $60,381.69 from the School District and the State, respectively. \r\nEMPLOYEES' RETIREMENT SYSTEM \r\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. \r\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. \r\n \r\n- 28 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\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. \r\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 contractually required contribution rate, actuarially determined annually, for the year ended June 30, 2016 was 24.72% of annual covered payroll for old and new plan members and 21.69% for GSEPS members. 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 $27,606.43 for the current fiscal year. \r\nPUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM (PSERS) \r\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. \r\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. \r\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. \r\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. \r\n \r\n- 29 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"I\" \r\n \r\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 $118,570.00. \r\nPension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions \r\nAt June 30, 2016, the School District reported a liability of $52,779,499.00 for its proportionate share of the net pension liability for TRS ($52,640,658.00) and ERS ($138,841.00). \r\nThe TRS net pension liability reflected a reduction for support provided to the School District by the State of Georgia for certain public school support personnel. The amount recognized by the School District as its proportionate share of the net pension liability, the related State of Georgia support, and the total portion of the net pension liability that was associated with the School District were as follows: \r\n \r\nSchool District's proportionate share of the net pension liability \r\n \r\n$ 52,640,658.00 \r\n \r\nState of Georgia's proportionate share of the net pension liability associated with the School District \r\n \r\n600,892.00 \r\n \r\nTotal \r\n \r\n$ 53,241,550.00 \r\n \r\nThe net pension liability for TRS and ERS 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 and ERS during the fiscal year ended June 30, 2015. \r\nAt June 30, 2015, the School District's TRS proportion was 0.345774%, which was a decrease of 0.000669% from its proportion measured as of June 30, 2014. At June 30, 2015, the School District's ERS proportion was 0.003427%, which was an increase of 0.000034% from its proportion measured as of June 30, 2014. \r\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 $485,473.00. \r\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. \r\nFor the year ended June 30, 2016, the School District recognized pension expense of $3,051,071.00 for TRS, $10,332.00 for ERS and $28,951.00 for PSERS and revenue of $34,849.00 for TRS and $28,951.00 for PSERS. The revenue is support provided by the State of Georgia. For TRS the State of Georgia support is provided only for certain support personnel. \r\n \r\n- 30 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"I\" \r\n \r\nAt June 30, 2016, the School District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: \r\n \r\nTRS Deferred Outflows of Resources \r\n \r\nDeferred Inflows of Resources \r\n \r\nERS \r\n \r\nDeferred \r\n \r\nDeferred \r\n \r\nOutflows of \r\n \r\nInflows of \r\n \r\nResources \r\n \r\nResources \r\n \r\nDifferences between expected and actual \r\n \r\nexperience \r\n \r\n$ \r\n \r\n- \r\n \r\n$ 463,002.00 $ \r\n \r\n- \r\n \r\n$ \r\n \r\n1,109.00 \r\n \r\nNet difference between projected and actual earnings on pension plan investments \r\n \r\n- \r\n \r\n4,440,295.00 \r\n \r\n- \r\n \r\n10,018.00 \r\n \r\nChanges in proportion and differences between School District contributions and proportionate share of contributions \r\n \r\n- \r\n \r\n1,425,616.00 \r\n \r\n2,408.00 \r\n \r\n- \r\n \r\nSchool District contributions subsequent to the measurement date \r\n \r\n5,360,865.43 \r\n \r\n- \r\n \r\n27,606.43 \r\n \r\n- \r\n \r\nTotal \r\n \r\n$ 5,360,865.43 $ 6,328,913.00 $ 30,014.43 $ 11,127.00 \r\n \r\nThe School District contributions subsequent to the measurement date of $5,360,865.43 for TRS and $27,606.43 for ERS are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ended June 30, 2017. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: \r\n \r\nYear Ended June 30: \r\n \r\nTRS \r\n \r\nERS \r\n \r\n2017 2018 2019 2020 2021 \r\n \r\n$ \r\n \r\n(2,586,276.00) $ \r\n \r\n$ \r\n \r\n(2,586,276.00) $ \r\n \r\n$ \r\n \r\n(2,586,279.00) $ \r\n \r\n$ \r\n \r\n1,456,346.00 $ \r\n \r\n$ \r\n \r\n(26,428.00) $ \r\n \r\n(3,114.00) (4,518.00) (4,465.00) 3,378.00 \r\n- \r\n \r\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: \r\n \r\nTeachers Retirement System: \r\nInflation Salary increases Investment rate of return \r\n \r\n3.00% \r\n3.75%  7.00%, average, including inflation \r\n7.50%, net of pension plan investment expense, including inflation \r\n \r\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. \r\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. \r\n \r\n- 31 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"I\" \r\n \r\nEmployees' Retirement System: Inflation Salary increases Investment rate of return \r\n \r\n3.00% \r\n5.45%  9.25%, average, including inflation 7.50%, net of pension plan investment expense, including inflation \r\n \r\nMortality rates were based on the RP-2000 Combined Mortality Table for the periods after service retirement, for dependent beneficiaries, and for deaths in active service, and the RP-2000 Disabled Mortality Table set back eleven years for males for the period after disability retirement. \r\n \r\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. \r\n \r\nPublic School Employees Retirement System: \r\n \r\nInflation \r\n \r\n3.00% \r\n \r\nSalary increases \r\n \r\nN/A \r\n \r\nInvestment rate of return \r\n \r\n7.50%, net of pension plan investment expense, including inflation \r\n \r\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. \r\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. \r\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: \r\n \r\nAsset class \r\nFixed income Domestic large stocks Domestic mid stocks Domestic small stocks International developed market stocks International emerging market stocks \r\nTotal \r\n* Rates shown are net of the 3.00% assumed rate of inflation \r\n \r\nTarget allocation \r\n30.00% 39.70% \r\n3.70% 1.60% 18.90% 6.10% \r\n100.00% \r\n \r\nLong-term expected real rate of return* \r\n3.00% 6.50% 10.00% 13.00% 6.50% 11.00% \r\n \r\n- 32 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\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: \r\n \r\nTeachers Retirement System: \r\n \r\n1% Decrease (6.50%) \r\n \r\nCurrent Discount Rate (7.50%) \r\n \r\n1% Increase (8.50%) \r\n \r\nSchool District's proportionate share of \r\n \r\nthe net pension liability \r\n \r\n$ \r\n \r\n90,458,991.00 $ \r\n \r\n52,640,658.00 $ 21,469,353.00 \r\n \r\nEmployees' Retirement System: \r\n \r\nSchool District's proportionate share of \r\n \r\nthe net pension liability \r\n \r\n$ \r\n \r\n1% Decrease (6.50%) \r\n \r\nCurrent Discount Rate (7.50%) \r\n \r\n196,813.00 $ \r\n \r\n138,841.00 $ \r\n \r\n1% Increase (8.50%) \r\n89,419.00 \r\n \r\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. \r\nPOLK COUNTY SCHOOL DISTRICT SOCIAL SECURITY REPLACEMENT PLAN \r\nPlan description: As of January 2004, the Polk County School District established a single employer defined benefit pension plan for the group of employees covered under the Public Service Employees Retirement System (PSERS). Recognizing that PSERS was a limited defined benefit plan that does not meet the requirements of a qualified social security replacement plan, the new plan was established for these employees to meet the requirements of a social security replacement plan. \r\nThe Polk County School District Social Security Replacement Plan (Plan) provides a pension benefit for each participant at retirement, equal to 1.5% of the participant's Average Monthly Compensation multiplied by his Years of Credited Service up to forty (40) Years of Credited Service. Years of service subsequent to July 1, 1991, are counted for purposes of determining a participant's benefit. The funding method and determination of benefits payable are provided in or authorized by various sections of Title 47 of the Official Code of Georgia Annotated (\"O.C.G.A.\"). The Plan does not issue a separate financial report. \r\n \r\n- 33 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"I\" \r\n \r\nThe employee is always 100% vested in his accrued benefit in the Plan. \r\nThe Plan is funded by employer contributions held in trust by Reliance Trust Company. The Actuary for the plan is Swerdlin \u0026 Company. The Actuary determines the plan liabilities and required contributions on an annual basis. \r\nAs of January 1, 2016, there were 365 plan participants, consisting of the following: \r\n \r\nJanuary 1, 2016 \r\n \r\nActive Participants \r\n \r\n140 \r\n \r\nVested terminated participants \r\n \r\n133 \r\n \r\nRetirees, beneficiaries and disabled participants \r\n \r\n92 \r\n \r\n365 \r\nFunding Policy: Employees shall neither be required nor permitted to make contributions to the Plan. The Polk County School District (Employer) shall make the contributions required to fund the cost of the benefits provided to its eligible employees by this Plan. The Employer will make such contributions as necessary to fund the Plan in accordance with all applicable minimum funding standards under Georgia law. \r\nThe Employer's Annual Required Contribution is the actuarially determined amount necessary to fund the plan benefits. The current year required contribution is $315,891.00. The current contribution rate is 12.15% of annual covered payroll. \r\nInvestments: The Plan maintains an investment policy which fosters prudent and sound judgment in the management of plan assets to ensure safety of capital consistent with the fiduciary responsibility to the citizens of Georgia and which conforms to the Plan's investment policy. All investments are consistent with the School District's policy and applicable Federal and State laws. \r\nInvestments are reported at fair value. Securities are traded on a national or international exchange and are valued at the last reported sales price. The Plan's investment policy requires diversification of assets in an effort to avoid the risk of large losses and maximize the investment return to the Plan consistent with market and economic risk. \r\nAs of December 31, 2015, the Plan's assets are: \r\n \r\nAsset Class \r\nCash and Equivalent Domestic Equities International Equities Fixed Income \r\n \r\nPercent of Plan Assets \r\n \r\n$ \r\n \r\n371,970.00 \r\n \r\n1,617,044.96 \r\n \r\n160,082.00 \r\n \r\n1,381,205.38 \r\n \r\n$ \r\n \r\n3,530,302.34 \r\n \r\nFor the Plan's fiscal year ended December 31, 2015, the annual money-weighted rate of return on pension plan investments, net of investment expense, was (0.59)%. \r\n \r\n- 34 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"I\" \r\n \r\nThe following table summarizes the adopted asset allocation policy at June 30, 2016: \r\n \r\nAsset Class \r\n \r\nAdopted Asset Allocation \r\n \r\nDomestic Equities International Equities Fixed Income Cash \r\n \r\n40% to 50% 1% to 5% \r\n35% to 45% 1% to 5% \r\n \r\nTotal \r\n \r\n100% \r\n \r\nPension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to the Plan: \r\n \r\nThe components of the Net Pension Liability for the Plan at June 30, 2016 were as follows: \r\n \r\nTotal Pension Liability Plan Fiduciary Net Position \r\n \r\n$ 7,244,397.00 (3,529,073.00) \r\n \r\nNet Pension Liability \r\n \r\n$ 3,715,324.00 \r\n \r\nThe Plan's fiduciary net position as a percentage of total pension liability is 48.71%. \r\nThe net pension liability for the Plan was measured as of December 31, 2015. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of January 1, 2015. An expected total pension liability as of December 31, 2015 was determined using standard roll-forward techniques. \r\nFor the year ended June 30, 2016, the School District recognized pension expense of $460,258.00 for the Plan. \r\nAt June 30, 2016, the School District reported deferred outflows of resource and deferred inflows of resources related to the Plan from the following sources: \r\n \r\nNet difference between projected and actual earnings on pension plan investment \r\n \r\nDeferred Inflows of Resources \r\n \r\nDeferred Inflows of Resources \r\n \r\n$ 263,879.00 $ \r\n \r\n- \r\n \r\nDifferences between expected and actual experience \r\nChanges in actuarial assumptions \r\nTotal \r\n \r\n- \r\n \r\n310,604.00 \r\n \r\n332,494.00 \r\n \r\n- \r\n \r\n$ 596,373.00 $ 310,604.00 \r\n \r\n- 35 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"I\" \r\n \r\nAmounts reported as deferred outflows of resources and deferred inflows of resources related to the Plan will be recognized in pension expense as follows: \r\nYear Ended June 30: \r\n \r\n2016 2017 2018 2019 2020 Thereafter \r\n \r\n$ 72,373.00 $ 72,373.00 $ 72,371.00 $ 55,938.00 $ 2,294.00 $ 10,420.00 \r\n \r\nActuarial Methods and Assumptions: \r\n \r\nThe total pension liability was determined as of January 1, 2015 using the following actuarial assumptions and methods and adjusted to December 31, 2015 using generally accepted actuarial methods: \r\n \r\nInflation \r\n \r\n2.50% \r\n \r\nSalary increases \r\n \r\n3.50% \r\n \r\nInvestment rate of return \r\n \r\n7.00%, net of pension plan investment expense \r\n \r\nMortality rates were based on the 1994 GAR projected to 2002. \r\nThe long-term expected rate of return on the Plan investments was deterred using a building-block method in which best-estimate ranges of expected future real rate of return, net investment expenses and inflation, are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by expected inflation. Best estimate of arithmetic real rate of return for each major asset class, included in the Plan's target asset allocation as of December 31, 2015. \r\n \r\nAsset Class \r\n \r\nTarget Allocation \r\n \r\nLong-Term Expected Real Rate of Return* \r\n \r\nDomestic Equities International Equities Fixed Income Cash \r\n \r\n49% \r\n \r\n6.000% \r\n \r\n5% \r\n \r\n6.000% \r\n \r\n41% \r\n \r\n3.000% \r\n \r\n5% \r\n \r\n0.000% \r\n \r\n* Rates shown are net of the 2.50% assumed rate of inflation \r\nDiscount rate: The discount rate used to measure the total pension liability was the single equivalent discount rate of 5.40%, which increased from 5.11% at the prior measurement date. The projection of cash flows used to determine the discount rate assumed that employer contributions will be made at rates equal to actuarially determined contribution rates. Based on this assumption, the Plan's fiduciary net position was projected to be available to make all projected future benefits payments of current plan members through 2046, and the long-term expected rate of return of 7% was applied to this period. The 20-year taxfree municipal bond yield of 3.57% was applied after 2046. \r\n \r\n- 36 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2016 \r\n \r\nEXHIBIT \"I\" \r\n \r\nSensitivity of the Polk County School District's Net Pension Liability to changes in the discount rate: The following presents the School District's net pension liability calculated using the discount rate of 5.40%, as well as what the School District's net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (4.40%) or 1-percentage-point higher (6.40%) than the current rate: \r\n \r\nSchool District's proportionate share of the net pension liability \r\n \r\n1% Decrease (4.40%) \r\n \r\nCurrent discount rate (5.40%) \r\n \r\n1% Increase (6.40%) \r\n \r\n$ \r\n \r\n4,680,281.00 $ \r\n \r\n3,715,234.00 $ \r\n \r\n2,905,769.00 \r\n \r\n- 37 - \r\n \r\n (This page left intentionally blank) \r\n \r\n              (This page left intentionally blank) \r\n \r\n SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS \r\n \r\n (This page left intentionally blank) \r\n \r\n Greg S. Griffin \r\nSTATE AUDITOR \r\n(404) 656-2174 \r\n \r\nDEPARTMENT OF AUDITS AND ACCOUNTS \r\n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \r\nAugust 17, 2017 \r\n \r\nHonorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education \r\nand Superintendent and Members of the Polk County School District \r\nREPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH \r\nGOVERNMENT AUDITING STANDARDS \r\nINDEPENDENT AUDITOR'S REPORT \r\nLadies and Gentlemen: \r\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 Polk County School District (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 17, 2017. \r\nInternal Control Over Financial Reporting \r\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. \r\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. \r\n \r\n (This page left intentionally blank) \r\n \r\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. 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. \r\nCompliance and Other Matters \r\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. \r\nPurpose of this Report \r\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, 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. \r\nRespectfully submitted, \r\nGreg S. Griffin State Auditor \r\n \r\n (This page left intentionally blank) \r\n \r\n Greg S. Griffin \r\nSTATE AUDITOR \r\n(404) 656-2174 \r\n \r\nDEPARTMENT OF AUDITS AND ACCOUNTS \r\n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \r\nAugust 17, 2017 \r\n \r\nHonorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education \r\nand Superintendent and Members of the Polk County School District \r\nREPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE \r\nINDEPENDENT AUDITOR'S REPORT \r\nLadies and Gentlemen: \r\nReport on Compliance for Each Major Federal Program \r\nWe have audited Polk County School District (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. \r\nManagement's Responsibility \r\nManagement is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. \r\nAuditor's Responsibility \r\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. \r\n \r\n (This page left intentionally blank) \r\n \r\n We 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. \r\nOpinion on Each Major Federal Program \r\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. \r\nReport on Internal Control over Compliance \r\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. \r\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. \r\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. \r\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. \r\nRespectfully submitted, \r\nGreg S. Griffin State Auditor \r\n \r\n (This page left intentionally blank) \r\n \r\n SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT AUDITEE'S RESPONSE \r\nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2016 \r\nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\nNo matters were reported. \r\nPRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \r\nNo matters were reported. \r\n \r\n (This page left intentionally blank) \r\n \r\n SECTION IV FINDINGS AND QUESTIONED COSTS \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2016 \r\n \r\nI SUMMARY OF AUDITOR'S RESULTS \r\n \r\nFinancial Statements \r\n \r\nType of auditor's report issue: Governmental Activities; General Fund; Capital Projects Fund; Debt Service Fund; Aggregate Remaining Fund Information \r\nInternal control over financial reporting:  Material weakness identified?  Significant deficiency identified? \r\nNoncompliance material to financial statements noted: \r\n \r\nUnmodified \r\nNo None Reported \r\nNo \r\n \r\nFederal Awards \r\n \r\nInternal Control over major programs:  Material weakness identified?  Significant deficiency identified? \r\n \r\nNo None Reported \r\n \r\nType of auditor's report issued on compliance for major programs: All major programs \r\n \r\nUnmodified \r\n \r\nAny audit findings disclosed that are required to be reported in \r\n \r\naccordance with 2 CFR 200.516(a)? \r\n \r\nNo \r\n \r\nIdentification of major programs: \r\n \r\nCFDA Numbers \r\n \r\nName of Federal Program or Cluster \r\n \r\n10.553, 10.555 \r\n \r\nChild Nutrition Cluster \r\n \r\nDollar threshold used to distinguish between Type A and Type B programs: \r\n \r\n$750,000.00 \r\n \r\nAuditee qualified as low-risk auditee? \r\n \r\nNo \r\n \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n \r\nNo matters were reported. \r\n \r\nIII FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \r\n \r\nNo matters were reported. \r\n \r\n "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-be26-bp7-b2015-belec-p-btext","title":"Polk School District, Cedartown, 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":["2016-08-29"],"dcterms_description":["Annual financial report for the Polk 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":["Polk School District (Ga.)--Appropriations and expenditures--Periodicals.","Education--Georgia--Polk County--Auditing--Periodicals.","Education--Georgia--Polk County--Finance--Statistics--Periodicals.","Georgia Government Documents--Serial"],"dcterms_title":["Polk School District, Cedartown, 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-bp7-b2015-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-be26-bp7-b2015-belec-p-btext"],"dcterms_temporal":null,"dcterms_rights_holder":null,"dcterms_bibliographic_citation":null,"dlg_local_right":null,"dcterms_medium":["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":"POLK SCHOOL DISTRICT CEDARTOWN, GEORGIA \r\nANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED \r\nJUNE 30, 2015 (Including Independent Auditor's Reports) \r\n \r\n POLK COUNTY SCHOOL DISTRICT - TABLE OF CONTENTS - \r\n \r\nPage \r\n \r\nSECTION I \r\n \r\nFINANCIAL \r\n \r\nINDEPENDENT AUDITOR'S REPORT \r\n \r\nREQUIRED SUPPLEMENTARY INFORMATION \r\n \r\nMANAGEMENT'S DISCUSSION AND ANALYSIS \r\n \r\ni \r\n \r\nEXHIBITS \r\n \r\nBASIC FINANCIAL STATEMENTS \r\n \r\nDISTRICT-WIDE FINANCIAL STATEMENTS \r\n \r\nA \r\n \r\nSTATEMENT OF NET POSITION \r\n \r\n1 \r\n \r\nB \r\n \r\nSTATEMENT OF ACTIVITIES \r\n \r\n2 \r\n \r\nFUND FINANCIAL STATEMENTS \r\n \r\nC \r\n \r\nBALANCE SHEET \r\n \r\nGOVERNMENTAL FUNDS \r\n \r\n4 \r\n \r\nD \r\n \r\nRECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \r\n \r\nTO THE STATEMENT OF NET POSITION \r\n \r\n5 \r\n \r\nE \r\n \r\nSTATEMENT OF REVENUES, EXPENDITURES AND CHANGES \r\n \r\nIN FUND BALANCES \r\n \r\nGOVERNMENTAL FUNDS \r\n \r\n6 \r\n \r\nF \r\n \r\nRECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT \r\n \r\nOF REVENUES, EXPENDITURES AND CHANGES IN FUND \r\n \r\nBALANCES TO THE STATEMENT OF ACTIVITIES \r\n \r\n7 \r\n \r\nG \r\n \r\nSTATEMENT OF FIDUCIARY NET POSITION \r\n \r\nFIDUCIARY FUNDS \r\n \r\n8 \r\n \r\nH \r\n \r\nSTATEMENT OF CHANGES IN FIDUCIARY NET POSITION \r\n \r\nFIDUCIARY FUNDS \r\n \r\n9 \r\n \r\nI NOTES TO THE BASIC FINANCIAL STATEMENTS \r\n \r\n10 \r\n \r\nSCHEDULES \r\n \r\nREQUIRED SUPPLEMENTARY INFORMATION \r\n \r\n1 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY \r\n \r\n39 \r\n \r\nTEACHERS' RETIREMENT SYSTEM OF GEORGIA \r\n \r\n2 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY \r\n \r\n40 \r\n \r\nEMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \r\n \r\n3 SCHEDULE OF CONTRIBUTIONS  TEACHERS' RETIREMENT SYSTEM OF GEORGIA \r\n \r\n42 \r\n \r\n4 SCHEDULE OF CONTRIBUTIONS  EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA 44 \r\n \r\n5 SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS - \r\n \r\nSOCIAL SECURITY REPLACEMENT PLAN \r\n \r\n46 \r\n \r\n6 SCHEDULE OF CONTRIBUTIONS  SOCIAL SECURITY REPLACEMENT PLAN \r\n \r\n47 \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT - TABLE OF CONTENTS - \r\n \r\nSECTION I \r\nFINANCIAL \r\nSCHEDULES \r\n7 SCHEDULE OF INVESTMENT RETURNS  SOCIAL SECURITY REPLACEMENT PLAN 8 NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION 9 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES \r\nIN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND \r\nSUPPLEMENTARY INFORMATION \r\n10 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 11 SCHEDULE OF STATE REVENUE 12 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 13 ALLOTMENTS AND EXPENDITURES \r\nGENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) BY PROGRAM \r\n \r\nPage \r\n48 49 51 \r\n52 54 55 57 \r\n \r\nSECTION II \r\nCOMPLIANCE AND INTERNAL CONTROL REPORTS \r\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 \r\nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 \r\n \r\nSECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS \r\n \r\nSECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\n \r\n (This page left intentionally blank) \r\n \r\n SECTION I FINANCIAL \r\n \r\n (This page left intentionally blank) \r\n \r\n Greg S. Griffin \r\nSTATE AUDITOR \r\n(404) 656-2174 \r\n \r\nDEPARTMENT OF AUDITS AND ACCOUNTS \r\n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \r\nAugust 29, 2016 \r\n \r\nHonorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education \r\nand Superintendent and Members of the Polk County School District \r\n \r\nINDEPENDENT AUDITOR'S REPORT \r\nLadies and Gentlemen: \r\nReport on the Financial Statements \r\nWe have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Polk County School District, as of and for the year ended June 30, 2015, and the related notes to the financial statements (Exhibits A through I), which collectively comprise the Board's basic financial statements as listed in the table of contents. \r\nManagement's Responsibility for the Financial Statements \r\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. \r\nAuditor's Responsibility \r\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. \r\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 \r\n2015ARL-11 \r\n \r\n (This page left intentionally blank) \r\n \r\n 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. \r\nWe believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. \r\nOpinions \r\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 Polk County School District, as of June 30, 2015, 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. \r\nEmphasis of Matter \r\nAs described in Note 2 to the financial statements, in 2015, the Polk County School District 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. \r\nAs discussed in Note 2 to the financial statements, in 2015, the Polk County School District restated the prior period financial statements to correct an immaterial misstatement. Our opinion is not modified with respect to this matter. \r\nAs discussed in Note 2 to the financial statements, in 2015, Polk County School District restated beginning Net Positon for compensated absences. Our opinion is not modified with respect to this matter. \r\nOther Matters \r\nRequired Supplementary Information \r\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, Schedules of Contributions to Retirement Systems, the Schedule of Funding Progress and Employer Contributions, the Schedule of Investment Returns, 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 x, and pages 39 through 51, 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 \r\n2015ARL-11 \r\n \r\n (This page left intentionally blank) \r\n \r\n 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. \r\nOther Information \r\nOur audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Polk County School District's basic financial statements. The accompanying supplementary information, consisting of Schedules 10 through 13, 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. \r\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. \r\nOther Reporting Required by Government Auditing Standards \r\nIn accordance with Government Auditing Standards, we have also issued our report dated August 29, 2016, on our consideration of the Polk County 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 Polk County School District's internal control over financial reporting and compliance. \r\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. \r\nRespectfully submitted, \r\n \r\nGSG:er 2015ARL-11 \r\n \r\nGreg S. Griffin State Auditor \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 \r\nINTRODUCTION The intent of this discussion and analysis is to look at the District's financial performance as a whole. The reader should review the notes to the basic financial statements and the financial statements to enhance their understanding of the District's financial performance. The District's financial statements for the fiscal year ended June 30, 2015 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 District's activities and present both a short-term and long-term view of the District's finances. The fund financial statements provide information about all of the District's funds. FINANCIAL HIGHLIGHTS Key financial highlights for fiscal year 2015 are as follows: On the District-wide financial statements: \r\n District-wide net position at June 30, 2015 was approximately $21.2 million. Net position reflects the difference between assets of the District (including capital assets, net of depreciation) and deferred outflows of resources and all liabilities, both shortterm and long-term, and deferred inflows of resources. The net position at June 30, 2015 of $21.2 million represented a decrease of approximately $57.9 m i l l i o n when compared to the prior year. This large reduction is due to the application of unfunded liabilities from the Teacher's Retirement System of Georgia which were booked according to GASB Statement 68 and GASB Statement 71. \r\n The School District had over $69.8 million in expenses relating to governmental activities; only $48.5 million of these expenses were offset by program specific charges for services, operating and capital grants and contributions. However, the general revenues (primarily property and sales taxes) of approximately $24.9 million provided additional funding of these expenses. \r\n As stated above, general revenues accounted for $24.9 million or about 34% of all revenues totaling approximately $73.4 million. Program specific revenues in the form of charges for services, operating and capital grants, and contributions accounted for the balance of these revenues. \r\ni \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 \r\nOn the fund financial statements: \r\n Among major funds, the General Fund had approximately $69.0 million in revenues and $66.1 million in expenditures. The General Fund balance of approximately $9.9 million at June 30, 2015 increased by approximately $2.5 million from the prior year. \r\nOVERVIEW OF THE FINANCIAL STATEMENTS \r\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. \r\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. \r\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 Polk County School District, the General Fund, Capital Projects Funds, and Debt Service Funds are all considered to be major funds. The District has no non-major funds as defined by GASB Statement 34 for purposes of this report. \r\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. \r\nDistrict-wide Statements \r\nSince the Polk County School District has no operations that have been classified as \"Business Activities\", the District-wide financial statements are basically a consolidation of the entire 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 accounts all of the current year's revenues and expenses regardless of when cash is received or paid. \r\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. \r\nii \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 \r\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: \r\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 \r\nthe accrual basis of accounting  Allocate net position as follows: \r\no Net Investment in Capital Assets o Restricted net position is that with constraints placed on the use by external sources \r\nsuch as creditors, grantors, contributors or laws and regulations. o Unrestricted net position is net position that does not meet any of the above \r\nrestrictions. \r\nFund Financial Statements \r\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. \r\nThe District has two kinds of funds as discussed below: \r\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. \r\nFiduciary Funds  The School District is the trustee, or fiduciary, for assets that belong to clubs, organizations and others within the principals' accounts as well as an Employer Sponsored Pension Plan. 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. \r\niii \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 FINANCIAL 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 District's operating results. The District's net position, as measured in the Statement of Net Position, can be 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. In the case of the Polk County School District, assets and deferred outflows exceeded liabilities and deferred inflows by approximately $21.2 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 $21.2 million of net position, about $4.6 million was restricted for continuation of Federal and State programs and debt service. Accordingly, these funds were not available to meet the District's ongoing obligations to citizens and creditors. In addition, the District had over $69.6 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 deficit balance of unrestricted net position of approximately $53.0 million reflects the restatement of net position for net Pension liability adjustments as required by GASB Statement 68 and GASB Statement 71. \r\niv \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 \r\n \r\nTable 1 provides a summary of the School District's net position for this fiscal year as compared to the prior fiscal year. \r\n \r\nTable 1 Net Position \r\n \r\nGovernmental Activities \r\n \r\nFiscal \r\n \r\nFiscal \r\n \r\nYear 2015 \r\n \r\nYear 2014 (1) \r\n \r\nAssets Current and Other Assets Capital Assets, Net \r\n \r\n$ \r\n \r\n32,991,967 $ \r\n \r\n20,016,599 \r\n \r\n77,832,299 \r\n \r\n78,429,870 \r\n \r\nTotal Assets \r\n \r\n110,824,266 \r\n \r\n98,446,469 \r\n \r\nDeferred Outflows of Resources \r\n \r\n5,626,476 \r\n \r\nLiabilities Current and Other Liabilities Long-Term Liabilities \r\n \r\n8,584,309 69,271,109 \r\n \r\n8,067,920 11,318,749 \r\n \r\nTotal Liabilities \r\n \r\n77,855,418 \r\n \r\n19,386,669 \r\n \r\nDeferred Inflows of Resources \r\n \r\n17,422,809 \r\n \r\nNet Position Net Investment in Capital Assets Restricted Unrestricted (Deficit) \r\n \r\n69,614,797 4,568,834 \r\n-53,011,116 \r\n \r\n67,842,987 4,121,565 7,095,248 \r\n \r\nTotal Net Position \r\n \r\n$ \r\n \r\n21,172,515 $ \r\n \r\n79,059,800 \r\n \r\n(1) Fiscal year 2014 balances do not reflect the effects on the restatement of Net Position. See Note 2 in the Notes to the Basic Financial Statements for additional information. \r\n \r\nTotal net position decreased by $57.9 million in fiscal year 2015 from the prior year, including the effects of the restatement of beginning net position. The change in net position, as detailed in Table 2, is an increase of over $3.6 million, which excludes a decrease to beginning net position of $61.5 million for all restatement effects. \r\n \r\nv \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 \r\n \r\nTable 2 Change in Net Position \r\n \r\nRevenues Program Revenues Charges for Services and Sales Operating Grants and Contributions Capital Grants and Contributions \r\nTotal Program Revenues \r\nGeneral Revenues Taxes Property Taxes Sales Taxes Grant and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous \r\nSpecial Item Loss on Demolition of Building \r\nTotal General Revenues and Special Item \r\nTotal Revenues \r\nProgram Expenses Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Operations of Non-Instructional Services Enterprise Operation Food Services Interest on Short-Term and Long-Term Debt \r\nTotal Expenses \r\nIncrease in Net Position \r\n \r\nGovernental Activities \r\n \r\nFiscal Year \r\n \r\nFiscal Year \r\n \r\n2015 \r\n \r\n2014 (1) \r\n \r\n$ \r\n \r\n2,021,462 $ \r\n \r\n1,877,023 \r\n \r\n46,378,777 \r\n \r\n44,190,194 \r\n \r\n110,000 \r\n \r\n153,440 \r\n \r\n48,510,239 \r\n \r\n46,220,657 \r\n \r\n14,802,684 4,708,022 4,473,310 80,159 809,316 \r\n24,873,491 73,383,730 \r\n \r\n15,511,541 4,816,275 \r\n3,123,049 61,019 \r\n769,915 \r\n-37,427 24,244,372 70,465,029 \r\n \r\n46,039,167 \r\n \r\n44,074,150 \r\n \r\n1,373,486 1,667,814 \r\n868,186 492,227 3,180,417 966,269 5,290,090 2,638,705 190,010 218,947 \r\n \r\n1,444,953 1,325,595 \r\n990,700 881,440 2,911,949 672,509 4,876,118 2,943,972 \r\n34,926 325,963 \r\n \r\n1,885,042 4,389,436 \r\n596,649 \r\n \r\n2,102,752 3,933,826 \r\n532,858 \r\n \r\n69,796,445 \r\n \r\n67,051,711 \r\n \r\n$ \r\n \r\n3,587,285 $ \r\n \r\n3,413,318 \r\n \r\n(1) Fiscal year 2014 balances do not reflect the effects of the restatement of Net Position. See Note 2 in the Notes to the Basic Financial Statements for additional information. \r\n \r\nvi \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 \r\n \r\nCost of Providing Services \r\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. \r\nTable 3 Governmental Activities \r\n \r\nTotal Cost of Services \r\n \r\nFiscal \r\n \r\nFiscal \r\n \r\nYear 2015 \r\n \r\nYear 2014 (1) \r\n \r\nNet Cost of Services \r\n \r\nFiscal \r\n \r\nFiscal \r\n \r\nYear 2015 \r\n \r\nYear 2014 (1) \r\n \r\nInstruction \r\n \r\n$ 46,039,167 $ 44,074,150 $ \r\n \r\nSupport Services: \r\n \r\nPupil Services \r\n \r\n1,373,486 \r\n \r\n1,444,953 \r\n \r\nImprovement of Instructional Services \r\n \r\n1,667,814 \r\n \r\n1,325,595 \r\n \r\nEducational Media Services \r\n \r\n868,186 \r\n \r\n990,700 \r\n \r\nGeneral Administration \r\n \r\n492,227 \r\n \r\n881,440 \r\n \r\nSchool Administration \r\n \r\n3,180,417 \r\n \r\n2,911,949 \r\n \r\nBusiness Administration \r\n \r\n966,269 \r\n \r\n672,509 \r\n \r\nMaintenance and Operation of Plant \r\n \r\n5,290,090 \r\n \r\n4,876,118 \r\n \r\nStudent Transportation Services \r\n \r\n2,638,705 \r\n \r\n2,943,972 \r\n \r\nCentral Support Services \r\n \r\n190,010 \r\n \r\n34,926 \r\n \r\nOther Support Services \r\n \r\n218,947 \r\n \r\n325,963 \r\n \r\nOperations of Non-Instructional Services: \r\n \r\nEnterprise Operations \r\n \r\n1,885,042 \r\n \r\n2,102,752 \r\n \r\nFood Services \r\n \r\n4,389,436 \r\n \r\n3,933,826 \r\n \r\nInterest on Short-Term and Long-Term Debt \r\n \r\n596,649 \r\n \r\n532,858 \r\n \r\n13,719,367 $ \r\n988,564 276,735 -239,904 -859,146 1,120,852 966,269 3,028,165 1,738,056 190,010 \r\n-2,486 \r\n-15,545 -221,382 596,649 \r\n \r\n12,897,991 \r\n972,417 384,145 \r\n25,437 -296,460 981,437 672,509 2,612,022 1,860,469 \r\n34,926 2,379 \r\n326,432 -175,507 532,858 \r\n \r\nTotal Expenses \r\n \r\n$ 69,796,445 $ 67,051,711 $ 21,286,204 $ \r\n \r\n20,831,055 \r\n \r\n(1) Fiscal year 2014 balances do not reflect the effects of the restatement of Net Position. See Note 2 in the Notes to the Basic Financial Statements for additional information. \r\n \r\nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT'S FUNDS \r\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 and other financing sources of $90.7 million and total expenditures and other financing uses of $78.0 million in fiscal year 2015. Total governmental fund balances of approximately $23.7 million at June 30, 2015, increased approximately $12.7 million from the prior year. \r\n \r\nvii \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 \r\n \r\nGeneral Fund Budget Highlights \r\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. \r\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. \r\nFor the General Fund, the final actual revenues of $69.0 million were greater than the final budgeted amount of $59.4 million by approximately $9.6 million. This can be attributed to receiving more Property Taxes, Federal Funds, Charges for Services, and miscellaneous income than originally expected. \r\nThe General Fund's final actual expenditures of $66.1 million were greater than the final budget amount of $64.7 million by approximately $1.4 million. The District believes it effectively managed its budget during the fiscal year. \r\nCAPITAL ASSETS AND DEBT ADMINISTRATION \r\nCapital Assets \r\nAt fiscal year ended June 30, 2015, the School District had over $77.8 million invested in capital assets, net of accumulated depreciation, all in governmental activities. These assets are made up of a broad range of items including buildings; land; land improvements; and food service, transportation and maintenance equipment. Table 4 reflects a summary of these balances, net of accumulated depreciation, as compared to the prior fiscal year. \r\nTable 4 Capital Assets (Net of Depreciation) \r\nGovernmental Activities \r\n \r\nFiscal Year 2015 \r\n \r\nFiscal Year 2014 (1) \r\n \r\nLand Construction In Progress Building and Improvements Equipment Land Improvements \r\n \r\n$ 2,275,175 1,124,641 \r\n71,884,506 1,109,026 1,438,952 \r\n \r\n$ 2,288,639 287,120 \r\n73,108,597 1,325,898 1,419,615 \r\n \r\nTotal \r\n \r\n$ 77,832,300 $ 78,429,869 \r\n \r\n(1) Fiscal year 2014 balances do not reflect the effects of the restatement of Net Position. See Note 2 in the Notes to the Basic Financial Statements for additional information. \r\n \r\nAdditional information about the School District's Capital Assets can be found in the Notes to the Basic Financial Statements. \r\n \r\nviii \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 \r\n \r\nDebt At June 30, 2015, the Board had $19.2 million in bonds outstanding with $4.9 million due within one year. \r\nTable 5 General Obligation Debt \r\n \r\nFiscal Year 2015 \r\n \r\nFiscal Year 2014 \r\n \r\nGeneral Obligation Debt \r\n \r\n$ 19,161,897 $ 11,148,442 \r\n \r\nLong-Term Liabilities \r\nAt June 30, 2015 the School District reported liabilities for its proportionate share of the net pension liability that reflected a reduction for support provided to the School District by the State of Georgia for certain public school support personnel, as well as a net pension liability related to the Polk County School's Employer Sponsored Pension Plan for certain public school support personnel. Reporting these liabilities was required by GASB 68 and GASB 71. \r\n \r\nFACTORS BEARING ON THE DISTRICT'S FUTURE \r\nCurrently known circumstances that are expected to have a significant effect on financial position or results of operations in future years are as follows: \r\n The District is financially stable. The School District's operating millage for fiscal year 2015 was 16.274, which produced approximately $927,207.20 per mill. \r\n The District is in excellent financial condition. The General Fund had a fund balance as of June 30, 2015 of $9.9 million which is up almost $2.5 million from prior year. \r\n The School District is financially challenged by the State's continuing reduction of state revenue appropriations to local school districts. However, the System is scheduled to receive $1.8 million in increased state revenue for fiscal 2016. \r\n The School District student population is fairly static. The District will continue to renovate the existing facilities to accommodate the growth and reduce portable classrooms at various schools as needed. The District plans to fund additional capital outlays with the one percent local sales tax revenue, general obligation bonds and state capital outlay grants. Polk County College and Career Academy will be constructed on the existing Cedartown High School and Rockmart High School Campuses. An Athletic Facility will be constructed at Rockmart High School. Renovations will be made at Eastside. Technology upgrades will also be made. \r\n In fiscal year 2015, the Board adopted Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions and Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date  an amendment of GASB No. 68. Implementation of this statement required the system to record a charge (decrease) to the District-wide Net Position at July 1, 2014 for the system's share of the Net Pension Liability for the pension plans administered through the Teachers' Retirement System of Georgia (TRS), Employees' Retirement System of Georgia (ERS) and the Polk County School's Employer Sponsored Pension Plan. Readers should understand implementation of (GASB) Statements 68 and 71 will not affect the system's Governmental Activities Fund Statements. \r\n \r\nix \r\n \r\n POLK COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED 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 Mrs. Tammy McDonald, Chief Financial Officer, Polk County School District, 612 South College Street, Cedartown, Georgia 30125. You may also email your questions to Mrs. McDonald at tammy@polk.k12.ga.us. \r\nx \r\n \r\n POLK COUNTY SCHOOL DISTRICT \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT STATEMENT OF NET POSITION JUNE 30, 2015 \r\nASSETS \r\nCash and Cash Equivalents Investments Accounts Receivable, Net \r\nTaxes State Government Federal Government Local Other Inventories Capital Assets, Non-Depreciable Capital Assets, Depreciable (Net of Accumulated Depreciation) \r\nTotal Assets \r\nDEFERRED OUTFLOWS OF RESOURCES \r\nRelated to Defined Benefit Pension Plans \r\nLIABILITIES \r\nAccounts Payable Salaries and Benefits Payable Interest Payable Contracts Payable Retainages Payable Long-Term Liabilities \r\nDue Within One Year Due in More Than One Year Net Pension Liability \r\nTotal Liabilities \r\nDEFERRED INFLOWS OF RESOURCES \r\nRelated to Defined Benefit Pension Plans \r\nNET POSITION \r\nNet Investment in Capital Assets Restricted for \r\nContinuation of Federal Programs Debt Service Continuation of State Programs Unrestricted (Deficit) \r\nTotal Net Position \r\n \r\nEXHIBIT \"A\" \r\n \r\nGOVERNMENTAL ACTIVITIES \r\n \r\n$ \r\n \r\n11,216,002.70 \r\n \r\n13,474,809.49 \r\n \r\n1,975,222.58 5,279,476.23 \r\n866,011.83 7,353.39 \r\n38,060.24 135,030.53 3,399,815.71 74,432,483.39 \r\n \r\n110,824,266.09 \r\n \r\n5,626,475.46 \r\n \r\n224,645.27 7,798,119.02 \r\n125,825.00 385,998.79 \r\n49,721.34 \r\n5,584,480.62 16,421,445.90 47,265,182.00 \r\n77,855,417.94 \r\n \r\n17,422,809.00 \r\n \r\n69,614,797.42 \r\n756,519.78 3,764,706.01 \r\n47,608.54 -53,011,117.14 \r\n \r\n$ \r\n \r\n21,172,514.61 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 1 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT STATEMENT OF ACTIVITIES \r\nFOR THE YEAR ENDED JUNE 30, 2015 \r\n \r\nGOVERNMENTAL ACTIVITIES \r\nInstruction Support Services \r\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 \r\nTotal Governmental Activities \r\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 \r\nTotal General Revenues \r\nChange in Net Position \r\nNet Position - Beginning of Year, Restated \r\nNet Position - End of Year \r\n \r\nEXPENSES \r\n \r\nCHARGES FOR SERVICES \r\n \r\n$ \r\n \r\n46,039,166.72 $ \r\n \r\n1,373,486.10 1,667,813.91 \r\n868,186.08 492,226.89 3,180,416.87 966,268.58 5,290,089.77 2,638,705.20 190,009.96 218,947.06 \r\n \r\n1,885,041.54 4,389,436.09 \r\n596,648.73 \r\n \r\n$ \r\n \r\n69,796,443.50 $ \r\n \r\n46,868.11 \r\n1,900,586.50 74,007.88 \r\n2,021,462.49 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 2 - \r\n \r\n EXHIBIT \"B\" \r\n \r\nPROGRAM REVENUES OPERATING GRANTS AND \r\nCONTRIBUTIONS \r\n \r\nCAPITAL GRANTS AND CONTRIBUTIONS \r\n \r\nNET (EXPENSES) REVENUES \r\nAND CHANGES IN NET POSITION \r\n \r\n$ \r\n \r\n32,162,931.41 $ \r\n \r\n384,921.75 1,391,078.56 1,108,090.00 1,351,372.89 2,059,565.00 \r\n \r\n2,261,925.16 900,648.72 \r\n \r\n221,433.39 \r\n \r\n4,536,810.43 \r\n \r\n$ \r\n \r\n46,378,777.31 $ \r\n \r\n110,000.00 $ 110,000.00 \r\n \r\n-13,719,367.20 \r\n-988,564.35 -276,735.35 239,903.92 859,146.00 -1,120,851.87 -966,268.58 -3,028,164.61 -1,738,056.48 -190,009.96 \r\n2,486.33 \r\n15,544.96 221,382.22 -596,648.73 \r\n-21,286,203.70 \r\n \r\n14,757,207.24 45,476.29 \r\n4,569,998.64 138,023.83 \r\n4,473,310.00 80,159.28 \r\n809,316.42 \r\n24,873,491.70 \r\n3,587,288.00 \r\n17,585,226.61 \r\n \r\n$ \r\n \r\n21,172,514.61 \r\n \r\n- 3 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT BALANCE SHEET \r\nGOVERNMENTAL FUNDS JUNE 30, 2015 \r\n \r\nEXHIBIT \"C\" \r\n \r\nASSETS \r\nCash and Cash Equivalents Investments Accounts Receivable, Net \r\nTaxes State Government Federal Government Local Other Inventories \r\n \r\nGENERAL FUND \r\n \r\nDISTRICT-WIDE CAPITAL PROJECTS FUND \r\n \r\nDEBT SERVICE \r\nFUND \r\n \r\nTOTAL \r\n \r\n$ 10,947,758.97 $ 10,421.79 \r\n1,609,394.12 5,169,476.23 \r\n866,011.83 7,353.39 \r\n38,060.24 135,030.53 \r\n \r\n266,497.26 $ 9,941,431.62 \r\n110,000.00 \r\n \r\n1,746.47 $ 3,522,956.08 \r\n365,828.46 \r\n \r\n11,216,002.70 13,474,809.49 \r\n1,975,222.58 5,279,476.23 \r\n866,011.83 7,353.39 \r\n38,060.24 135,030.53 \r\n \r\nTotal Assets \r\nLIABILITIES \r\nAccounts Payable Salaries and Benefits Payable Contracts Payable Retainages Payable \r\nTotal Liabilities \r\nDEFERRED INFLOWS OF RESOURCES \r\nUnavailable Revenue - Property Taxes \r\nFUND BALANCES \r\nNonspendable Restricted Assigned Unassigned \r\nTotal Fund Balances \r\n \r\n$ 18,783,507.10 $ 10,317,928.88 $ \r\n \r\n3,890,531.01 $ \r\n \r\n32,991,966.99 \r\n \r\n$ \r\n \r\n224,459.94 $ \r\n \r\n7,798,119.02 \r\n \r\n8,022,578.96 \r\n \r\n185.33 \r\n385,998.79 49,721.34 \r\n435,905.46 \r\n \r\n832,779.02 \r\n \r\n$ \r\n \r\n224,645.27 \r\n \r\n7,798,119.02 \r\n \r\n385,998.79 \r\n \r\n49,721.34 \r\n \r\n8,458,484.42 \r\n \r\n832,779.02 \r\n \r\n135,030.53 669,097.79 3,455,403.71 5,668,617.09 \r\n9,928,149.12 \r\n \r\n9,882,023.42 $ \r\n \r\n3,890,531.01 \r\n \r\n9,882,023.42 \r\n \r\n3,890,531.01 \r\n \r\n135,030.53 14,441,652.22 \r\n3,455,403.71 5,668,617.09 \r\n23,700,703.55 \r\n \r\nTotal Liabilities, Deferred Inflows of Resources, and Fund Balances $ 18,783,507.10 $ 10,317,928.88 $ \r\n \r\n3,890,531.01 $ \r\n \r\n32,991,966.99 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 4 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \r\nTO THE STATEMENT OF NET POSITION JUNE 30, 2015 \r\n \r\nEXHIBIT \"D\" \r\n \r\nTotal Fund Balances - Governmental Funds (Exhibit \"C\") \r\nAmounts reported for Governmental Activities in the Statement of Net Position are different because: \r\nCapital Assets used in Governmental Activities are not financial resources and therefore are not reported as assets in governmental funds. These assets consist of: \r\nLand Construction in Progress Land Improvements Buildings and Improvements Equipment Accumulated Depreciation \r\nTotal Capital Assets \r\nSome liabilities, including net pension obligations, are not due and payable in the current period and, therefore, are not reported in the funds. \r\nNet Pension Liability \r\nDeferred Outflows and Inflows of Resources related to pensions are applicable to future periods and, therefore, are not reported in the governmental funds. \r\nTaxes that are not available to pay for current period expenditures are deferred in the governmental funds. \r\nProperty Taxes \r\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: \r\nBonds Payable Accrued Interest Payable Capital Leases Payable Compensated Absences Payable Bond Premiums, Net of Amortization \r\nTotal Long-Term Liabilities \r\n \r\n$ 23,700,703.55 \r\n \r\n$ 2,275,174.50 1,124,641.21 2,594,719.05 \r\n92,659,271.09 4,617,104.70 \r\n-25,438,611.45 \r\n \r\n77,832,299.10 \r\n \r\n-47,265,182.00 -11,796,333.54 \r\n \r\n832,779.02 \r\n \r\n$ -19,161,897.23 -125,825.00 \r\n-1,333,142.64 -130,378.51 \r\n-1,380,508.14 \r\n \r\n-22,131,751.52 \r\n \r\nNet Position of Governmental Activities (Exhibit \"A\") \r\n \r\n$ 21,172,514.61 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 5 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES \r\nGOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2015 \r\n \r\nEXHIBIT \"E\" \r\n \r\nREVENUES \r\nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous \r\nTotal Revenues \r\nEXPENDITURES \r\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 \r\nCapital Outlay Debt Services \r\nPrincipal Dues and Fees Interest \r\nTotal Expenditures \r\nExcess of Revenues over (under) Expenditures \r\nOTHER FINANCING SOURCES (USES) \r\nProceeds of Bonds Premiums on Bonds Sold Capital Leases Transfers In Transfers Out \r\nTotal Other Financing Sources (Uses) \r\nNet Change in Fund Balances \r\nFund Balances - Beginning \r\n \r\nGENERAL FUND \r\n \r\nDISTRICT-WIDE CAPITAL PROJECTS FUND \r\n \r\nDEBT SERVICE \r\nFUND \r\n \r\nTOTAL \r\n \r\n$ \r\n \r\n15,089,369.96 \r\n \r\n138,023.83 \r\n \r\n41,968,074.18 $ \r\n \r\n8,969,109.45 \r\n \r\n2,021,462.49 \r\n \r\n4,945.11 \r\n \r\n793,545.15 \r\n \r\n68,984,530.17 \r\n \r\n$ 110,000.00 \r\n15,135.53 15,771.27 140,906.80 \r\n \r\n$ 4,569,998.64 \r\n60,078.64 \r\n \r\n15,089,369.96 4,708,022.47 \r\n42,078,074.18 8,969,109.45 2,021,462.49 80,159.28 809,316.42 \r\n \r\n4,630,077.28 \r\n \r\n73,755,514.25 \r\n \r\n43,431,140.47 \r\n1,429,743.69 1,701,977.56 \r\n913,101.66 822,777.87 3,316,406.77 753,551.90 4,819,726.00 2,256,123.04 190,009.96 220,659.43 1,885,041.54 4,401,466.58 \r\n66,141,726.47 \r\n2,842,803.70 \r\n \r\n2,350,561.34 \r\n5,690.00 235,659.51 593,512.85 \r\n23,114.15 \r\n1,791,267.99 503,365.83 750.00 4,557.78 \r\n5,508,479.45 -5,367,572.65 \r\n \r\n3,175.00 \r\n4,855,000.00 327,145.00 \r\n5,185,320.00 -555,242.72 \r\n \r\n45,781,701.81 \r\n1,429,743.69 1,701,977.56 \r\n913,101.66 825,952.87 3,322,096.77 989,211.41 5,413,238.85 2,279,237.19 190,009.96 220,659.43 1,885,041.54 4,401,466.58 1,791,267.99 \r\n5,358,365.83 750.00 \r\n331,702.78 \r\n76,835,525.92 \r\n-3,080,011.67 \r\n \r\n-317,463.97 -317,463.97 2,525,339.73 7,402,809.39 \r\n \r\n12,500,000.00 1,610,592.85 1,666,200.75 317,463.97 -844,661.50 \r\n15,249,596.07 \r\n9,882,023.42 \r\n0.00 \r\n \r\n844,661.50 \r\n844,661.50 289,418.78 3,601,112.23 \r\n \r\n12,500,000.00 1,610,592.85 1,666,200.75 1,162,125.47 -1,162,125.47 \r\n15,776,793.60 \r\n12,696,781.93 \r\n11,003,921.62 \r\n \r\nFund Balances - Ending \r\n \r\n$ \r\n \r\n9,928,149.12 $ \r\n \r\n9,882,023.42 $ \r\n \r\n3,890,531.01 $ 23,700,703.55 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 6 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF \r\nREVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2015 \r\n \r\nEXHIBIT \"F\" \r\n \r\nTotal Net Change in Fund Balances - Governmental Funds (Exhibit \"E\") \r\nAmounts reported for Governmental Activities in the Statement of Activities are different because: \r\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: \r\nCapital Outlay Depreciation Expense \r\nExcess of Capital Outlay over Depreciation Expense \r\nThe net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, donations, and disposals) is decrease net position. \r\nTaxes reported in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. \r\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: \r\nGeneral Obligation Bonds Issued, Including a Premium of $1,610,592.85 \r\nSome of the Capital Assets acquired this year were financed with capital leases. In Governmental Funds, a capital lease arrangement is considered a source of financing, but in the Statement of Net Position, the lease obligation is reported as a Long-Term Liability. \r\nRepayment of Long-Term Debt is reported as an expenditure in Governmental Funds, but the repayment reduces Long-Term Liabilities in the Statement of Net Position. In the current year, these amounts consist of: \r\nBond Principal Retirements Accreted Interest on Capital Appreciation Bonds Capital Lease Payments \r\nTotal Long-Term Debt Repayments \r\nSome items reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in Governmental Funds. These activities consist of: \r\nAccrued Interest on Issuance of Bonds Compensated Absences Pension Expense Amortization of Bond Premium \r\nTotal Additional Expenditures \r\n \r\n$ 12,696,781.93 \r\n \r\n$ 1,830,124.21 -2,187,415.06 \r\n \r\n-357,290.85 -226,815.23 -286,686.43 \r\n \r\n-14,110,592.85 -1,666,200.75 \r\n \r\n$ 4,855,000.00 -368,455.66 503,365.83 \r\n \r\n4,989,910.17 \r\n \r\n$ -125,825.00 26,116.84 \r\n2,417,805.46 230,084.71 \r\n \r\n2,548,182.01 \r\n \r\nChange in Net Position of Governmental Activities (Exhibit \"B\") \r\n \r\n$ 3,587,288.00 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 7 - \r\n \r\n ASSETS Cash and Cash Equivalents Investments Employer Contributions Receivable \r\nTotal Assets \r\nLIABILITIES Funds Held for Others Due to Broker \r\nNET POSITION Employees' Pension Benefits Held in Trust for Private Purposes \r\n \r\nPOLK COUNTY SCHOOL DISTRICT STATEMENT OF FIDUCIARY NET POSITION \r\nFIDUCIARY FUNDS JUNE 30, 2015 \r\n \r\nEXHIBIT \"G\" \r\n \r\nPRIVATE PURPOSE TRUSTS \r\n \r\nAGENCY FUNDS \r\n \r\nPENSION TRUST FUND \r\n \r\n$ \r\n \r\n10,019.52 $ \r\n \r\n86,579.98 $ \r\n \r\n74,371.60 \r\n \r\n60.00 3,178,305.49 \r\n \r\n310,889.00 \r\n \r\n$ \r\n \r\n10,019.52 $ \r\n \r\n86,639.98 $ 3,563,566.09 \r\n \r\n$ \r\n \r\n86,639.98 \r\n \r\n$ \r\n \r\n4,493.40 \r\n \r\n$ \r\n \r\n10,019.52 \r\n \r\n$ 3,559,072.69 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 8 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT STATEMENT OF CHANGES IN FIDUCIARY NET POSITION \r\nFIDUCIARY FUNDS YEAR ENDED JUNE 30, 2015 \r\n \r\nEXHIBIT \"H\" \r\n \r\nADDITIONS Contributions Employer Contributions Investment Earnings Net Increase (Decrease) in Fair Value of Investments Interest Total Investment Earnings Total Additions \r\nDEDUCTIONS Administrative Expenses Benefits Paid to Participants Total Deductions Change in Net Position \r\nNet Position - Beginning \r\nNet Position - Ending \r\n \r\nPRIVATE PURPOSE TRUSTS \r\n \r\nPENSION TRUST FUND \r\n \r\n$ 310,889.00 \r\n-148,782.24 293,505.44 144,723.20 455,612.20 \r\n \r\n$ \r\n \r\n395.99 \r\n \r\n395.99 \r\n \r\n-395.99 \r\n \r\n10,415.51 \r\n \r\n25,205.39 245,710.25 270,915.64 184,696.56 3,374,376.13 \r\n \r\n$ 10,019.52 $ 3,559,072.69 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 9 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY \r\nREPORTING ENTITY \r\nThe Polk County School District (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. \r\n \r\nNOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES \r\nBASIS OF PRESENTATION \r\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 Polk County School District. \r\nDistrict-wide Statements: \r\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. \r\nThe Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities. \r\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. \r\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. \r\nFund Financial Statements: \r\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. \r\nThe School District reports the following major governmental funds: \r\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. \r\n District-wide Capital Projects Fund accounts for and reports financial resources including Bond Proceeds that are restricted, committed or assigned to the expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets. \r\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. \r\n \r\n- 10 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"I\" \r\n \r\nThe School District reports the following fiduciary fund types: \r\n Private Purpose Trust fund reports trust arrangements under which income is to be used for the purpose of clothing and medical needs for disadvantaged students at the Superintendent's discretion and a scholarship for a student graduating from Rockmart High School. \r\n Agency funds account for assets held by the School District as an agent for various funds, governments or individuals. \r\n Pension Trust Fund accounts for the activities of Polk County School District Social Security Replacement Plan, a single employer defined benefit pension plan for the group of employees covered by the Public School Employees Retirement System (PSERS). \r\nBASIS OF ACCOUNTING \r\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. \r\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. \r\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 and compensated absences, 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. \r\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, 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. \r\n \r\n- 11 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"I\" \r\n \r\nRESTATEMENT OF PRIOR YEAR NET POSITION \r\nFor fiscal year 2015, the School District made several prior period adjustments due to 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 $61,304,613.00. This change is in accordance with generally accepted accounting principles. \r\nAlso for fiscal year 2015, the School District made a prior period adjustment due to errors in reporting Capital Assets and Compensated Absences that resulted in a decrease in Net Position at July 1, 2014 of $169,960.05. This change is in accordance with generally accepted accounting principles. \r\n \r\nNet Position, July 1, 2014, as previously reported \r\n \r\n$ 79,059,799.66 \r\n \r\nPrior Period adjustment - Implementation of GASB 68: Net Pension Liability (measurement date) TRS - June 30, 2014 ERS - June 30, 2014 SSRP - December 31, 2013 Deferred Outflows - School District's contribution made \r\nduring fiscal year 2014 TRS ERS \r\nCapital Assets Compensated Absences \r\n \r\n$ -62,485,271.00 -158,342.00 \r\n-3,015,355.00 \r\n$ 4,340,251.00 14,104.00 \r\n \r\n-65,658,968.00 \r\n4,354,355.00 -13,464.70 \r\n-156,495.35 \r\n \r\nNet Position, July 1, 2014, as restated \r\n \r\n$ 17,585,226.61 \r\n \r\nNEW ACCOUNTING PRONOUNCEMENTS \r\nIn fiscal year 2015, the School District (via the Polk County School District Social Security Replacement Plan) adopted Governmental Accounting Standards Board (GASB) Statement No. 67, Financial Reporting for Pension Plans - an amendment of GASB Statement No. 25. This statement establishes new financial reporting standards for state and local governmental pension plans that are administered through a trust or similar arrangement. This statement resulted in changes to the actuarial calculation of total and net pension liability and the related note disclosures and required supplementary information. The adoption of this statement did not impact the recorded amounts in the financial statements. \r\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 Position for the cumulative effect of this accounting change. \r\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. \r\n \r\n- 12 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"I\" \r\n \r\nIn fiscal year 2015, the School District adopted Governmental Accounting Standards Board (GASB) Statement. No. 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. \r\nFISCAL YEAR ENDS \r\nAll funds are reported using fiscal years which end on June 30, except the defined benefit pension plan (fiduciary fund), which has a fiscal year ending December 31. \r\nCASH AND CASH EQUIVALENTS \r\nComposition of Deposits \r\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. \r\nINVESTMENTS \r\nComposition of Investments \r\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 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: \r\n1. Obligations issued by the State of Georgia or by other states, \r\n2. Obligations issued by the United States government, \r\n3. Obligations fully insured or guaranteed by the United States government or a United States government agency, \r\n4. Obligations of any corporation of the United States government, \r\n5. Prime banker's acceptances, \r\n6. The local government investment pool (Georgia Fund 1) administered by the State of Georgia, Office of the State Treasurer, \r\n7. Repurchase agreements, and \r\n8. Obligations of other political subdivisions of the State of Georgia. \r\nThe School District does not have a formal policy regarding investment policies that address custodial credit risks, concentration of credit risks, or interest rate risks. \r\n \r\n- 13 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"I\" \r\n \r\nRECEIVABLES \r\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. \r\n \r\nPROPERTY TAXES \r\nThe Polk County Board of Commissioners adopted the property tax levy for the 2014 tax digest year (calendar year) on July 31, 2014 (levy date) based on property values as of January 1, 2014. Taxes were due on December 1, 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 Polk 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 $14,046,524.03. \r\nThe tax millage rate levied for the 2014 tax year (calendar year) for the Polk County School District was as follows (a mill equals $1 per thousand dollars of assessed value): \r\n \r\nSchool Operations \r\n \r\n16.274 mills \r\n \r\nAdditionally, Title Ad Valorem Tax revenues, at the fund reporting level, amounted to $997,369.64 during fiscal year ended June 30, 2015. \r\n \r\nSALES TAXES \r\nEducation Special Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $4,569,998.64 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. \r\n \r\nINVENTORIES \r\nFood Inventories \r\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. \r\n \r\n- 14 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"I\" \r\n \r\nCAPITAL ASSETS \r\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. \r\nCapitalization thresholds and estimated useful lives of capital assets reported in the District-wide statements are as follows: \r\n \r\nCapitalization Policy \r\n \r\nEstimated Useful Life \r\n \r\nLand \r\n \r\n$ \r\n \r\nLand Improvements \r\n \r\n$ \r\n \r\nBuildings and Improvements $ \r\n \r\nEquipment \r\n \r\n$ \r\n \r\nIntangible Assets \r\n \r\n$ \r\n \r\nAll 50,000.00 50,000.00 50,000.00 50,000.00 \r\n \r\nN/A 20 to 60 years 25 to 60 years \r\n5 to 50 years 10 to 20 years \r\n \r\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. \r\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. \r\nDEFERRED OUTFLOWS/INFLOWS OF RESOURCES \r\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 defined benefit pension plans, as discussed in Note 14  Retirement Plans. \r\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 defined benefit pension plans, as discussed in Note 14  Retirement Plans. This item is reported only in the District-wide Statement of Net Position. Additionally, the School District has 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. \r\n \r\n- 15 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"I\" \r\n \r\nCOMPENSATED ABSENCES \r\nMembers of the Teachers' Retirement System of Georgia (TRS) may apply unused sick leave toward early retirement. The liability for early retirement will be borne by TRS rather than by the individual school districts. Otherwise, sick leave does not vest with the employee, and no liability is reported in the School District's financial statements. \r\nVacation leave of 10 days is awarded annually to all full time personnel employed on a twelve month basis with less than 15 years of experience and 15 days annually to all full time personnel employed on a twelve month basis with between 15 and 40 years of experience. Twelve month employees with 40 or more years of service to the school system are eligible for 5 additional vacation days annually. No other employees are eligible to earn vacation leave. \r\nFor twelve-month employees with 15 or more years of experience, all unused vacation days may be carried forward into the next employment year up to and including June 30. This is a maximum of 15 days earned from previous year. Upon expiration of this limit, a maximum of 5 unused vacation days may be carried forward. Therefore, this employee could have a maximum of 20 days of acquired vacation at the start of a new fiscal year. \r\nFor twelve-month employees with less than 15 years of experience, all unused vacation days may be carried forward into the next employment year up to and including June 30. This is a maximum of 10 days earned from previous year. Upon expiration of this limit, a maximum of 5 unused vacation days may be carried forward. Therefore, this employee could have a maximum of 15 days of acquired vacation at the start of a new fiscal year. \r\nGENERAL OBLIGATION BONDS \r\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. \r\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. \r\nPENSIONS \r\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), the Employees' Retirement System of Georgia (ERS), the Public School Employees Retirement System (PSERS) and the Polk County School District Social Security Replacement Plan (SSRP) and additions to/deductions from TRS/ERS/PSERS/SSRP's Fiduciary Net Position have been determined on the same basis as they are reported by TRS/ERS/PSERS/SSRP. 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 14 - Retirement Plans. \r\n \r\n- 16 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNET POSITION \r\nThe School District's Net Position in the District-wide Statements is classified as follows: \r\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. \r\nRestricted Net Position - This represents resources for which the School District is legally or contractually obligated to spend resources for continuation of Federal Programs and debt service in accordance with restrictions imposed by external third parties. \r\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 $47,265,182.00 which is required for financial reporting. \r\nFUND BALANCES \r\nThe School District's fund balances are classified as follows: \r\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. \r\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. \r\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. \r\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. \r\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. \r\n \r\n- 17 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"I\" \r\n \r\nFund Balances of the Governmental Funds at June 30, 2015, are as follows: \r\n \r\nNonspendable Inventories \r\nRestricted Continuation of Federal Programs Capital Projects Debt Service Continuation of State Programs \r\nAssigned School Activity Accounts Subsequent Period Expenditures \r\nUnassigned \r\n \r\n$ \r\n \r\n135,030.53 \r\n \r\n$ \r\n \r\n621,489.25 \r\n \r\n9,882,023.42 \r\n \r\n3,890,531.01 \r\n \r\n47,608.54 \r\n \r\n14,441,652.22 \r\n \r\n598,986.42 2,856,417.29 \r\n \r\n3,455,403.71 5,668,617.09 \r\n \r\nFund Balance, June 30, 2015 \r\n \r\n$ 23,700,703.55 \r\n \r\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. \r\nUSE OF ESTIMATES \r\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. \r\nNOTE 3: BUDGETARY DATA \r\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 (principle) 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. \r\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. \r\nSee Schedule 9  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 under review. \r\n \r\n- 18 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 4: DEPOSITS AND INVESTMENTS \r\n \r\nCOLLATERALIZATION OF DEPOSITS \r\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. \r\n \r\nAcceptable security for deposits consists of any one of or any combination of the following: \r\n \r\n1. Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, \r\n \r\n2. Insurance on accounts provided by the Federal Deposit Insurance Corporation, \r\n \r\n3. Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia, \r\n \r\n4. Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, \r\n \r\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, \r\n \r\n6. Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and \r\n \r\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. \r\n \r\nCATEGORIZATION OF DEPOSITS \r\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, the School District had deposits with a carrying amount of $11,397,455.59, which includes $10,481.79 in Certificates of Deposit that are reported as Investments, and a bank balance of $13,191,649.87. The bank balances insured by Federal depository insurance were $1,001,935.42, and the bank balances collateralized with securities held by the pledging institution or by the pledging financial institution's trust department or agent in the School District's name were $309,302.39. \r\n \r\nThe amounts exposed to custodial credit risk are classified into three categories as follows: \r\n \r\nCategory 1 Category 2 - \r\nCategory 3 - \r\n \r\nUncollateralized, Cash collateralized with securities held by the pledging financial institution, or Cash collateralized with securities held by the pledging financial institution's trust department or agent but not in the School District's name. \r\n \r\n- 19 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"I\" \r\n \r\nThe School District's deposits by custodial risk category at June 30, 2015, are as follows: \r\n \r\nCustodial Credit Risk Category \r\n \r\nBank Balance \r\n \r\n1 \r\n \r\n$ \r\n \r\n0.00 \r\n \r\n2 \r\n \r\n0.00 \r\n \r\n3 \r\n \r\n11,880,412.06 \r\n \r\nTotal \r\n \r\n$ 11,880,412.06 \r\n \r\nCATEGORIZATION OF INVESTMENTS \r\nAt June 30, 2015, the carrying value of the School District's total investment was $16,653,174.98. This includes $10,481.79 invested in Certificates of Deposit, which are collateralized in the same manner as other cash deposits. The School District's remaining investments as of June 30, 2015, are presented below. All investments are presented by investment type and debt securities are presented by maturity. \r\n \r\nInvestment Type \r\n \r\nFair Value \r\n \r\nInvestment Maturity Less Than 1 Year \r\n \r\nDebt Securities U. S. Agencies Implicitly Guaranteed \r\n \r\n$ 1,533,616.50 $ 1,533,616.50 \r\n \r\nOther Investments Bond Mutual Funds Equity Mutual Funds \r\n \r\n1,363,224.59 1,815,080.90 \r\n \r\nInvestment Pools Office of the State Treasurer Georgia Fund 1 \r\n \r\n11,930,771.20 \r\n \r\nTotal Investments \r\n \r\n$ 16,642,693.19 \r\n \r\nThe Georgia Fund 1 (local government investment pool) 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 (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. \r\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. \r\n- 20 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"I\" \r\n \r\nInterest Rate Risk \r\nInterest rate risk is the risk that changes in interest rates of debt investment will adversely affect the fair value of an investment. The School District does not have a formal policy for managing interest rate risk. \r\n \r\nCustodial Credit Risk \r\nCustodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, the School District will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The School District does not have a formal policy for managing custodial credit risk for investments. \r\n \r\nAt June 30, 2015, $1,533,616.50 of the School District's applicable investments were (1) uninsured and unregistered, with securities held by the counterparty's trust department or agent in the name of the School District and (2) uninsured or unregistered, with securities held by the counterparty, or by its trust department or agent, but not in the School District's name. \r\n \r\nCredit Quality Risk \r\nCredit quality risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The School District does not have a formal policy for managing custodial credit risk. \r\n \r\nThe investments subject to credit quality risk are reflected below: \r\n \r\nRated Debt Investments \r\n \r\nFair Value \r\n \r\nQuality Ratings \r\n \r\nA \r\n \r\nUnrated \r\n \r\nDebt Securities U. S. Agencies Implicitly Guaranteed Mutual Bond Fund \r\n \r\n$ 1,533,616.50 \r\n \r\n$ 1,533,616.50 \r\n \r\n1,363,224.59 $ 1,363,224.59 \r\n \r\nTotals by Quality Ratings \r\n \r\n$ \r\n \r\n2,896,841.09 $ \r\n \r\n1,363,224.59 $ 1,533,616.50 \r\n \r\nConcentration of Credit Risk \r\nConcentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The School District does not have a formal policy for managing concentration of credit risk. More than 5% of the School District's investments are in Mutual Equity Funds, Mutual Bond Funds and Federal National Mortgage Association (FNMA) Discount Note. These investments are 11%, 8% and 9%, respectively, of the School District's total investments. \r\nNOTE 5: NON-MONETARY TRANSACTIONS \r\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. \r\n \r\n- 21 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 6: CAPITAL ASSETS \r\nThe following is a summary of changes in the Capital Assets during the fiscal year: \r\n \r\nRestated Balances July 1, 2014 \r\n \r\nIncreases \r\n \r\nDecreases \r\n \r\nBalances June 30, 2015 \r\n \r\nGovernmental Activities Capital Assets, Not Being Depreciated: \r\nLand Construction in Progress \r\n \r\n$ \r\n \r\n2,275,174.50 \r\n \r\n287,120.00 $ \r\n \r\n1,206,446.21 $ \r\n \r\n$ 368,925.00 \r\n \r\n2,275,174.50 1,124,641.21 \r\n \r\nTotal Capital Assets Not Being Depreciated \r\n \r\n2,562,294.50 \r\n \r\n1,206,446.21 \r\n \r\n368,925.00 \r\n \r\n3,399,815.71 \r\n \r\nCapital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements \r\nLess Accumulated Depreciation for: Buildings and Improvements Equipment Land Improvements \r\n \r\n92,501,852.09 4,894,636.70 2,519,979.05 \r\n19,393,254.83 3,568,738.55 1,100,363.78 \r\n \r\n831,463.00 86,400.00 74,740.00 \r\n1,828,739.77 303,271.97 55,403.32 \r\n \r\n674,044.00 363,932.00 \r\n447,229.37 363,931.40 \r\n \r\n92,659,271.09 4,617,104.70 2,594,719.05 \r\n20,774,765.23 3,508,079.12 1,155,767.10 \r\n \r\nTotal Capital Assets, Being Depreciated, Net \r\n \r\n75,854,110.68 \r\n \r\n-1,194,812.06 \r\n \r\n226,815.23 \r\n \r\n74,432,483.39 \r\n \r\nGovernmental Activity Capital Assets - Net $ 78,416,405.18 $ \r\n \r\n11,634.15 $ \r\n \r\n595,740.23 $ 77,832,299.10 \r\n \r\nCurrent year depreciation expense by function is as follows: \r\n \r\nInstruction Support Services \r\nStudent Transportation Services Other Support Services Food Services \r\n \r\n$ 1,859,945.66 \r\n \r\n$ 292,074.07 8,640.00 \r\n \r\n300,714.07 26,755.33 \r\n \r\n$ 2,187,415.06 \r\n \r\n- 22 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 7: INTERFUND TRANSFERS \r\nInterfund transfers for the year ended June 30, 2015, consisted of the following: \r\n \r\nTransfers to \r\nDistrict-wide Capital Projects Debt Service Fund \r\n \r\nTransfers From \r\n \r\nGeneral \r\n \r\nDistrict-wide \r\n \r\nFund \r\n \r\nCapital Projects \r\n \r\n$ 317,463.97 $ 844,661.50 \r\n \r\nTotal \r\n \r\n$ 317,463.97 $ 844,661.50 \r\n \r\nTransfers are used to move (1) property tax revenues collected by the General Fund to the Districtwide Capital Projects Fund as required match or supplemental funding source for capital construction projects, and (2) bond proceeds collected by the District-wide Capital Projects Fund to the Debt Service Fund to pay bond principal and interest payments. \r\n \r\nNOTE 8: RISK MANAGEMENT \r\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. \r\n \r\nThe School District has obtained commercial insurance for risk of loss associated with torts, assets, errors or omissions, job related illness or injuries to employees, and acts of God. The School District has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the School District's insurance coverage in any of the past three years. \r\n \r\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. \r\n \r\nChanges in the unemployment compensation claims liability during the last two fiscal years are as follows: \r\n \r\nBeginning of Year Liability \r\n \r\nClaims and Changes in Estimates \r\n \r\nClaims Paid \r\n \r\nEnd of Year Liability \r\n \r\n2014 $ 2015 $ \r\n \r\n0.00 $ 0.00 $ \r\n \r\n51,780.00 $ 11,211.00 $ \r\n \r\n51,780.00 $ 11,211.00 $ \r\n \r\n0.00 0.00 \r\n \r\n- 23 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"I\" \r\n \r\nThe School District has purchased a surety bond to provide additional insurance coverage as follows: \r\n \r\nPosition Covered \r\n \r\nAmount \r\n \r\nSuperintendent \r\n \r\n$ \r\n \r\n50,000.00 \r\n \r\nNOTE 9: LONG-TERM LIABILITIES \r\nCAPITAL LEASES \r\nThe Polk County School District entered into various lease agreements for computer 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. \r\n \r\nCOMPENSATED ABSENCES \r\nCompensated absences represent obligations of the School District relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. Typically, the General Fund is the fund used to liquidate this long-term debt. The School District uses the vesting method to compute compensated absences. \r\n \r\nFor fiscal year 2015, the School District began recording the accumulated compensated absences liability at June 30 in the District-wide financial statements. This is a change in accounting principle. \r\n \r\nGENERAL OBLIGATION DEBT OUTSTANDING \r\nGeneral Obligation Bonds currently outstanding are as follows: \r\n \r\nPurpose \r\n \r\nInterest Rates \r\n \r\nAmount \r\n \r\nGeneral Government - QZAB - Series 2006 General Government - Capital Appreciation Bonds - Series 2008 General Government - Series 2014 \r\n \r\n0.00% $ 3.285% - 4.10% \r\n2.00% - 5.00% \r\n \r\n2,000,000.00 4,661,897.23 12,500,000.00 \r\n \r\n$ \r\n \r\n19,161,897.23 \r\n \r\nThe changes in Long-Term Liabilities during the fiscal year ended June 30, 2015, were as follows: \r\n \r\nRestated Balance July 1, 2014 \r\n \r\nGovernmental Activities \r\n \r\nAdditions \r\n \r\nDeductions \r\n \r\nBalance June 30, 2015 \r\n \r\nDue Within One Year \r\n \r\nG.O. Bonds Appreciation Bonds \r\nTotal G.O. Debt \r\n \r\n$ 2,000,000.00 $ 12,500,000.00 \r\n \r\n$ \r\n \r\n9,148,441.57 \r\n \r\n368,455.66 $ 4,855,000.00 \r\n \r\n11,148,441.57 \r\n \r\n12,868,455.66 \r\n \r\n4,855,000.00 \r\n \r\n14,500,000.00 4,661,897.23 $ \r\n19,161,897.23 \r\n \r\n4,855,000.00 4,855,000.00 \r\n \r\nCapital Leases Compensated Absences (1) Bond Premiums Amortized \r\n \r\n170,307.72 156,495.35 \r\n0.00 \r\n \r\n1,666,200.75 30,992.11 \r\n1,610,592.85 \r\n \r\n503,365.83 57,108.95 \r\n230,084.71 \r\n \r\n1,333,142.64 130,378.51 \r\n1,380,508.14 \r\n \r\n499,395.93 230,084.69 \r\n \r\n$ 11,475,244.64 $ 16,176,241.37 $ 5,645,559.49 $ 22,005,926.52 $ 5,584,480.62 \r\n \r\n(1) The portion of Compensated Absences due within one year has been determined to be immaterial to the basic financial statements. \r\n \r\n- 24 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"I\" \r\n \r\nAt June 30, 2015, payments due by fiscal year which includes principal and interest for these items are as follows: \r\n \r\nFiscal Year Ended June 30: \r\n \r\nCapital Leases \r\n \r\nPrincipal \r\n \r\nInterest \r\n \r\n2016 2017 2018 \r\n \r\n$ \r\n \r\n499,395.93 $ \r\n \r\n415,724.29 \r\n \r\n418,022.42 \r\n \r\nTotal Principal and Interest $ 1,333,142.64 $ \r\n \r\n8,527.67 4,610.96 2,312.83 \r\n15,451.46 \r\n \r\nFiscal Year Ended June 30: \r\n \r\nGeneral Obligation Debt \r\n \r\nPrincipal \r\n \r\nInterest \r\n \r\nUnamortized Bond Premium \r\n \r\n2016 2017 2018 2019 2020 2021 - 2023 \r\n \r\n$ 4,855,000.00 $ 2,410,000.00 2,450,000.00 2,490,000.00 2,545,000.00 4,605,000.00 \r\n \r\n503,300.00 $ 503,300.00 455,100.00 357,100.00 257,500.00 130,250.00 \r\n \r\n230,084.69 230,084.69 230,084.69 230,084.69 230,084.69 230,084.69 \r\n \r\nLess Unaccreted Capital Appreciation Bonds \r\n \r\n193,102.77 \r\n \r\nTotals \r\n \r\n$ 19,161,897.23 $ 2,206,550.00 $ \r\n \r\n1,380,508.14 \r\n \r\nNOTE 10: ON-BEHALF PAYMENTS \r\nThe School District has recognized revenues and costs in the amount of $173,641.32 for retirement contributions paid on the School District's behalf by the following State Agencies. \r\nGeorgia Department of Education Paid to the Teachers' Retirement System of Georgia For Teachers' Retirement System (TRS) Employer's Cost In the amount of $46,261.32 \r\nOffice of the State Treasurer Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $127,380.00 \r\nFunds paid on behalf of the School District are reported in governmental funds. See Note 14 Retirement Plans for the State support related to the Net Pension Liability. \r\n \r\n- 25 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 11: SIGNIFICANT COMMITMENTS \r\nThe following is an analysis of significant outstanding construction or renovation contracts executed by the School District as of June 30, 2015: \r\n \r\nProject \r\n \r\nUnearned Executed Contracts \r\n \r\nEastside Elementary Additions Rockmart High School Fieldhouse \r\n \r\n$ 3,066,545.58 4,228,370.02 \r\n \r\n$ 7,294,915.60 \r\n \r\nThe amounts described in this note are not reflected in the basic financial statements. \r\nNOTE 12: SIGNIFICANT CONTINGENT LIABILITIES \r\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. \r\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. \r\n \r\nNOTE 13: POST-EMPLOYMENT BENEFITS \r\nGEORGIA SCHOOL PERSONNEL POST-EMPLOYMENT HEALTH BENEFIT FUND \r\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. \r\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 \r\n- 26 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"I\" \r\n \r\npremiums 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. \r\n \r\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. \r\n \r\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: \r\n \r\nFor certificated teachers, librarians and regional educational service agencies and certain other eligible participants: \r\n \r\nJuly 1, 2014  June 30, 2015 \r\n \r\n$945.00 per member per month \r\n \r\nFor non-certificated school personnel: \r\n \r\nJuly 1, 2014  June 30, 2015 \r\n \r\n$596.20 per member per month \r\n \r\nNo additional contribution was required by the Board for fiscal year 2015 nor contributed to the School OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the School plan for other post-employment benefits and are subject to appropriation. \r\n \r\nThe School District's combined active and retiree contributions to the health insurance plans, which equaled the required contribution, for the current fiscal year and the preceding two fiscal years were as follows: \r\n \r\nFiscal Year \r\n \r\nPercentage Contributed \r\n \r\nRequired Contribution \r\n \r\n2015 2014 2013 \r\n \r\n100% 100% 100% \r\n \r\n$ 6,689,769.90 $ 6,508,004.52 $ 6,355,940.58 \r\n \r\nNOTE 14: RETIREMENT PLANS \r\nPolk County School District participates in various retirement plans administered by the State of Georgia, as further explained below. \r\n \r\nTEACHERS' RETIREMENT SYSTEM OF GEORGIA (TRS) \r\nPlan Description: All teachers of the School 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 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. \r\n \r\n- 27 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\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. \r\nEmployer contributions for the current fiscal year and the preceding two fiscal years are as follows: \r\n \r\nFiscal Year \r\n \r\nPercentage Contributed \r\n \r\nRequired Contribution \r\n \r\n2015 2014 2013 \r\n \r\n100% 100% 100% \r\n \r\n$ 4,854,341.52 $ 4,365,039.77 $ 4,154,316.25 \r\n \r\nEMPLOYEES' RETIREMENT SYSTEM \r\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. \r\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. \r\n \r\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. \r\n \r\n- 28 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\n \r\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 $4,200.00. Under the old plan, the state pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these state contributions are included in the members' accounts for refund purposes and are used in the computation of the members' earnable compensation for the purpose of computing retirement benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation. The School District's contractually required contribution rate, actuarially determined annually, for the year ended June 30, 2015 was 21.96% of annual covered payroll for old and new plan members and 18.87% for GSEPS members. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. \r\n \r\nEmployer contributions for the current fiscal year and the preceding two fiscal years are as follows: \r\n \r\nFiscal Year \r\n \r\nPercentage Contributed \r\n \r\nRequired Contribution \r\n \r\n2015 2014 2013 \r\n \r\n100% 100% 100% \r\n \r\n$ 17,207.88 $ 14,104.00 $ 11,306.36 \r\n \r\nPUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM (PSERS) \r\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. \r\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. \r\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. \r\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. \r\n- 29 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\n \r\nPension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pension \r\n \r\nAt June 30, 2015, the School District reported a liability of $43,895,761.00 for its proportionate share of the Net Pension Liability for TRS ($43,768,503.00) and ERS ($127,258.00). \r\n \r\nThe TRS Net Pension Liability reflected a reduction for support provided to the School District by the State of Georgia for certain public school support personnel. The amount recognized by the School District as its proportionate share of the Net Pension Liability, the related State of Georgia support, and the total portion of the Net Pension Liability that was associated with the School District were as follows: \r\n \r\nSchool District's proportionate share of the Net Pension Liability \r\n \r\n$ 43,768,503.00 \r\n \r\nState of Georgia's proportionate share of the Net Pension Liability associated with the School District \r\n \r\n560,177.00 \r\n \r\nTotal \r\n \r\n$ 44,328,680.00 \r\n \r\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 and ERS during the fiscal year ended June 30, 2014. \r\nAt June 30, 2014, the School District's TRS proportion was 0.346443%, which was a decrease of 0.012155% from its proportion measured as of June 30, 2013. At June 30, 2014, the School District's ERS proportion was 0.003393%, which was an increase of 0.000130% from its proportion measured as of June 30, 2013. \r\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 $443,309.00. \r\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 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. \r\nFor the year ended June 30, 2015, the School District recognized pension expense of $2,607,884.00 for TRS, $10,198.00 for ERS and $38,499.00 for PSERS and revenue of $50,046.00 for TRS and $38,499.00 for PSERS. The revenue is support provided by the State of Georgia. For TRS, the State of Georgia support is provided only for certain support personnel. \r\n \r\n- 30 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"I\" \r\n \r\nAt June 30, 2015, the School District reported deferred outflows of resources and deferred inflows of resources related to pension from the following sources: \r\n \r\nTRS \r\n \r\nDeferred Outflows \r\n \r\nDeferred Inflows \r\n \r\nof Resources \r\n \r\nof Resources \r\n \r\nERS \r\n \r\nDeferred Outflows Deferred Inflows \r\n \r\nof Resources \r\n \r\nof Resources \r\n \r\nNet difference between projected and actual earnings on pension plan investments \r\n \r\nChanges in proportion and differences between School District contributions and proportionate share of contributions \r\n \r\nSchool District contributions subsequent to \r\n \r\nthe measurement date \r\n \r\n$ \r\n \r\n$ 15,258,628.00 \r\n \r\n4,797,913.58 \r\n \r\n1,725,773.00 $ \r\n \r\n$ 3,882.00 17,207.88 \r\n \r\n31,060.00 \r\n \r\nTotal \r\n \r\n$ \r\n \r\n4,797,913.58 $ 16,984,401.00 $ \r\n \r\n21,089.88 $ \r\n \r\n31,060.00 \r\n \r\nPolk County School District contributions subsequent to the measurement date of June 30, 2014 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, 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: \r\n \r\nYear Ended June 30: \r\n \r\nTRS \r\n \r\nERS \r\n \r\n2016 2017 2018 2019 2020 \r\n \r\n$ \r\n \r\n-4,206,877.00 $ \r\n \r\n$ \r\n \r\n-4,206,877.00 $ \r\n \r\n$ \r\n \r\n-4,206,877.00 $ \r\n \r\n$ \r\n \r\n-4,206,881.00 $ \r\n \r\n$ \r\n \r\n-156,889.00 \r\n \r\n-5,339.00 -6,309.00 -7,765.00 -7,765.00 \r\n \r\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: \r\n \r\nTeachers' Retirement System: Inflation Salary increases Investment rate of return \r\n \r\n3.00% 3.75  7.00%, average, including inflation 7.50%, net of pension plan investment expense, including inflation \r\n \r\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. \r\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. \r\n \r\n- 31 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"I\" \r\n \r\nEmployees' Retirement System: Inflation Salary increases Investment rate of return \r\n \r\n3.00% 5.45  9.25%, average, including inflation 7.50%, net of pension plan investment expense, including inflation \r\n \r\nMortality rates were based on the RP-2000 Combined Mortality Table for the periods after service retirement, for dependent beneficiaries, and for deaths in active service, and the RP-2000 Disabled Mortality Table set back eleven years for males for the period after disability retirement. \r\n \r\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. \r\n \r\nPublic School Employees Retirement System: \r\n \r\nInflation \r\n \r\n3.00% \r\n \r\nSalary increases \r\n \r\nN/A \r\n \r\nInvestment rate of return \r\n \r\n7.50%, net of pension plan investment expense, including inflation \r\n \r\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. \r\n \r\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. \r\n \r\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: \r\n \r\nAsset class \r\nFixed income Domestic large stocks Domestic mid stocks Domestic small stocks International developed market stocks International emerging market stocks \r\nTotal \r\n* Rates shown are net of the 3.00% assumed rate of inflation \r\n \r\nTarget allocation \r\n30.00% 39.70% \r\n3.70% 1.60% 18.90% 6.10% \r\n100.00% \r\n \r\nLong-term expected real rate of return* \r\n3.00% 6.50% 10.00% 13.00% 6.50% 11.00% \r\n \r\n- 32 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\nSensitivity of the Polk County 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 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: \r\n \r\nTeachers' Retirement System: \r\nSchool District's proportionate share of the Net Pension Liability \r\n \r\n1% Decrease (6.5%) \r\n \r\nCurrent discount rate (7.50%) \r\n \r\n1% Increase (8.50%) \r\n \r\n$ 80,659,479.00 $ \r\n \r\n43,768,503.00 $ 13,389,551.00 \r\n \r\nEmployees' Retirement System: \r\nSchool District's proportionate share of the Net Pension Liability \r\n \r\n1% Decrease (6.5%) \r\n \r\nCurrent discount rate (7.50%) \r\n \r\n1% Increase (8.50%) \r\n \r\n$ 185,568.00 $ \r\n \r\n127,258.00 $ \r\n \r\n77,623.00 \r\n \r\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 www.ers.ga.gov/formspubs/formspubs. \r\nPOLK COUNTY SCHOOL DISTRICT SOCIAL SECURITY REPLACEMENT PLAN \r\nPlan description: As of January 2004, the Polk County School District established a single employer defined benefit pension plan for the group of employees covered under the Public Service Employees Retirement System (PSERS). Recognizing that PSERS was a limited defined benefit plan that does not meet the requirements of a qualified social security replacement plan, the new plan was established for these employees to meet the requirements of a social security replacement plan. \r\nThe Polk County School District Social Security Replacement Plan (Plan) provides a pension benefit for each participant at retirement, equal to 1.5% of the participant's Average Monthly Compensation multiplied by his Years of Credited Service up to forty (40) Years of Credited Service. Years of service subsequent to July 1, 1991, are counted for purposes of determining a participant's benefit. The funding method and determination of benefits payable are provided in or authorized by various sections of Title 47 of the Official Code of Georgia Annotated (\"O.C.G.A.\"). The Plan does not issue a separate financial report. \r\nThe employee is always 100% vested in his accrued benefit in the Plan. \r\nThe Plan is funded by employer contributions held in trust by Reliance Trust Company. The Actuary for the plan is Swerdlin \u0026 Company. The Actuary determines the plan liabilities and required contributions on an annual basis. \r\n- 33 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"I\" \r\n \r\nAs of January 1, 2015, there were 357 plan participants, consisting of the following: \r\n \r\nJanuary 1, 2015 \r\n \r\nActive Participants \r\n \r\n160 \r\n \r\nVested terminated participants \r\n \r\n84 \r\n \r\nRetirees, beneficiaries and disabled participants \r\n \r\n113 \r\n \r\n357 \r\n \r\nFunding Policy: Employees shall neither be required nor permitted to make contributions to the Plan. The Polk County School District (Employer) shall make the contributions required to fund the cost of the benefits provided to its eligible employees by this Plan. The Employer will make such contributions as necessary to fund the Plan in accordance with all applicable minimum funding standards under Georgia law. \r\n \r\nThe Employer's Annual Required Contribution is the actuarially determined amount necessary to fund the plan benefits. The current year required contribution is $310,889.00. The current contribution rate is 12.1% of annual covered payroll. \r\n \r\nInvestments: The Plan maintains an investment policy which fosters prudent and sound judgment in the management of plan assets to ensure safety of capital consistent with the fiduciary responsibility to the citizens of Georgia and which conforms to the Plan's investment policy. All investments are consistent with the District's policy and applicable Federal and State laws. \r\n \r\nInvestments are reported at fair value. Securities are traded on a national or international exchange and are valued at the last reported sales price. The Plan's investment policy requires diversification of assets in an effort to avoid the risk of large losses and maximize the investment return to the Plan consistent with market and economic risk. \r\n \r\nAs of December 31, 2014, the Plan's investments are: \r\n \r\nAsset Class \r\n \r\nPercent of Plan Assets \r\n \r\nCash and Equivalent Domestic Equities International Equities Fixed Income \r\n \r\n$ \r\n \r\n74,371.60 \r\n \r\n1,655,908.57 \r\n \r\n159,172.33 \r\n \r\n1,363,224.59 \r\n \r\n$ \r\n \r\n3,252,677.09 \r\n \r\nFor the Plan's fiscal year ended December 31, 2014, the annual money-weighted rate of return on pension plan investments, net of investment expense, was 4.55%. \r\nThe following table summarizes the adopted asset allocation policy at June 30, 2015: \r\n \r\nAsset Class \r\n \r\nAdopted Asset Allocation \r\n \r\nDomestic Equities International Equities Fixed Income Cash Total \r\n \r\n40% to 50% 1% to 5% \r\n35% to 45% 1% to 5% 100% \r\n \r\n- 34 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"I\" \r\n \r\nPension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to the Plan: \r\nThe components of the Net Pension Liability for the Plan at June 30, 2015 were as follows: \r\n \r\nTotal Pension Liability Plan Fiduciary Net Position \r\nNet Pension Liability \r\n \r\n$ \r\n \r\n6,928,494.00 \r\n \r\n-3,559,073.00 \r\n \r\n$ \r\n \r\n3,369,421.00 \r\n \r\nThe Plan's fiduciary net position as a percentage of total pension liability is 51.37%. \r\nThe Net Pension Liability for the Plan was measured as of December 31, 2014. The total pension liability used to calculate the Net Pension Liability was based on an actuarial valuation as of January 1, 2014. An expected total pension liability as of December 31, 2014 was determined using standard roll-forward techniques. \r\nFor the year ended June 30, 2015, the School District recognized pension expense of $401,012.00 for the Plan. \r\nAt June 30, 2015, the School District reported deferred outflows of resources and deferred inflows of resources related to the Plan from the following sources: \r\n \r\nNet difference between projected and actual earnings on pension plan investments \r\nDifferences between expected and actual experience Changes in actuarial assumptions \r\nSchool District contributions subsequent to the measurement date \r\n \r\nDeferred Outflows of Resources \r\n \r\nDeferred Inflows of Resources \r\n \r\n$ \r\n \r\n65,734.00 \r\n \r\n$ 430,849.00 \r\n \r\n407,348.00 \r\n \r\n310,889.00 \r\n \r\nTotal \r\n \r\n$ \r\n \r\n807,472.00 $ \r\n \r\n407,348.00 \r\n \r\n- 35 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"I\" \r\n \r\nPolk County School District contributions subsequent to the measurement date of December 31, 2014 for SSRP 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 the Plan will be recognized in pension expense as follows: \r\nYear Ended June 30: \r\n \r\n2016 2017 2018 2019 2020 Thereafter \r\n \r\n$ 18,676.00 $ 18,676.00 $ 18,676.00 $ 18,674.00 $ 2,242.00 $ 12,291.00 \r\n \r\nActuarial Methods and Assumptions: \r\n \r\nThe total pension liability was determined as of January 1, 2014 using the following actuarial assumptions and methods and adjusted to December 31, 2014 using generally accepted actuarial methods: \r\n \r\nInflation Salary Increases Investment rate of return \r\n \r\n2.50% 3.50% 7.00%, net of pension plan investment expense \r\n \r\nMortality rates were based on the 1994 GAR projected to 2002. \r\n \r\nThe long-term expected rate of return on the Plan investments was determined using a building-block method in which best-estimate ranges of expected future real rate of return, net investment expenses and inflation, are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by expected inflation. Best estimate of arithmetic real rate of return for each major asset class, included in the Plan's target asset allocation as of December 31, 2014. \r\n \r\nAsset Class \r\n \r\nTarget Allocation \r\n \r\nLong-Term Expected Real Rate of Return \r\n \r\nDomestic Equities International Equities Fixed Income Cash \r\n \r\n49% 5% \r\n41% 5% \r\n \r\n6.500% 6.750% 3.375% 0.000% \r\n \r\nDiscount rate: The discount rate used to measure the total pension liability was the single equivalent discount rate of 5.11%, which decreased from 5.74% at the prior measurement date. The projection of cash flows used to determine the discount rate assumed that employer contributions will be made at rates equal to actuarially determined contribution rates. Based on this assumption, the Plan's fiduciary net position was projected to be available to make all projected future benefits payments of current plan members through 2039, and the long-term expected rate of return of 7% was applied to this period. The 20-year taxfree municipal bond yield of 3.65% was applied after 2039. \r\n \r\n- 36 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2015 \r\n \r\nEXHIBIT \"I\" \r\n \r\nSensitivity of the Polk County School District's Net Pension Liability to changes in the discount rate: The following presents the School District's Net Pension Liability calculated using the discount rate of 5.11%, as well as what the School District's Net Pension Liability would be if it were calculated using a discount rate that is 1-percentage-point lower (4.11%) or 1-percentage-point higher (6.11%) than the current rate: \r\n \r\nSchool District's proportionate share of the Net Pension Liability \r\n \r\n1% Decrease (4.11%) \r\n \r\nCurrent discount rate (5.11%) \r\n \r\n1% Increase (6.11%) \r\n \r\n$ 4,227,134.00 $ \r\n \r\n3,369,421.00 $ 2,641,953.00 \r\n \r\n- 37 - \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY TEACHERS' RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30, 2015 \r\n \r\nSCHEDULE \"1\" \r\n \r\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 \r\nassociated with the School District Total \r\nSchool District's covered-employee payroll School District's proportionate share of the net pension liability \r\nas a percentage of its covered employee payroll Plan fiduciary net position as a percentage of the total pension liability \r\n \r\n2015 \r\n \r\n0.346443% \r\n \r\n$ \r\n \r\n43,768,503.00 \r\n \r\n560,177.00 \r\n \r\n$ \r\n \r\n44,328,680.00 \r\n \r\n$ \r\n \r\n35,545,926.47 \r\n \r\n123.13% 84.03% \r\n \r\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 Polk County School District. \r\n- 39 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30, 2015 \r\n \r\nSCHEDULE \"2\" \r\n \r\nSchool District's proportion of the net pension liability School District's proportionate share of the net pension liability School District's covered-employee payroll School District's proportionate share of the net pension liability \r\nas a percentage of its covered employee payroll Plan fiduciary net position as a percentage of the total pension liability \r\n \r\n2015 \r\n \r\n0.003393% \r\n \r\n$ 127,258.00 \r\n \r\n$ \r\n \r\n76,400.48 \r\n \r\n166.57% 77.99% \r\n \r\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 Polk County School District. \r\n- 40 - \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \r\nSCHEDULE OF CONTRIBUTIONS TEACHERS' RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\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 \r\n \r\n2015 \r\n \r\n2014 \r\n \r\n2013 \r\n \r\n$ \r\n \r\n4,854,341.52 $ 4,365,039.77 $ 4,154,316.25 \r\n \r\n$ \r\n \r\n4,854,341.52 $ 4,365,039.77 $ 4,154,316.25 \r\n \r\n$ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n0.00 \r\n \r\n$ \r\n \r\n36,915,144.69 $ 35,545,926.47 $ 36,409,432.52 \r\n \r\n13.15% \r\n \r\n12.28% \r\n \r\n11.41% \r\n \r\nThis schedule is intended to show information for 10 years. Due to the retention policy of the Polk County School District, the School District is only able to display 7 years of information. \r\n- 42 - \r\n \r\n SCHEDULE \"3\" \r\n \r\n2012 \r\n \r\n2011 \r\n \r\n2010 \r\n \r\n2009 \r\n \r\n$ 3,880,783.16 $ 3,912,362.94 $ 3,634,318.60 $ $ 3,611,227.53 \r\n \r\n$ 3,880,783.16 $ 3,912,362.94 $ 3,634,318.60 $ 3,611,227.53 \r\n \r\n$ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n0.00 \r\n \r\n$ 37,750,808.95 $ 38,058,005.25 $ 37,313,332.65 $ 38,914,089.76 \r\n \r\n10.28% \r\n \r\n10.28% \r\n \r\n9.74% \r\n \r\n9.28% \r\n \r\n- 43 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION \r\nSCHEDULE OF CONTRIBUTIONS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\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 \r\n \r\n2015 \r\n \r\n2014 \r\n \r\n2013 \r\n \r\n$ \r\n \r\n17,207.88 $ 14,104.00 $ 11,306.36 \r\n \r\n$ \r\n \r\n17,207.88 $ 14,104.00 $ 11,306.36 \r\n \r\n$ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n0.00 \r\n \r\n$ \r\n \r\n78,360.00 $ 76,400.48 $ 75,872.88 \r\n \r\n21.96% \r\n \r\n18.46% \r\n \r\n14.90% \r\n \r\nThis schedule is intended to show information for 10 years. Due to the retention policy of the Polk County School District, the School District is only able to display 7 years of information. \r\n- 44 - \r\n \r\n SCHEDULE \"4\" \r\n \r\n2012 \r\n \r\n2011 \r\n \r\n$ 2,581.12 $ 6,124.09 $ \r\n \r\n$ 2,581.12 $ 6,124.09 $ \r\n \r\n$ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n$ 22,193.64 $ 58,828.91 $ \r\n \r\n11.63% \r\n \r\n10.41% \r\n \r\n2010 18,234.41 $ 18,234.41 $ \r\n0.00 $ 175,162.44 $ \r\n10.41% \r\n \r\n2009 26,889.19 26,889.19 \r\n0.00 258,301.54 \r\n10.41% \r\n \r\n- 45 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS \r\nSOCIAL SECURITY REPLACEMENT PLAN FOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"5\" \r\n \r\nTotal Pension Liability Service Cost Interest Differences between Expected and Actual Experience Change of Assumptions Benefit Payments \r\nNet Change in Total Pension Liability \r\nTotal Pension Liability - beginning \r\nTotal Pension Liability - ending (a) \r\nPlan Fiduciary Net Position Contributions - employer Net Investment Income Benefit Payments Administrative Expenses Other \r\nNet change in Plan Fiduciary Net Position \r\nPlan Fiduciary Net Position - beginning \r\nPlan Fiduciary Net Position - ending (b) \r\nNet Pension Liability - ending (a - b) \r\nPlan Fiduciary Net Position as a percentage of the Total Pension Liability \r\nCovered-Employee Payroll \r\nNet Pension Liability as a percentage of Covered-Employee Payroll \r\n \r\n2015 \r\n \r\n2014 \r\n \r\n$ 203,802.00 $ 378,679.00 -446,217.00 471,960.00 -244,169.00 \r\n \r\n164,756.00 363,955.00 251,101.00 832,322.00 -221,185.00 \r\n \r\n364,055.00 \r\n \r\n1,390,949.00 \r\n \r\n6,564,439.00 \r\n \r\n5,173,490.00 \r\n \r\n$ 6,928,494.00 $ 6,564,439.00 \r\n \r\n$ 310,889.00 $ 147,675.00 -244,169.00 -25,205.00 -4,493.00 \r\n \r\n304,253.00 473,233.00 -221,185.00 -23,094.00 \r\n-242.00 \r\n \r\n184,697.00 \r\n \r\n532,965.00 \r\n \r\n3,374,376.00 \r\n \r\n2,841,411.00 \r\n \r\n3,559,073.00 \r\n \r\n3,374,376.00 \r\n \r\n$ 3,369,421.00 $ 3,190,063.00 \r\n \r\n51.37% \r\n \r\n51.40% \r\n \r\n$ 2,562,945.00 $ 2,726,676.00 \r\n \r\n131.47% \r\n \r\n117.00% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n- 46 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF CONTRIBUTIONS SOCIAL SECURITY REPLACEMENT PLAN FOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"6\" \r\n \r\nActuarially determined contribution Contribution in relation to the actuarially determined contribution Contribution deficiency (excess) School District's covered-employee payroll Contributions as a percentage of covered-employee payroll \r\n \r\n2015 \r\n \r\n2014 \r\n \r\n$ \r\n \r\n310,889.00 $ 304,253.00 \r\n \r\n$ \r\n \r\n310,889.00 $ 304,253.00 \r\n \r\n$ \r\n \r\n0.00 $ \r\n \r\n0.00 \r\n \r\n$ 2,562,945.00 $ 2,726,676.00 \r\n \r\n12.13% \r\n \r\n11.16% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. - 47 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF INVESTMENT RETURNS SOCIAL SECURITY REPLACEMENT PLAN \r\nYEAR ENDED JUNE 30 \r\nAnnual Money-Weighted Rate of Return, Net of Investment Expense \r\n \r\nSCHEDULE \"7\" \r\n \r\n2015 4.55% \r\n \r\n2014 17.25% \r\n \r\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. - 48 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION \r\nFOR THE YEAR ENDED JUNE 30, 2015 \r\n \r\nSCHEDULE \"8\" \r\n \r\nTeachers' Retirement System \r\n \r\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. \r\n \r\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: \r\n \r\nValuation date Actuarial cost method Amortization method Remaining amortization period Asset valuation method Inflation rate Salary increases Investment rate of return \r\nEmployees' Retirement System \r\n \r\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 \r\nexpense, including inflation \r\n \r\nChanges of assumptions : There were no changes in assumptions or benefits that affect the measurement of the total pension liability since the prior measurement date. \r\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: \r\n \r\nValuation date Actuarial cost method Amortization method Remaining amortization period Asset valuation method Inflation rate Salary increases \r\nInvestment rate of return \r\n \r\nJune 30, 2012 Entry age Level dollar, open 30 years Seven-year smoothed market 3.00% 2.725%  4.625% for FY 2012-2013, 5.45% - 9.25% for FY2014+ 7.50%, net of pension plan investment \r\nexpense, including inflation \r\n \r\n- 49 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION \r\nFOR THE YEAR ENDED JUNE 30, 2015 \r\n \r\nSCHEDULE \"8\" \r\n \r\nSocial Security Replacement Plan \r\nChanges of assumptions : There were no changes in benefits that affected the measurement of the total pension liability since the prior measurement date. However, in 2015 the amounts reported as changes in assumptions resulted from a decrease in the discount rate from 5.74% to 5.11% since the prior measurement date. \r\nMethod and assumptions used in calculations of actuarially determined contributions: The actuarially determined contribution rate in the schedule of contributions are calculated as January 1, 2014, 18 months 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: \r\n \r\nValuation date Actuarial cost method Amortization method Remaining amortization period Asset valuation method \r\nInflation rate Salary increases Investment rate of return \r\n \r\nJanuary 1, 2014 Entry age Level percentage of payroll 24 years Method recognizes a portion of the difference between the market value of assets and expected actuarial value of assets, based on the assumed interest rate of return. The amount recognized each year is 20% of the difference between market value and expected actuarial value. \r\n2.50% 3.50%, per annum 7.00%, net of pension plan investment \r\n \r\n- 50 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT GENERAL FUND \r\nSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL \r\nYEAR ENDED JUNE 30, 2015 \r\n \r\nSCHEDULE \"9\" \r\n \r\nREVENUES \r\nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous \r\nTotal Revenues \r\nEXPENDITURES \r\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 \r\nTotal Expenditures \r\nExcess of Revenues over (under) Expenditures \r\nOTHER FINANCING SOURCES (USES) \r\nOther Sources Other Uses \r\nTotal Other Financing Sources (Uses) \r\nNet Change in Fund Balances \r\nFund Balances - Beginning \r\nAdjustments \r\nFund Balances - Ending \r\n \r\nNONAPPROPRIATED BUDGETS \r\n \r\nORIGINAL (1) \r\n \r\nFINAL (1) \r\n \r\nACTUAL AMOUNTS \r\n \r\nVARIANCE OVER/UNDER \r\n \r\n$ \r\n \r\n12,860,000.00 $ \r\n \r\n12,860,000.00 $ \r\n \r\n15,089,369.96 $ \r\n \r\n138,023.83 \r\n \r\n40,769,257.84 \r\n \r\n41,167,128.25 \r\n \r\n41,968,074.18 \r\n \r\n1,714,407.00 \r\n \r\n5,145,312.00 \r\n \r\n8,969,109.45 \r\n \r\n2,021,462.49 \r\n \r\n3,000.00 \r\n \r\n3,000.00 \r\n \r\n4,945.11 \r\n \r\n35,000.00 \r\n \r\n235,000.00 \r\n \r\n793,545.15 \r\n \r\n55,381,664.84 \r\n \r\n59,410,440.25 \r\n \r\n68,984,530.17 \r\n \r\n2,229,369.96 138,023.83 800,945.93 \r\n3,823,797.45 2,021,462.49 \r\n1,945.11 558,545.15 \r\n9,574,089.92 \r\n \r\n42,518,926.00 \r\n1,329,336.00 716,610.00 927,322.00 565,538.00 \r\n3,130,252.00 831,534.00 \r\n4,327,984.00 2,314,945.00 \r\n138,055.00 32,348.00 \r\n3,846,027.00 \r\n60,678,877.00 \r\n-5,297,212.16 \r\n \r\n44,949,061.25 \r\n1,395,387.00 1,884,407.00 \r\n927,322.00 542,736.00 3,130,472.00 831,534.00 4,333,984.00 2,452,897.00 185,404.00 240,615.00 \r\n3,846,027.00 \r\n64,719,846.25 \r\n-5,309,406.00 \r\n \r\n43,431,140.47 \r\n1,429,743.69 1,701,977.56 \r\n913,101.66 822,777.87 3,316,406.77 753,551.90 4,819,726.00 2,256,123.04 190,009.96 220,659.43 1,885,041.54 4,401,466.58 \r\n66,141,726.47 \r\n2,842,803.70 \r\n \r\n1,517,920.78 \r\n-34,356.69 182,429.44 \r\n14,220.34 -280,041.87 -185,934.77 \r\n77,982.10 -485,742.00 196,773.96 \r\n-4,605.96 19,955.57 -1,885,041.54 -555,439.58 \r\n-1,421,880.22 \r\n8,152,209.70 \r\n \r\n350,000.00 -350,000.00 \r\n0.00 -5,297,212.16 7,433,325.54 \r\n \r\n530,000.00 -530,000.00 \r\n0.00 -5,309,406.00 7,397,258.88 \r\n-16,741.94 \r\n \r\n-317,463.97 -317,463.97 2,525,339.73 7,402,809.39 \r\n \r\n-530,000.00 212,536.03 -317,463.97 7,834,745.73 \r\n5,550.51 16,741.94 \r\n \r\n$ \r\n \r\n2,136,113.38 $ \r\n \r\n2,071,110.94 $ \r\n \r\n9,928,149.12 $ \r\n \r\n7,857,038.18 \r\n \r\nNotes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual \r\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 $2,267,644.28 and $2,185,556.71 respectively. \r\nThe accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements. \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 51 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \r\nYEAR ENDED JUNE 30, 2015 \r\n \r\nSCHEDULE \"10\" \r\n \r\nFUNDING AGENCY PROGRAM/GRANT \r\nAgriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program \r\nTotal Child Nutrition Cluster \r\nOther Programs Pass-Through From Georgia Department of Education Food Services ARRA - Child Nutrition Discretionary Grants Limited Availability Fresh Fruit and Vegetable Program \r\nTotal Other Programs \r\nTotal U. S. Department of Agriculture \r\nEducation, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Special Education Grants to States Preschool Grants \r\nTotal Special Education Cluster \r\nOther Programs Pass-Through From Georgia Department of Education ARRA - Race-to-the-Top Incentive Grants Career and Technical Education - Basic Grants to States Education for Homeless Children and Youth English Language Acquisition Grants Improving Teacher Quality State Grants Migrant Education - State Grant Program Rural Education Title I Grants to Local Educational Agencies \r\nTotal Other Programs \r\nTotal U. S. Department of Education \r\n \r\nCFDA NUMBER \r\n \r\nPASSTHROUGH \r\nENTITY ID \r\nNUMBER \r\n \r\nEXPENDITURES IN PERIOD \r\n \r\n* 10.553 * 10.555 \r\n \r\nN/A \r\n \r\n(2) \r\n \r\nN/A \r\n \r\n$ \r\n \r\n4,030,462.36 (1) \r\n \r\n4,030,462.36 \r\n \r\n10.579 \r\n \r\nN/A \r\n \r\n10.582 \r\n \r\nN/A \r\n \r\n26,500.00 152,466.19 \r\n178,966.19 \r\n4,209,428.55 \r\n \r\n* 84.027 \r\n \r\nN/A \r\n \r\n* 84.173 \r\n \r\nN/A \r\n \r\n84.395 \r\n \r\nN/A \r\n \r\n84.048 \r\n \r\nN/A \r\n \r\n84.196 \r\n \r\nN/A \r\n \r\n84.365 \r\n \r\nN/A \r\n \r\n84.367 \r\n \r\nN/A \r\n \r\n84.011 \r\n \r\nN/A \r\n \r\n84.358 \r\n \r\nN/A \r\n \r\n84.010 \r\n \r\nN/A \r\n \r\n1,182,243.61 32,159.28 \r\n1,214,402.89 \r\n19,156.56 88,673.63 52,089.61 80,467.15 321,978.71 31,025.23 148,221.26 2,560,565.46 \r\n3,302,177.61 \r\n4,516,580.50 \r\n \r\nTotal Expenditures of Federal Awards N/A = Not Available \r\n \r\n$ \r\n \r\n8,726,009.05 \r\n \r\n- 52 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \r\nYEAR ENDED JUNE 30, 2015 \r\n \r\nSCHEDULE \"10\" \r\n \r\nNotes to the Schedule of Expenditures of Federal Awards \r\n(1) Includes the Federally assigned value of donated commodities for the Food Donation Program in the amount of $192,536.81. (2) Expenditures for the funds earned on the School Breakfast Program of ($1,341,973.61) were not maintained separately and are included in the \r\n2015 National School Lunch Program. \r\nMajor Programs are identified by an asterisk (*) in front of the CFDA number. \r\nThe School District did not provide Federal Assistance to any Subrecipient. \r\nThe accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Polk County School District 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. \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 53 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2015 \r\n \r\nSCHEDULE \"11\" \r\n \r\nAGENCY/FUNDING \r\nGRANTS Bright From the Start: Georgia Department of Early Care and Learning Pre-Kindergarten Program \r\nEducation, 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 Amended Formula Adjustment Categorical Grants Pupil Transportation Regular Nursing Services Education Equalization Funding Grant Other State Programs Food Services Math and Science Supplements Preschool Handicapped Program Residential and Reintegration Services Teacher of the Year Teachers' Retirement Vocational Education Vocational Construction Related Equipment - State Bonds \r\nGeorgia Northwestern Technical College College and Career Academy \r\nOffice of the State Treasurer Public School Employees Retirement \r\nCONTRACT Human Resources, Georgia Department of Family Connection \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 54 - \r\n \r\nGOVERNMENTAL FUND TYPES \r\n \r\nCAPITAL \r\n \r\nGENERAL \r\n \r\nPROJECTS \r\n \r\nFUND \r\n \r\nFUND \r\n \r\nTOTAL \r\n \r\n$ 1,134,749.18 \r\n \r\n$ 1,134,749.18 \r\n \r\n2,758,856.00 145,310.00 \r\n6,612,119.00 296,789.00 \r\n2,641,022.00 263,299.00 \r\n4,297,217.00 3,822,768.00 1,185,082.00 6,754,855.00 1,610,199.00 \r\n493,999.00 307,164.00 762,446.00 852,375.00 251,459.00 150,055.00 \r\n3,241.00 \r\n992,367.00 1,699,948.00 1,974,863.00 -3,426,820.00 \r\n \r\n2,758,856.00 145,310.00 \r\n6,612,119.00 296,789.00 \r\n2,641,022.00 263,299.00 \r\n4,297,217.00 3,822,768.00 1,185,082.00 6,754,855.00 1,610,199.00 \r\n493,999.00 307,164.00 762,446.00 852,375.00 251,459.00 150,055.00 \r\n3,241.00 \r\n992,367.00 1,699,948.00 1,974,863.00 -3,426,820.00 \r\n \r\n778,148.00 142,787.00 4,473,310.00 \r\n102,790.00 29,105.98 \r\n165,063.00 339,206.00 \r\n1,014.25 46,261.32 26,136.00 83,306.00 \r\n \r\n778,148.00 142,787.00 4,473,310.00 \r\n102,790.00 29,105.98 \r\n165,063.00 339,206.00 \r\n1,014.25 46,261.32 26,136.00 83,306.00 \r\n \r\n110,000.00 \r\n \r\n110,000.00 \r\n \r\n127,380.00 \r\n \r\n127,380.00 \r\n \r\n70,204.45 \r\n \r\n70,204.45 \r\n \r\n$ 41,968,074.18 $ 110,000.00 $ 42,078,074.18 \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \r\nYEAR ENDED JUNE 30, 2015 \r\n \r\nSCHEDULE \"12\" \r\n \r\nPROJECT \r\n \r\nORIGINAL ESTIMATED \r\nCOST (1) \r\n \r\nCURRENT ESTIMATED COSTS (2) \r\n \r\nAMOUNT EXPENDED IN CURRENT YEAR (3) (4) \r\n \r\nAMOUNT EXPENDED IN PRIOR YEARS (3) (4) \r\n \r\nTOTAL COMPLETION \r\nCOST \r\n \r\nEXCESS PROCEEDS NOT \r\nEXPENDED \r\n \r\nSPLOST IV \r\n \r\nAcquiring, constructing, equipping, and completing the Rockmart area Van Wert Elementary School, \r\n \r\nAcquiring constructing, equipping and completing \r\n \r\nthe Cedartown area Youngs Grove Elementary \r\n \r\nSchool, \r\n \r\nAdding to constructing, renovating, repairing, \r\n \r\nimproving, acquiring, and equipping school buildings, \r\n \r\nother buildings, facilities, property and equipment, \r\n \r\nboth real and personal, useful or desirable in \r\n \r\nconnection therewith. \r\n \r\n$ \r\n \r\n35,000,000.00 $ \r\n \r\n27,378,107.43 $ \r\n \r\n69,596.38 $ 27,038,515.50 \r\n \r\nSPLOST V \r\nLast payment on Apple Lease #1 - iPads \r\nRenovations, repairs and improvements made at existing schools to include Cedartown High School Football Stadium, baseball fence and media wall, dug outs at both High Schools; Northside playground and fence; system furniture, and roof studies \r\n \r\n90,000.00 300,000.00 \r\n \r\n87,588.36 \r\n \r\n87,588.36 \r\n \r\n281,604.64 \r\n \r\n281,604.64 \r\n \r\nRHS billboard Constructing a field house at Rockmart High School Acquiring music and instruments for both Cedartown and Rockmart Bands Acquiring and installing system-wide instructional and administrative technology Acquiring vehicles for System Cedartown High School Gym Renovations Renovations at Eastside Elementary 2014 Bond issuance cost and agent fee \r\n \r\n75,000.00 4,285,722.00 \r\n10,000.00 \r\n1,500,000.00 60,000.00 \r\n550,000.00 3,300,000.00 \r\n236,410.00 \r\n \r\n74,740.00 4,266,203.00 \r\n9,950.45 \r\n1,345,326.78 53,794.00 \r\n537,278.00 3,386,275.00 \r\n236,409.51 \r\n \r\n74,740.00 303,988.42 \r\n9,950.45 \r\n1,345,326.78 53,794.00 \r\n537,278.00 536,523.23 236,409.51 \r\n \r\nDemolition of Vocational Buildings at Cedartown High School \r\nPaying expenses to relocate vocational classrooms and store equipment until Polk County College and Career Academy is constructed. \r\nPolk County College and Career Academy \r\nCedartown High Additions/Modifications Fine Arts \r\nWestside Renovations \r\n \r\n227,868.00 \r\n \r\n284,129.56 \r\n \r\n115,000.00 8,850,000.00 7,500,000.00 \r\n900,000.00 \r\n \r\n112,035.43 8,870,000.00 7,475,000.00 \r\n914,285.00 \r\n \r\n284,129.56 112,035.43 \r\n \r\n$ 28,000,000.00 $ 27,934,619.73 $ 3,863,368.38 $ \r\n \r\n74,740.00 \r\n537,278.00 284,129.56 \r\n \r\n0.00 $ 896,147.56 $ \r\n \r\n0.00 \r\n \r\nESTIMATED COMPLETION \r\nDATE \r\n6/30/2016 \r\n6/30/2016 \r\n4/30/2021 Complete \r\n8/30/2016 6/30/2016 4/30/2021 6/30/2016 \r\nComplete 8/30/2016 \r\nComplete Complete \r\n12/31/2016 10/30/2016 07/31/2018 \r\n4/30/2021 \r\n \r\n$ 63,000,000.00 $ 55,312,727.16 $ 3,932,964.76 $ 27,038,515.50 $ 896,147.56 $ \r\n \r\n0.00 \r\n \r\n(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax. \r\n \r\n(2) The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion. \r\n \r\n(3) The voters of Polk 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. \r\n \r\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: \r\n \r\nPrior Years \r\n \r\n$ 3,792,913.73 \r\n \r\nCurrent Year \r\n \r\n327,145.00 \r\n \r\nTotal \r\n \r\n$ 4,120,058.73 \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 55 - \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) \r\nALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2015 \r\n \r\nSCHEDULE \"13\" \r\n \r\nDESCRIPTION \r\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 III Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) \r\nTOTAL DIRECT INSTRUCTIONAL PROGRAMS \r\nMedia Center Program Staff and Professional Development \r\n \r\nALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) (2) \r\n \r\nELIGIBLE QBE PROGRAM COSTS \r\n \r\nSALARIES \r\n \r\nOPERATIONS \r\n \r\nTOTAL \r\n \r\n$ \r\n \r\n3,147,260.00 $ \r\n \r\n3,245,737.88 $ \r\n \r\n6,901.79 $ 3,252,639.67 \r\n \r\n195,281.00 \r\n \r\n230,896.09 \r\n \r\n258.91 \r\n \r\n231,155.00 \r\n \r\n7,430,438.00 \r\n \r\n7,100,488.31 \r\n \r\n19,380.70 \r\n \r\n7,119,869.01 \r\n \r\n348,872.00 \r\n \r\n509,133.24 \r\n \r\n509,133.24 \r\n \r\n2,976,476.00 \r\n \r\n3,473,981.69 \r\n \r\n9,955.65 \r\n \r\n3,483,937.34 \r\n \r\n335,146.00 4,888,493.00 4,309,667.00 1,360,543.00 \r\n \r\n623,809.02 4,526,260.05 4,286,963.74 1,424,888.68 \r\n \r\n49.95 10,384.88 43,002.09 88,321.35 \r\n \r\n623,858.97 4,536,644.93 4,329,965.83 1,513,210.03 \r\n \r\n7,617,992.00 1,799,520.00 \r\n558,190.00 349,506.00 846,608.00 \r\n \r\n6,481,345.84 1,211,920.46 \r\n439,370.92 598,539.09 781,820.22 \r\n \r\n15,084.38 532.24 \r\n \r\n6,496,430.22 1,212,452.70 \r\n439,370.92 598,539.09 781,820.22 \r\n \r\n36,163,992.00 \r\n \r\n34,935,155.23 \r\n \r\n193,871.94 \r\n \r\n35,129,027.17 \r\n \r\n964,844.00 170,092.00 \r\n \r\n857,385.86 2,556.32 \r\n \r\n44,565.80 11,398.78 \r\n \r\n901,951.66 13,955.10 \r\n \r\nTOTAL QBE FORMULA FUNDS \r\n \r\n$ \r\n \r\n37,298,928.00 $ \r\n \r\n35,795,097.41 $ \r\n \r\n249,836.52 $ 36,044,933.93 \r\n \r\n(1) Comprised of State Funds plus Local Five Mill Share. (2) Allotments do not include the impact of the State amended formula adjustment. \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 57 - \r\n \r\n (This page left intentionally blank) \r\n \r\n SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS \r\n \r\n (This page left intentionally blank) \r\n \r\n Greg S. Griffin \r\nSTATE AUDITOR \r\n(404) 656-2174 \r\n \r\nDEPARTMENT OF AUDITS AND ACCOUNTS \r\n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \r\nAugust 29, 2016 \r\n \r\nHonorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education \r\nand Superintendent and Members of the Polk County School District \r\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 \r\nLadies and Gentlemen: \r\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 Polk County School District as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise Polk County School District's basic financial statements and have issued our report thereon dated August 29, 2016. \r\nInternal Control Over Financial Reporting \r\nIn planning and performing our audit of the financial statements, we considered Polk County 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 Polk County School District's internal control. Accordingly, we do not express an opinion on the effectiveness of the Polk County School District's internal control. \r\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. \r\n \r\n2015YB-10 \r\n \r\n (This page left intentionally blank) \r\n \r\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. 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. \r\nCompliance and Other Matters \r\nAs part of obtaining reasonable assurance about whether Polk County 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. \r\nPurpose of this Report \r\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, not to provide an opinion on the effectiveness of the Polk County 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 Polk County School District's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. \r\nRespectfully submitted, \r\n \r\nGSG:er 2015YB-10 \r\n \r\nGreg S. Griffin State Auditor \r\n \r\n (This page left intentionally blank) \r\n \r\n Greg S. Griffin \r\nSTATE AUDITOR \r\n(404) 656-2174 \r\n \r\nDEPARTMENT OF AUDITS AND ACCOUNTS \r\n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \r\nAugust 29, 2016 \r\n \r\nHonorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education \r\nand Superintendent and Members of the Polk County School District \r\nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 \r\nLadies and Gentlemen: \r\nReport on Compliance for Each Major Federal Program \r\nWe have audited Polk County School District'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. Polk County 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. \r\nManagement's Responsibility \r\nManagement is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. \r\nAuditor's Responsibility \r\nOur responsibility is to express an opinion on compliance for each of Polk County 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 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 Polk County School District's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. \r\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 Polk County School District's compliance. \r\n2015SA-10 \r\n \r\n (This page left intentionally blank) \r\n \r\n Opinion on Each Major Federal Program \r\nIn our opinion, the Polk County 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, 2015. \r\nReport on Internal Control over Compliance \r\nManagement of Polk County 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 Polk County 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 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 Polk County School District's internal control over compliance. \r\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. \r\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. \r\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. \r\nRespectfully submitted, \r\n \r\nGSG:er 2015SA-10 \r\n \r\nGreg S. Griffin State Auditor \r\n \r\n (This page left intentionally blank) \r\n \r\n SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT AUDITEE'S RESPONSE \r\nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2015 \r\nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. \r\n \r\n (This page left intentionally blank) \r\n \r\n SECTION IV FINDINGS AND QUESTIONED COSTS \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2015 \r\n \r\nI SUMMARY OF AUDITOR'S RESULTS \r\n \r\nFinancial Statements \r\n \r\nType of auditor's report issue: Governmental Activities; General Fund; Capital Projects Fund; Debt Service Fund; Aggregate Remaining Fund Information \r\n \r\nUnmodified \r\n \r\nInternal control over financial reporting:  Material weakness identified?  Significant deficiency identified? \r\n \r\nNo None Reported \r\n \r\nNoncompliance material to financial statements noted: \r\n \r\nNo \r\n \r\nFederal Awards \r\n \r\nInternal Control over major programs:  Material weakness identified?  Significant deficiency identified? \r\n \r\nNo None Reported \r\n \r\nType of auditor's report issued on compliance for major programs: All major programs \r\n \r\nUnmodified \r\n \r\nAny audit findings disclosed that are required to be reported in \r\n \r\naccordance with OMB Circular A-133, Section 510(a)? \r\n \r\nNo \r\n \r\nIdentification of major programs: \r\n \r\nCFDA Numbers \r\n \r\nName of Federal Program or Cluster \r\n \r\n10.553, 10.555 84.027, 84.173 \r\n \r\nChild Nutrition Cluster Special Education Cluster \r\n \r\nDollar threshold used to distinguish between Type A and Type B programs: \r\n \r\n$300,000.00 \r\n \r\nAuditee qualified as low-risk auditee? \r\n \r\nNo \r\n \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. \r\n \r\nIII FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. \r\n \r\n "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-be26-bp7-b2014-belec-p-btext","title":"Polk School District, Cedartown, 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":["2016-06-14"],"dcterms_description":["Annual financial report for the Polk 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":["Polk School District (Ga.)--Appropriations and expenditures--Periodicals.","Education--Georgia--Polk County--Auditing--Periodicals.","Education--Georgia--Polk County--Finance--Statistics--Periodicals.","Georgia Government Documents--Serial"],"dcterms_title":["Polk School District, Cedartown, 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-bp7-b2014-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-be26-bp7-b2014-belec-p-btext"],"dcterms_temporal":null,"dcterms_rights_holder":null,"dcterms_bibliographic_citation":null,"dlg_local_right":null,"dcterms_medium":["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":"POLK SCHOOL DISTRICT CEDARTOWN, GEORGIA \r\nANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED \r\nJUNE 30, 2014 (Including Independent Auditor's Reports) \r\n \r\n POLK COUNTY SCHOOL DISTRICT - TABLE OF CONTENTS - \r\n \r\nSECTION I \r\n \r\nFINANCIAL \r\n \r\nINDEPENDENT AUDITOR'S REPORT \r\n \r\nEXHIBITS \r\n \r\nBASIC FINANCIAL STATEMENTS \r\n \r\nDISTRICT-WIDE FINANCIAL STATEMENTS \r\n \r\nA \r\n \r\nSTATEMENT OF NET POSITION \r\n \r\nB \r\n \r\nSTATEMENT OF ACTIVITIES \r\n \r\nFUND FINANCIAL STATEMENTS \r\n \r\nC \r\n \r\nBALANCE SHEET \r\n \r\nGOVERNMENTAL FUNDS \r\n \r\nD \r\n \r\nRECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \r\n \r\nTO THE STATEMENT OF NET POSITION \r\n \r\nE \r\n \r\nSTATEMENT OF REVENUES, EXPENDITURES AND CHANGES \r\n \r\nIN FUND BALANCES \r\n \r\nGOVERNMENTAL FUNDS \r\n \r\nF \r\n \r\nRECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT \r\n \r\nOF REVENUES, EXPENDITURES AND CHANGES IN FUND \r\n \r\nBALANCES TO THE STATEMENT OF ACTIVITIES \r\n \r\nG \r\n \r\nSTATEMENT OF FIDUCIARY NET POSITION \r\n \r\nFIDUCIARY FUNDS \r\n \r\nH \r\n \r\nSTATEMENT OF CHANGES IN FIDUCIARY NET POSITION \r\n \r\nFIDUCIARY FUNDS \r\n \r\nI NOTES TO THE BASIC FINANCIAL STATEMENTS \r\n \r\nSCHEDULES \r\n \r\nREQUIRED SUPPLEMENTARY INFORMATION \r\n \r\n1 SCHEDULE OF FUNDED PROGRESS SOCIAL SECURITY REPLACEMENT PLAN \r\n2 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND \r\n \r\nPage \r\n1 2 4 5 6 7 8 9 11 \r\n31 32 \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT - TABLE OF CONTENTS - \r\n \r\nSECTION I \r\nFINANCIAL \r\nSUPPLEMENTARY INFORMATION \r\n3 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 4 SCHEDULE OF STATE REVENUE 5 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 6 ALLOTMENTS AND EXPENDITURES \r\nGENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) BY PROGRAM \r\n \r\nPage \r\n33 34 35 37 \r\n \r\nSECTION II \r\nCOMPLIANCE AND INTERNAL CONTROL REPORTS \r\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 \r\nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 \r\n \r\nSECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS \r\n \r\nSECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\n \r\n (This page left intentionally blank) \r\n \r\n SECTION I FINANCIAL \r\n \r\n (This page left intentionally blank) \r\n \r\n Greg S. Griffin \r\nSTATE AUDITOR \r\n(404) 656-2174 \r\n \r\nDEPARTMENT OF AUDITS AND ACCOUNTS \r\n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \r\nJune 14, 2016 \r\n \r\nHonorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education \r\nand Superintendent and Members of the Polk County School District \r\nINDEPENDENT AUDITOR'S REPORT \r\nLadies and Gentlemen: \r\nReport on the Financial Statements \r\nWe have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Polk County School District, as of and for the year ended June 30, 2014, and the related notes to the financial statements (Exhibits A through I), which collectively comprise the Board's basic financial statements as listed in the table of contents. \r\nManagement's Responsibility for the Financial Statements \r\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. \r\nAuditor's Responsibility \r\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. \r\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 \r\n2014ARL-11X \r\n \r\n (This page left intentionally blank) \r\n \r\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. \r\nWe believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. \r\nOpinions \r\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 Polk County School District, 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. \r\nEmphasis of Matter \r\nAs described in Note 2 to the financial statements, in 2014 the Polk County School District 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. \r\nAs discussed in Note 2 to the financial statements, in 2014, the Polk County School District restated the prior period financial statements to correct immaterial misstatements. Our opinion is not modified with respect to this matter. \r\nAs discussed in the Statement of Changes in Fiduciary Net Position, in 2014, the Polk County School District restated prior period financial statements of the Pension Trust Fund to correct the Plan's fiscal year-end. Our opinion is not modified with respect to this matter. \r\nOther Matters \r\nRequired Supplementary Information \r\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 affect by this missing information. \r\nAccounting principles generally accepted in the United States of America require that various Schedules for the Polk County School District Social Security Replacement Plan, as presented on page 29 and the Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on page 30 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 \r\n2014ARL-11X \r\n \r\n (This page left intentionally blank) \r\n \r\n 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. \r\nOther Information \r\nOur audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Polk County School District's basic financial statements. The accompanying supplementary information, consisting of Schedules 3 through 6, 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. \r\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. \r\nOther Reporting Required by Government Auditing Standards \r\nIn accordance with Government Auditing Standards, we have also issued our report dated June 14, 2016, on our consideration of the Polk County 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 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 Polk County School District's internal control over financial reporting and compliance. \r\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. \r\nRespectfully submitted, \r\n \r\nGSG:er 2014ARL-11X \r\n \r\nGreg S. Griffin State Auditor \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT STATEMENT OF NET POSITION JUNE 30, 2014 \r\nASSETS \r\nCash and Cash Equivalents Investments Accounts Receivable, Net \r\nTaxes State Government Federal Government Local Other Inventories Capital Assets, Non-Depreciable Capital Assets, Depreciable (Net of Accumulated Depreciation) \r\nTotal Assets \r\nLIABILITIES \r\nAccounts Payable Salaries and Benefits Payable Net Pension Obligation Deposits and Unearned Revenues Long-Term Liabilities \r\nDue Within One Year Due in More Than One Year \r\nTotal Liabilities \r\nNET POSITION \r\nNet Investment in Capital Assets Restricted for \r\nContinuation of Federal Programs Debt Service Continuation of State Programs Unrestricted \r\nTotal Net Position \r\n \r\nEXHIBIT \"A\" \r\n \r\nGOVERNMENTAL ACTIVITIES \r\n \r\n$ \r\n \r\n8,326,895.03 \r\n \r\n3,437,002.18 \r\n \r\n2,375,428.91 4,889,389.29 \r\n824,331.64 10,603.49 1,732.79 \r\n151,215.17 2,575,759.20 75,854,110.68 \r\n \r\n98,446,468.38 \r\n \r\n524,848.79 7,361,522.28 \r\n174,708.00 6,840.36 \r\n4,939,352.51 6,379,396.78 \r\n19,386,668.72 \r\n \r\n67,842,986.74 \r\n473,538.33 3,601,112.23 \r\n46,914.29 7,095,248.07 \r\n \r\n$ \r\n \r\n79,059,799.66 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 1 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT STATEMENT OF ACTIVITIES \r\nFOR THE YEAR ENDED JUNE 30, 2014 \r\n \r\nGOVERNMENTAL ACTIVITIES \r\nInstruction Support Services \r\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 \r\nTotal Governmental Activities \r\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 \r\nSpecial Items Loss on Sale of Buildings \r\nTotal General Revenues and Special Items \r\nChange in Net Position \r\nNet Position - Beginning of Year (Restated) \r\nNet Position - End of Year \r\n \r\nEXPENSES \r\n \r\nCHARGES FOR SERVICES \r\n \r\n$ 44,074,149.52 $ \r\n1,444,953.31 1,325,595.19 \r\n990,699.56 881,440.06 2,911,949.01 672,508.81 4,876,118.12 2,943,972.25 \r\n34,925.93 325,963.48 \r\n2,102,752.43 3,933,826.02 \r\n532,857.88 \r\n$ 67,051,711.57 $ \r\n \r\n48,272.88 \r\n1,776,320.82 52,429.35 \r\n1,877,023.05 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 2 - \r\n \r\n EXHIBIT \"B\" \r\n \r\nPROGRAM REVENUES OPERATING GRANTS AND \r\nCONTRIBUTIONS \r\n \r\nCAPITAL GRANTS AND CONTRIBUTIONS \r\n \r\nNET (EXPENSES) REVENUES \r\nAND CHANGES IN NET POSITION \r\n \r\n$ 31,127,885.72 \r\n472,536.19 941,450.21 965,262.00 1,177,899.91 1,930,512.00 \r\n2,264,096.36 930,063.29 $ \r\n323,584.90 \r\n4,056,903.59 \r\n$ 44,190,194.17 $ \r\n \r\n$ 153,439.50 153,439.50 \r\n \r\n-12,897,990.92 \r\n-972,417.12 -384,144.98 \r\n-25,437.56 296,459.85 -981,437.01 -672,508.81 -2,612,021.76 -1,860,469.46 -34,925.93 \r\n-2,378.58 \r\n-326,431.61 175,506.92 -532,857.88 \r\n-20,831,054.85 \r\n \r\n15,475,155.20 36,385.62 \r\n \r\n4,676,531.83 139,742.75 \r\n3,123,049.00 61,018.60 \r\n769,914.91 \r\n-37,427.12 \r\n24,244,370.79 \r\n3,413,315.94 \r\n75,646,483.72 \r\n \r\n$ \r\n \r\n79,059,799.66 \r\n \r\n- 3 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT BALANCE SHEET \r\nGOVERNMENTAL FUNDS JUNE 30, 2014 \r\n \r\nEXHIBIT \"C\" \r\n \r\nASSETS \r\nCash and Cash Equivalents Investments Accounts Receivable, Net \r\nTaxes State Government Federal Government Local Other Inventories \r\n \r\nGENERAL FUND \r\n \r\nDISTRICT-WIDE CAPITAL PROJECTS FUND \r\n \r\nDEBT SERVICE \r\nFUND \r\n \r\nTOTAL \r\n \r\n$ 8,559,455.67 \r\n \r\n$ 8,559,455.67 \r\n \r\n10,413.28 $ 226,843.65 $ 3,199,745.25 \r\n \r\n3,437,002.18 \r\n \r\n1,961,226.81 4,889,389.29 \r\n824,331.64 10,603.49 1,732.79 \r\n151,215.17 \r\n \r\n414,202.10 \r\n \r\n2,375,428.91 4,889,389.29 \r\n824,331.64 10,603.49 1,732.79 \r\n151,215.17 \r\n \r\nTotal Assets \r\n \r\n$ 16,408,368.14 $ 226,843.65 $ 3,613,947.35 $ 20,249,159.14 \r\n \r\nLIABILITIES \r\nCash Overdraft Accounts Payable Salaries and Benefits Payable Deposits and Unearned Revenue \r\nTotal Liabilities \r\nDEFERRED INFLOWS OF RESOURCES \r\nUnavailable Revenue - Property Taxes \r\nFUND BALANCES \r\nNonspendable Restricted Assigned Unassigned \r\nTotal Fund Balances \r\n \r\n517,730.66 7,361,522.28 \r\n6,840.36 \r\n7,886,093.30 \r\n \r\n219,725.52 7,118.13 \r\n226,843.65 \r\n \r\n12,835.12 12,835.12 \r\n \r\n232,560.64 524,848.79 7,361,522.28 \r\n6,840.36 \r\n8,125,772.07 \r\n \r\n1,119,465.45 \r\n \r\n1,119,465.45 \r\n \r\n151,215.17 369,237.45 1,863,964.15 5,018,392.62 \r\n7,402,809.39 \r\n \r\n0.00 0.00 \r\n \r\n3,601,112.23 3,601,112.23 \r\n \r\n151,215.17 3,970,349.68 1,863,964.15 5,018,392.62 \r\n11,003,921.62 \r\n \r\nTotal Liabilities, Deferred Inflows of Resources, and Fund Balances \r\n \r\n$ 16,408,368.14 $ 226,843.65 $ 3,613,947.35 $ 20,249,159.14 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 4 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \r\nTO THE STATEMENT OF NET POSITION JUNE 30, 2014 \r\n \r\nEXHIBIT \"D\" \r\n \r\nTotal Fund Balances - Governmental Funds (Exhibit \"C\") \r\nAmounts reported for Governmental Activities in the Statement of Net Position are different because: \r\nCapital Assets used in Governmental Activities are not financial resources and therefore are not reported as assets in governmental funds. These assets consist of: \r\nLand Construction in Progress Land Improvements Buildings Equipment Accumulated Depreciation \r\nTotal Capital Assets \r\nTaxes that are not available to pay for current period expenditures are deferred in the governmental funds. \r\nProperty Taxes \r\nThe Net Pension obligation is not a current expenditure and is therefore not reported on the Governmental Funds Balance Sheet. \r\nSome Liabilities, including Bonds Payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. These Liabilities at year-end consist of: \r\nBonds Payable Capital Leases Payable \r\nTotal Long-Term Liabilities \r\nNet Position of Governmental Activities (Exhibit \"A\") \r\n \r\n$ 11,003,921.62 \r\n \r\n$ 2,288,639.20 287,120.00 \r\n2,519,979.05 92,501,852.09 \r\n4,894,636.70 -24,062,357.16 \r\n \r\n78,429,869.88 \r\n \r\n1,119,465.45 -174,708.00 \r\n \r\n$ -11,148,441.57 -170,307.72 \r\n \r\n-11,318,749.29 \r\n \r\n$ 79,059,799.66 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 5 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES \r\nGOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2014 \r\n \r\nEXHIBIT \"E\" \r\n \r\nREVENUES \r\nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous \r\nTotal Revenues \r\nEXPENDITURES \r\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 \r\nCapital Outlay Debt Services \r\nPrincipal Interest \r\nTotal Expenditures \r\nExcess of Revenues over (under) Expenditures \r\nOTHER FINANCING SOURCES (USES) \r\nTransfers In Transfers Out \r\nTotal Other Financing Sources (Uses) \r\nSPECIAL ITEMS \r\nProceeds from Sale of Buildings \r\nNet Change in Fund Balances \r\nFund Balances - Beginning \r\nFund Balances - Ending \r\n \r\nGENERAL FUND \r\n \r\nDISTRICT-WIDE CAPITAL PROJECTS FUND \r\n \r\nDEBT SERVICE \r\nFUND \r\n \r\nTOTAL \r\n \r\n$ \r\n \r\n15,255,044.05 \r\n \r\n139,742.75 \r\n \r\n38,674,616.35 \r\n \r\n8,792,066.33 \r\n \r\n1,877,023.05 \r\n \r\n3,925.63 $ \r\n \r\n469,699.69 \r\n \r\n65,212,117.85 \r\n \r\n$ \r\n332.01 300,215.22 300,547.23 \r\n \r\n$ 4,676,531.83 \r\n56,760.96 4,733,292.79 \r\n \r\n15,255,044.05 4,816,274.58 \r\n38,674,616.35 8,792,066.33 1,877,023.05 61,018.60 769,914.91 \r\n70,245,957.87 \r\n \r\n42,208,625.94 \r\n1,444,953.31 1,325,595.19 \r\n990,699.56 874,104.42 2,896,371.53 672,508.81 4,333,199.53 2,374,667.71 \r\n34,925.93 325,963.48 2,102,752.43 3,878,473.27 \r\n63,462,841.11 \r\n1,749,276.74 \r\n \r\n381,289.72 \r\n10,971.66 15,577.48 634,219.37 108,531.46 \r\n478,334.73 82,779.70 4,808.66 \r\n1,716,512.78 -1,415,965.55 \r\n \r\n3,175.00 \r\n4,855,000.00 4,858,175.00 \r\n-124,882.21 \r\n \r\n42,589,915.66 \r\n1,444,953.31 1,325,595.19 \r\n990,699.56 888,251.08 2,911,949.01 672,508.81 4,967,418.90 2,483,199.17 \r\n34,925.93 325,963.48 2,102,752.43 3,878,473.27 478,334.73 \r\n4,937,779.70 4,808.66 \r\n70,037,528.89 \r\n208,428.98 \r\n \r\n-651,868.03 -651,868.03 \r\n \r\n914,196.76 914,196.76 \r\n \r\n-262,328.73 -262,328.73 \r\n \r\n914,196.76 -914,196.76 \r\n0.00 \r\n \r\n1,097,408.71 6,305,400.68 \r\n \r\n$ \r\n \r\n7,402,809.39 $ \r\n \r\n124,000.00 -377,768.79 377,768.79 \r\n \r\n-387,210.94 3,988,323.17 \r\n \r\n124,000.00 332,428.98 10,671,492.64 \r\n \r\n0.00 $ \r\n \r\n3,601,112.23 $ 11,003,921.62 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 6 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF \r\nREVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2014 \r\n \r\nEXHIBIT \"F\" \r\n \r\nTotal Net Change in Fund Balances - Governmental Funds (Exhibit \"E\") \r\nAmounts reported for Governmental Activities in the Statement of Activities are different because: \r\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: \r\nCapital Outlay Depreciation Expense \r\nExcess of Capital Outlay over Depreciation Expense \r\nThe net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, donations, and disposals) is to decrease net position. \r\nTaxes reported in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. \r\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: \r\nBond Principal Retirements Accreted Interest on Capital Appreciation Bonds Capital Lease Payments \r\nTotal Long-Term Debt Repayments \r\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: \r\nIncrease in Net Pension Obligation \r\nChange in Net Position of Governmental Activities (Exhibit \"B\") \r\n \r\n$ 332,428.98 \r\n \r\n$ 707,894.95 -2,123,220.40 \r\n \r\n-1,415,325.45 \r\n \r\n-166,653.84 \r\n \r\n256,496.77 \r\n \r\n$ 4,855,000.00 -528,049.22 82,779.70 \r\n \r\n4,409,730.48 \r\n \r\n-3,361.00 $ 3,413,315.94 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 7 - \r\n \r\n ASSETS Cash and Cash Equivalents Investments \r\nTotal Assets \r\nLIABILITIES Funds Held for Others \r\nNET POSITION Employees' Pension Benefits Held in Trust for Private Purposes \r\n \r\nPOLK COUNTY SCHOOL DISTRICT STATEMENT OF FIDUCIARY NET POSITION \r\nFIDUCIARY FUNDS JUNE 30, 2013 \r\n \r\nEXHIBIT \"G\" \r\n \r\nPRIVATE PURPOSE TRUSTS \r\n \r\nAGENCY FUNDS \r\n \r\nPENSION TRUST FUND \r\n \r\n$ 10,415.51 $ 108,802.86 $ \r\n \r\n290,667.95 \r\n \r\n60.00 \r\n \r\n3,083,708.18 \r\n \r\n$ 10,415.51 $ 108,862.86 $ 3,374,376.13 \r\n \r\n$ 108,862.86 \r\n \r\n$ 10,415.51 \r\n \r\n$ 3,374,376.13 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 8 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT STATEMENT OF CHANGES IN FIDUCIARY NET POSITION \r\nFIDUCIARY FUNDS YEAR ENDED JUNE 30, 2014 \r\n \r\nEXHIBIT \"H\" \r\n \r\nADDITIONS Contributions Donors Employer Contributions \r\nInvestment Earnings Net Increase in Fair Value of Investments Interest Total Investment Earnings Total Additions \r\nDEDUCTIONS Administrative Expenses Benefits Paid to Participants Total Deductions Change in Net Position \r\nNet Position - Beginning \r\n \r\nPRIVATE PURPOSE TRUSTS \r\n \r\nPENSION TRUST FUND \r\n \r\n$ \r\n \r\n200.00 \r\n \r\n$ 304,253.00 \r\n \r\n200.00 \r\n \r\n304,253.00 \r\n \r\n0.00 0.00 200.00 \r\n \r\n299,381.60 174,731.22 \r\n474,112.82 \r\n778,365.82 \r\n \r\n422.96 \r\n \r\n23,093.56 222,307.36 \r\n \r\n422.96 \r\n \r\n245,400.92 \r\n \r\n-222.96 \r\n \r\n532,964.90 \r\n \r\n10,638.47 2,841,411.23 (1) \r\n \r\nNet Position - Ending \r\n \r\n$ 10,415.51 $ 3,374,376.13 \r\n \r\n(1) Amount has been restated from prior year report to adjust for a correction in the Plan's fiscal year end from June 30 to December 31 (see Footnote 2 for additional information on the Plan's fiscal year end). \r\n \r\nNet Position, July 1, 2013, as previously reported \r\n \r\n$ 2,917,768.79 \r\n \r\nEffects of correction in the Plan's fiscal year end Net Position, July 1, 2013, as restated \r\n \r\n-76,357.56 $ 2,841,411.23 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 9 - \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2014 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY \r\nREPORTING ENTITY \r\nThe Polk County School District (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. \r\nNOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES \r\nBASIS OF PRESENTATION \r\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 Polk County School District. \r\nDistrict-wide Statements: \r\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. \r\nThe Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities. \r\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. \r\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. \r\nFund Financial Statements: \r\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. \r\nThe School District reports the following major governmental funds: \r\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. \r\n District-wide Capital Projects Fund accounts for and reports financial resources including Bond Proceeds that are restricted, committed or assigned to the expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets. \r\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. \r\n \r\n- 11 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2014 \r\n \r\nEXHIBIT \"I\" \r\n \r\nThe School District reports the following fiduciary fund types: \r\n Private Purpose Trust fund reports trust arrangements under which income is to be used for the purpose of clothing and medical needs for disadvantaged students at the Superintendent's discretion and a scholarship for a student graduating from Rockmart High School. \r\n Agency funds account for assets held by the School District as an agent for funds, governments or individuals. \r\n Pension Trust Fund accounts for the activities of Polk County School District Social Security Replacement Plan, a single employer defined benefit pension plan for the group of employees covered by the Public School Employees Retirement System (PSERS). \r\nBASIS OF ACCOUNTING \r\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, and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year in which the underlying transaction (sale) takes place. Revenue from grants and donations are recognized in the fiscal year in which all eligibility requirements have been satisfied. \r\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. \r\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. \r\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, 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. \r\n \r\n- 12 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2014 \r\n \r\nEXHIBIT \"I\" \r\n \r\nRESTATEMENT OF PRIOR YEAR NET POSITION/FUND BALANCE \r\nFor fiscal year 2014, the School District made a variety of prior period adjustments which require the restatement of the June 30, 2013 net position in Governmental Activities. The result is a decrease in Net Position at July 1, 2013, of $2,599,266.17. This change is in accordance with generally accepted accounting principles. \r\n \r\nNet position, July 1, 2013 as previously reported $ \r\n \r\n78,245,749.89 \r\n \r\nCapital Lease Capital Appreciaton Bonds \r\n \r\n-253,087.42 -2,346,178.75 \r\n \r\nNet position, July 1, 2013, as restated \r\n \r\n$ \r\n \r\n75,646,483.72 \r\n \r\nNEW ACCOUNTING PRONOUNCEMENTS \r\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 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. \r\nIn fiscal year 2015, the School District will adopt Governmental Accounting Standards Board (GASB) Statement No. 67, Financial Reporting for Pension Plans, an amendment of GASB Statement No. 25, Financial Reporting for Defined Benefit Pension Plans and Note Disclosures for Defined Contribution Plans. This statement establishes new financial reporting standards for state and local governmental pension plans that are administered through a trust or similar arrangement. This statement will result in changes to the actuarial calculation of total and net pension liability and the related note disclosures and required supplementary information. \r\nIn fiscal year 2015, the School District will adopt Governmental Account 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 in fiscal year 2015 will result in a restatement to beginning net position. Based on current actuarial estimates, the School District's liability for the proportionate share of the Net Pension Liability of the pension plan administered through the Teachers' Retirement System of Georgia (TRS) is estimated to be $43.8 million at June 30, 2015. \r\nFISCAL YEAR ENDS \r\nAll funds are reported using fiscal years which end on June 30, except the defined benefit pension plan (fiduciary fund), which has a fiscal year ending December 31. \r\nCASH AND CASH EQUIVALENTS \r\nComposition of Deposits \r\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. \r\n \r\n- 13 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2014 \r\n \r\nEXHIBIT \"I\" \r\n \r\nINVESTMENTS \r\n \r\nComposition of Investments \r\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 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: \r\n \r\n1. Obligations issued by the State of Georgia or by other states, \r\n \r\n2. Obligations issued by the United States government, \r\n \r\n3. Obligations fully insured or guaranteed by the United States government or a United States government agency, \r\n \r\n4. Obligations of any corporation of the United States government, \r\n \r\n5. Prime banker's acceptances, \r\n \r\n6. The local government investment pool (Georgia Fund 1) administered by the State of Georgia, Office of the State Treasurer, \r\n \r\n7. Repurchase agreements, and \r\n \r\n8. Obligations of other political subdivisions of the State of Georgia. \r\n \r\nThe School District does not have a formal policy regarding investment policies that address credit quality risks, custodial credit risks, concentration of credit risks, or interest rate risks. \r\n \r\nRECEIVABLES \r\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. \r\n \r\nPROPERTY TAXES \r\nThe Polk County Board of Commissioners adopted the property tax levy for the 2013 tax digest year (calendar year) on August 7, 2013 (levy date) based on property values as of January 1, 2013. Taxes were due on December 1, 2013 (lien 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 Polk 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 $14,459,861.78. \r\n \r\nThe tax millage rate levied for the 2013 tax year (calendar year) for the Polk County School District was as follows (a mill equals $1 per thousand dollars of assessed value): \r\n \r\nSchool Operations \r\n \r\n16.28 mills \r\n \r\nAdditionally, Title Ad Valorem Tax revenues at the fund reporting level amounted to $758,796.65 during fiscal year ended June 30, 2014. \r\n- 14 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2014 \r\n \r\nEXHIBIT \"I\" \r\n \r\nSALES TAXES \r\nEducation Special Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $4,676,531.83 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. \r\n \r\nINVENTORIES \r\n \r\nFood Inventories \r\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. \r\n \r\nCAPITAL ASSETS \r\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. \r\n \r\nCapitalization thresholds and estimated useful lives of capital assets reported in the District-wide statements are as follows: \r\n \r\nCapitalization Policy \r\n \r\nEstimated Useful Life \r\n \r\nLand \r\n \r\nLand Improvements \r\n \r\n$ \r\n \r\nBuildings and Improvements $ \r\n \r\nEquipment \r\n \r\n$ \r\n \r\nIntangible Assets \r\n \r\n$ \r\n \r\nAll 50,000.00 50,000.00 50,000.00 50,000.00 \r\n \r\nN/A 20 to 60 years 25 to 60 years \r\n5 to 50 years 10 to 20 years \r\n \r\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. \r\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. \r\n \r\n- 15 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2014 \r\n \r\nEXHIBIT \"I\" \r\n \r\nDEFERRED OUTFLOWS/INFLOWS OF RESOURCES \r\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. \r\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, 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 in the period in which the amounts become available. \r\nGENERAL OBLIGATION BONDS \r\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. \r\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. \r\nNET POSITION \r\nThe School District's net position in the District-wide Statements is classified as follows: \r\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. \r\nRestricted Net Position - This represents resources for which the School District is legally or contractually obligated to spend resources for continuation of Federal and State programs and debt service in accordance with restrictions imposed by external third parties. \r\nUnrestricted Net Position - Unrestricted Net Position 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. \r\nFUND BALANCES \r\nThe School District's fund balances are classified as follows: \r\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. \r\n- 16 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2014 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\n \r\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. Assigned  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. \r\n \r\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. \r\n \r\nFund Balances of the Governmental Funds at June 30, 2014, are as follows: \r\n \r\nNonspendable \r\n \r\nInventories \r\n \r\nRestricted \r\n \r\nContinuation of Federal Programs $ \r\n \r\nContinuation of State Programs \r\n \r\nDebt Service \r\n \r\nAssigned \r\n \r\nSchool Activity Accounts \r\n \r\n$ \r\n \r\nSubsequent Period Expenditures \r\n \r\nUnassigned \r\n \r\n$ \r\n \r\n151,215.17 \r\n \r\n322,323.16 46,914.29 \r\n3,601,112.23 \r\n \r\n3,970,349.68 \r\n \r\n516,556.15 1,347,408.00 \r\n \r\n1,863,964.15 5,018,392.62 \r\n \r\nFund Balance, June 30, 2014 \r\n \r\n$ 11,003,921.62 \r\n \r\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. \r\nUSE OF ESTIMATES \r\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. \r\nNOTE 3: BUDGETARY DATA \r\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. \r\n- 17 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2014 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\nNOTE 4: DEPOSITS AND INVESTMENTS \r\nCOLLATERALIZATION OF DEPOSITS \r\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. \r\nAcceptable security for deposits consists of any one of or any combination of the following: \r\n1. Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, \r\n2. Insurance on accounts provided by the Federal Deposit Insurance Corporation, \r\n3. Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia, \r\n4. Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, \r\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, \r\n6. Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and \r\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. \r\nCATEGORIZATION OF DEPOSITS \r\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, the School District had deposits with a carrying amount of $8,612,602.22, which includes $10,473.28 in Certificates of Deposits that are reported as Investments and a bank balance of $9,663,640.76. The bank balances insured by Federal depository insurance were $1,085,293.14. \r\n \r\n- 18 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2014 \r\n \r\nEXHIBIT \"I\" \r\n \r\nThe amounts exposed to custodial credit risk are classified into three categories as follows: \r\n \r\nCategory 1 Category 2 - \r\nCategory 3 - \r\n \r\nUncollateralized, Cash collateralized with securities held by the pledging financial institution, or Cash collateralized with securities held by the pledging financial institution's trust department or agent but not in the School District's name. \r\n \r\nThe School District's deposits by custodial risk category at June 30, 2014, are as follows: \r\n \r\nCustodial Credit Risk Category \r\n \r\nBank Balance \r\n \r\n1 \r\n \r\n$ \r\n \r\n0.00 \r\n \r\n2 \r\n \r\n0.00 \r\n \r\n3 \r\n \r\n8,578,347.62 \r\n \r\nTotal \r\n \r\n$ 8,578,347.62 \r\n \r\nCATEGORIZATION OF INVESTMENTS \r\nAt June 30, 2014, the carrying value of the School District's total investment was $6,649,216.88. This includes $10,473.28 in Certificates of Deposit, which are collateralized in the same manner as other cash deposits. The School District's investments as of June 30, 2014, are presented below. All investments are presented by investment type and debt securities are presented by maturity. \r\n \r\nInvestment Type \r\n \r\nFair Value \r\n \r\nInvestment Maturity \r\nLess Than 1 Year \r\n \r\nDebt Securities U. S. Agencies \r\n \r\n$ 1,478,807.73 $ 1,478,807.73 \r\n \r\nOther Investments Bond Mutual Funds Equity Mutual Funds \r\n \r\n1,303,129.91 1,908,390.17 \r\n \r\nInvestment Pools Office of the State Treasurer Georgia Fund 1 \r\n \r\n1,947,781.17 \r\n \r\nTotal Investments \r\n \r\n$ 6,638,108.98 \r\n \r\nThe Georgia Fund 1 (local government investment pool) 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 (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. \r\n \r\n- 19 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2014 \r\n \r\nEXHIBIT \"I\" \r\n \r\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. \r\n \r\nInterest Rate Risk \r\nInterest rate risk is the risk that changes in interest rates of debt investment will adversely affect the fair value of an investment. The School District does not have a formal policy for managing interest rate risk. \r\n \r\nCustodial Credit Risk \r\nCustodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, the School District will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The School District does not have a formal policy for managing custodial credit risk for investments. \r\n \r\nAt June 30, 2014, $1,478,807.73 of the School District's applicable investments were (1) uninsured and unregistered, with securities held by the counterparty's trust department or agent in the name of the School District and (2) uninsured or unregistered, with securities held by the counterparty, or by its trust department or agent, but not in the School District's name. \r\n \r\nCredit Quality Risk \r\nCredit quality risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The School District does not have a formal policy for managing custodial credit risk. \r\n \r\nThe investments subject to credit quality risk are reflected below: \r\n \r\nRated Debt Investments \r\n \r\nFair Value \r\n \r\nQuality Ratings \r\n \r\nA \r\n \r\nUnrated \r\n \r\nDebt Securities \r\n \r\nU. S. Agencies \r\n \r\nImplicitly Guaranteed $ 1,478,807.73 \r\n \r\n$ 1,478,807.73 \r\n \r\nMutual Bond Fund \r\n \r\n1,303,129.91 $ 1,303,129.91 \r\n \r\nTotals by Quality Ratings $ 2,781,937.64 $ 1,303,129.91 $ 1,478,807.73 \r\n \r\nConcentration of Credit Risk \r\nConcentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The School District does not have a formal policy for managing concentration of credit risk. More than 5% of the School District's investments are in Mutual Equity Funds, Mutual Bond Funds, and Federal National Mortgage Association (FNMA) Discount Note. These investments are 29%, 20%, and 22%, respectively, of the School District's total investments. \r\nNOTE 5: NON-MONETARY TRANSACTIONS \r\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. \r\n \r\n- 20 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2014 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 6: CAPITAL ASSETS \r\nThe following is a summary of changes in the Capital Assets during the fiscal year: \r\n \r\nBalances July 1, 2013 \r\n \r\nIncreases \r\n \r\nDecreases \r\n \r\nBalances June 30, 2014 \r\n \r\nGovernmental Activities Capital Assets, Not Being Depreciated: \r\nLand Construction in Progress \r\n \r\n$ 2,288,639.00 $ \r\n \r\n0.20 $ \r\n \r\n0.00 \r\n \r\n287,120.00 \r\n \r\n0.00 $ \r\n \r\n2,288,639.20 287,120.00 \r\n \r\nTotal Capital Assets Not Being Depreciated \r\n \r\n2,288,639.00 \r\n \r\n287,120.20 \r\n \r\n0.00 \r\n \r\n2,575,759.20 \r\n \r\nCapital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements \r\nLess Accumulated Depreciation for: Buildings and Improvements Equipment Land Improvements \r\n \r\n93,554,710.00 4,710,824.00 2,401,817.00 \r\n \r\n118,800.00 183,812.70 118,162.05 \r\n \r\n1,171,657.91 \r\n \r\n92,501,852.09 4,894,636.70 2,519,979.05 \r\n \r\n18,690,410.02 3,222,907.87 1,030,822.94 \r\n \r\n1,707,848.88 345,830.68 69,540.84 \r\n \r\n1,005,004.07 \r\n \r\n19,393,254.83 3,568,738.55 1,100,363.78 \r\n \r\nTotal Capital Assets, Being Depreciated, Net \r\n \r\n77,723,210.17 \r\n \r\n-1,702,445.65 \r\n \r\n166,653.84 \r\n \r\n75,854,110.68 \r\n \r\nGovernmental Activity Capital Assets - Net \r\n \r\n$ 80,011,849.17 $ -1,415,325.45 $ 166,653.84 $ 78,429,869.88 \r\n \r\nCurrent year depreciation expense by function is as follows: \r\n \r\nInstruction \r\n \r\n$ \r\n \r\nSupport Services \r\n \r\nStudent Transportation Services \r\n \r\nFood Services \r\n \r\n1,753,192.30 \r\n343,272.77 26,755.33 \r\n \r\n$ \r\n \r\n2,123,220.40 \r\n \r\nNOTE 7: INTERFUND TRANSFERS \r\nInterfund transfers for the year ended June 30, 2014, consisted of the following: \r\nTransfers From \r\n \r\nTransfers to \r\n \r\nGeneral Fund \r\n \r\nDebt Service Fund \r\n \r\nDistrict-wide Capital Projects $ \r\n \r\n651,868.03 $ \r\n \r\n262,328.73 \r\n \r\n- 21 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2014 \r\n \r\nEXHIBIT \"I\" \r\n \r\nTransfers are used to move (1) property tax revenues collected by the General Fund to the Districtwide Capital Projects Fund as required match or supplemental funding source for capital construction projects and (2) excess sales tax revenues collected by the Debt Service Fund to the District-wide Capital Projects Fund for capital construction projects. \r\nNOTE 8: RISK MANAGEMENT \r\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. \r\nThe School District has obtained commercial insurance for risk of loss associated with torts, assets, errors or omissions, job related illness or injuries to employees, and acts of God. The School District has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the School District's insurance coverage in any of the past three years. \r\n \r\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. \r\n \r\nChanges in the unemployment compensation claims liability during the last two fiscal years are as follows: \r\n \r\nBeginning of Year Liability \r\n \r\nClaims and Changes in Estimates \r\n \r\nClaims Paid \r\n \r\nEnd of Year Liability \r\n \r\n2013 $ 2014 $ \r\n \r\n0.00 $ 0.00 $ \r\n \r\n2,060.00 $ \r\n \r\n2,060.00 $ \r\n \r\n51,780.00 $ 51,780.00 $ \r\n \r\n0.00 0.00 \r\n \r\nThe School District has purchased surety bonds to provide additional insurance coverage as follows: \r\n \r\nPosition Covered \r\n \r\nAmount \r\n \r\nSuperintendent All Other Employees \r\n \r\n$ \r\n \r\n50,000.00 \r\n \r\n$ \r\n \r\n250,000.00 \r\n \r\nNOTE 9: LONG-TERM LIABILITIES \r\nCAPITAL LEASES \r\nThe Polk County School District entered into a lease agreement for computer equipment during fiscal year 2013. This lease agreement 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 its inception. \r\n \r\n- 22 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2014 \r\n \r\nEXHIBIT \"I\" \r\n \r\nGENERAL OBLIGATION DEBT OUTSTANDING \r\nGeneral Obligation Bonds currently outstanding are as follows: \r\n \r\nPurpose \r\n \r\nInterest Rates \r\n \r\nAmount \r\n \r\nGeneral Government - QZAB - Series 2006 General Government - Capital Appreciation Bonds- Series 2008 \r\n \r\n0.00% $ 2,000,000.00 \r\n \r\n3.285% - 4.10% \r\n \r\n9,148,441.57 \r\n \r\n$ 11,148,441.57 \r\n \r\nThe changes in Long-Term Liabilities during the fiscal year ended June 30, 2014, were as follows: \r\n \r\nRestated Balance July 1, 2013 \r\n \r\nAdditions \r\n \r\nGovernmental Activities Acrreted Interest Deductions \r\n \r\nBalance \r\n \r\nDue Within One \r\n \r\nJune 30, 2014 \r\n \r\nYear \r\n \r\nG.O. Bonds \r\n \r\n$ 2,000,000.00 $ \r\n \r\nG.O. Capital \r\n \r\nAppreciation Bonds \r\n \r\n13,475,392.35 \r\n \r\nTotal G.O. Debt 15,475,392.35 \r\n \r\n0.00 \r\n \r\n$ 2,000,000.00 \r\n \r\n$ 0.00 \r\n \r\n528,049.22 $ 4,855,000.00 528,049.22 4,855,000.00 \r\n \r\n9,148,441.57 $ 4,855,000.00 11,148,441.57 4,855,000.00 \r\n \r\nCapital Leases \r\n \r\n253,087.42 \r\n \r\n82,779.70 \r\n \r\n170,307.72 \r\n \r\n84,352.51 \r\n \r\n$ 15,728,479.77 $ \r\n \r\n0.00 $ 528,049.22 $ 4,937,779.70 $ 11,318,749.29 $ 4,939,352.51 \r\n \r\nAt June 30, 2014, payments due by fiscal year which includes principal and interest for these items are as follows: \r\n \r\nFiscal Year Ended June 30: \r\n \r\nCapital Leases \r\n \r\nPrincipal \r\n \r\nInterest \r\n \r\n2015 2016 \r\n \r\n$ \r\n \r\n84,352.51 \r\n \r\n85,955.21 \r\n \r\n3,235.85 1,633.15 \r\n \r\nTotal Principal and Interest \r\n \r\n$ \r\n \r\n170,307.72 \r\n \r\n4,869.00 \r\n \r\nFiscal Year Ended June 30: \r\n \r\nGeneral Obligation Principal \r\n \r\n2015 2016 2023 \r\n \r\n$ \r\n \r\n4,855,000.00 \r\n \r\n4,855,000.00 \r\n \r\n2,000,000.00 \r\n \r\nLess Unaccreted Capital Appreciation Bonds \r\n \r\nTotal Principal \r\n \r\n$ \r\n \r\n561,558.43 11,148,441.57 \r\n \r\n- 23 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2014 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 10: ON-BEHALF PAYMENTS \r\nThe School District has recognized revenues and costs in the amount of $3,326,527.24 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies. \r\n \r\nGeorgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Certificated Personnel In the amount of $3,151,356.00 \r\n \r\nPaid to the Teachers' Retirement System of Georgia For Teachers' Retirement System (TRS) Employer's Cost In the amount of $54,072.24 \r\n \r\nOffice of the State Treasurer Paid to the Public School Employees Retirement System For Public School Employees' Retirement (PSERS) Employer's Cost In the amount of $121,099.00 \r\n \r\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. \r\n \r\nNOTE 11: SIGNIFICANT COMMITMENTS \r\nThe following is an analysis of significant outstanding construction or renovation contracts executed by the School District as of June 30, 2014: \r\n \r\nProject \r\n \r\nUnearned Executed Contracts \r\n \r\nCedartown Middle School Concession Stand $ Rockmart High School Billboard \r\n \r\n44,435.00 37,370.00 \r\n \r\n$ \r\n \r\n81,805.00 \r\n \r\nThe amounts described in this note are not reflected in the basic financial statements. \r\nNOTE 12: SIGNIFICANT CONTINGENT LIABILITIES \r\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. \r\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. \r\nNOTE 13: SUBSEQUENT EVENTS \r\nIn the subsequent fiscal year, voters authorized the School District to issue general obligation bonds in the amount of $12,500,000.00. The proceeds from these bonds will be used for various capital outlay projects. As of June 14, 2016, $12,500,000.00 of these bonds were issued and outstanding. \r\n \r\n- 24 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2014 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNOTE 14: POST-EMPLOYMENT BENEFITS \r\nGEORGIA SCHOOL PERSONNEL POST-EMPLOYMENT HEALTH BENEFIT FUND \r\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. \r\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. \r\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. \r\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: \r\nFor certificated teachers, librarians and regional educational service agencies and certain other eligible participants: \r\n \r\nJuly 1, 2013 - June 30, 2014 For non-certificated school personnel: \r\nJuly 1, 2013 - June 30, 2014 \r\n \r\n$945 per member per month $596.20 per member per month \r\n \r\n- 25 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2014 \r\n \r\nEXHIBIT \"I\" \r\n \r\nNo additional contribution was required by the Board for fiscal year 2014 nor contributed to the School OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the School plan for other post-employment benefits and are subject to appropriation. \r\n \r\nThe School District's combined active and retiree contributions to the health insurance plans, which \r\n \r\nequaled the required contribution, for the current fiscal year and the preceding two fiscal years were \r\n \r\nas follows: \r\n \r\nPercentage \r\n \r\nRequired \r\n \r\nFiscal Year \r\n \r\nContributed \r\n \r\nContribution \r\n \r\n2014 2013 2012 \r\n \r\n100% 100% 100% \r\n \r\n$ 6,508,004.52 $ 6,355,940.58 $ 6,379,710.83 \r\n \r\nNOTE 15: RETIREMENT PLANS \r\n \r\nTEACHERS' RETIREMENT SYSTEM OF GEORGIA (TRS) \r\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. \r\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. \r\n \r\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. Normal retirement (pension) benefits paid to members are equal to 2% of the average of the member's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 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. \r\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% 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. \r\n \r\n- 26 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2014 \r\n \r\nEXHIBIT \"I\" \r\n \r\nEmployer contributions for the current fiscal year and the preceding two fiscal years are as follows: \r\n \r\nFiscal Year \r\n \r\nPercentage Contributed \r\n \r\nRequired Contribution \r\n \r\n2014 2013 2012 \r\n \r\n100% 100% 100% \r\n \r\n$ 4,365,039.77 $ 4,154,316.25 $ 3,880,783.16 \r\n \r\nPUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM (PSERS) \r\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. \r\n \r\nPOLK COUNTY SCHOOL DISTRICT SOCIAL SECURITY REPLACEMENT PLAN \r\n \r\nPlan description \r\nAs of January 2004, the Polk County School District established a single employer defined benefit pension plan for the group of employees covered under the Public Service Employees Retirement System (PSERS). Recognizing that PSERS was a limited defined benefit plan that does not meet the requirements of a qualified social security replacement plan, the new plan was established for these employees to meet the requirements of a social security replacement plan. \r\nThe Polk County School District Social Security Replacement Plan (Plan) provides a pension benefit for each participant at retirement, equal to 1.5% of the participant's Average Monthly Compensation multiplied by his Years of Credited Service up to forty (40) Years of Credited Service. Years of service subsequent to July 1, 1991, are counted for purposes of determining a participant's benefit. The funding method and determination of benefits payable are provided in or authorized by various sections of Title 47 of the Official Code of Georgia Annotated (\"O.C.G.A.\"). The Plan does not issue a separate financial report. \r\n \r\nThe employee is always 100% vested in his accrued benefit in the Plan. \r\n \r\nThe Plan is funded by employer contributions held in trust by Reliance Trust Company. The Actuary for the plan is Swerdlin \u0026 Company. The Actuary determines the plan liabilities and required contributions on an annual basis. \r\nAs of January 1, 2014, there were 337 plan participants, consisting of the following: \r\n \r\nJanuary 1, 2014 \r\n \r\nActive Participants \r\n \r\n157 \r\n \r\nVested terminated participants \r\n \r\n78 \r\n \r\nRetirees, beneficiaries and disabled participants \r\n \r\n102 \r\n \r\n337 \r\n \r\nFunding Policy \r\nEmployees shall neither be required nor permitted to make contributions to the Plan. The Polk County School District (Employer) shall make the contributions required to fund the cost of the benefits provided to its eligible employees by this Plan. The Employer will make such contributions as necessary to fund the Plan in accordance with all applicable minimum funding standards under Georgia law. \r\n \r\n- 27 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2014 \r\n \r\nEXHIBIT \"I\" \r\n \r\nThe Employer's Annual Required Contribution is the actuarially determined amount necessary to fund the plan benefits. The current year required contribution is $310,889.00. The current contribution rate is 12.1% of annual covered payroll. \r\nAnnual pension cost and net position obligations \r\nThe annual pension costs and net position obligation at June 30, 2014 are as follows: \r\nJune 30, 2014 \r\n \r\nAnnual required contribution Interest on Net pension obligation Adjustment to annual required contribution Annual pension cost Contributions made Increase in net pension obligation \r\n \r\n$ \r\n \r\n310,889 \r\n \r\n11,994 \r\n \r\n-15,269 \r\n \r\n307,614 \r\n \r\n-304,253 \r\n \r\n3,361 \r\n \r\nNet pension obligation at beginning of year \r\n \r\n171,347 \r\n \r\nNet pension obligation at end of year \r\n \r\n$ \r\n \r\n174,708 \r\n \r\nFiscal Year Ending \r\n \r\nThree Year Trend Information \r\n \r\nAnnual \r\n \r\nAnnual \r\n \r\nPension \r\n \r\nPension \r\n \r\nPercentage \r\n \r\nCost \r\n \r\nContribution \r\n \r\nContributed \r\n \r\nNet Pension Obligation \r\n(Assets) \r\n \r\n6/30/2012 $ 317,621 $ 309,103 6/30/2013 $ 300,586 $ 321,125 6/30/2014 $ 307,614 $ 304,253 \r\n \r\n97.3% $ 191,886 106.8% $ 171,347 \r\n98.9% $ 174,708 \r\n \r\nFunded status and funding progress \r\nAs of January 1, 2014, the most recent actuarial valuation date, the plan was 55.5% funded. The actuarial accrued liability for benefits was $5,732,117, and the actuarial value of assets was $3,182,195, resulting in an unfunded actuarial accrued liability (UAAL) of $2,549,922. The required schedule of funding progress immediately following the notes to the financial statements presents multiyear trend information about whether the actuarial value of plan assets are increasing or decreasing over time relative to the actuarial accrued liability for benefits. \r\n \r\n- 28 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2014 \r\nActuarial Valuation Information  The actuarial valuation information is as follows: \r\n \r\nEXHIBIT \"I\" \r\n \r\nValuation Date \r\n \r\nJanuary 1, 2014 \r\n \r\nJanuary 1, 2013 \r\n \r\nActuarial Cost Method \r\n \r\nEntry Age Normal \r\n \r\nEntry Age Normal \r\n \r\nAmortization Method of UAAL \r\n \r\nLevel Percentage of Payroll \r\n \r\nLevel Percentage of Payroll \r\n \r\nAmortization Period of UAAL \r\n \r\n30 Year Closed \r\n \r\n30 Year Closed \r\n \r\nAsset Valuation Method \r\n \r\nSmooth Market Value \r\n \r\nSmooth Market Value \r\n \r\nAsctuarial Assumptions (see actuarial valuation reports for other assumptions used): \r\n \r\nInvestment Rate of Return \r\n \r\n7.00% \r\n \r\n7.00% \r\n \r\nProjected Salary Increases \r\n \r\n3.50% \r\n \r\n3.50% \r\n \r\nIncluding Inflation at \r\n \r\nCost-of-Living Adjustment \r\n \r\n2.50% \r\n \r\n2.50% \r\n \r\n- 29 - \r\n \r\n REQUIRED SUPPLEMENTARY INFORMATION \r\n \r\n POLK COUNTY SCHOOL DISTRICT SOCIAL SECURITY REPLACEMENT PLAN SCHEDULES OF FUNDING PROGRESS AND EMPLOYER CONTRIBUTIONS \r\nDEFINED BENEFIT PENSION PLAN YEAR ENDED JUNE 30, 2014 \r\n \r\nSCHEDULE \"1\" \r\n \r\nSCHEDULE OF FUNDING PROGRESS \r\n \r\nActuarial Valuation Date \r\n \r\nActuarial Value of Assets \r\n(a) \r\n \r\nActuarial Accrued Liability (AAL) \r\n(b) \r\n \r\nUnfunded AAL (UAAL) \r\n(b-a) \r\n \r\n1/1/2005 1/1/2006 1/1/2007 1/1/2008 1/1/2009 1/1/2010 1/1/2011 1/1/2012 1/1/2013 1/1/2014 \r\n \r\n$ 150,768 $ $ 498,858 $ $ 867,197 $ $ 1,249,591 $ $ 1,479,412 $ $ 1,889,374 $ $ 2,237,206 $ $ 2,511,141 $ $ 2,799,658 $ $ 3,182,195 $ \r\n \r\n3,014,010 $ 3,297,023 $ 3,685,989 $ 4,192,219 $ 4,120,607 $ 4,454,267 $ 4,622,943 $ 4,955,271 $ 5,173,490 $ 5,732,117 $ \r\n \r\n2,863,242 2,798,165 2,818,792 2,942,628 2,641,195 2,564,893 2,385,737 2,444,130 2,373,832 2,549,922 \r\n \r\nFunded Ratio (a/b) \r\n5% 15% 24% 30% 36% 42% 48% 51% 54% 56% \r\n \r\nAnnual Covered Payroll ( c ) \r\n$ 2,024,098 $ 1,992,181 $ 2,297,322 $ 2,726,097 $ 2,751,306 $ 2,853,461 $ 2,788,229 $ 2,858,397 $ 2,726,676 $ 2,562,945 \r\n \r\nUAAL as a Percentage of Covered \r\nPayroll ((b-a)/c) \r\n142% 141% 123% 108% 96% 90% 86% 86% 87% 100% \r\n \r\nSCHEDULE OF EMPLOYER CONTRIBUTIONS \r\n \r\nPlan Year Ended \r\n \r\nRequired Contribution \r\n \r\nPercentage Contributed \r\n \r\n12/31/2004 $ 12/31/2005 $ 12/31/2006 $ 12/31/2007 $ 12/31/2008 $ 12/31/2009 $ 12/31/2010 $ 12/31/2011 $ 12/31/2012 $ 12/31/2013 $ \r\n \r\n312,206 312,121 310,880 334,373 385,023 327,628 326,349 309,103 321,125 304,253 \r\n \r\n101% 119% 117% 102% 100% 109% 100% 100% 100% 100% \r\n \r\nNote: This schedule reflects the Plan's fiscal year. \r\n \r\n- 31 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT GENERAL FUND \r\nSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL \r\nYEAR ENDED JUNE 30, 2014 \r\n \r\nSCHEDULE \"2\" \r\n \r\nREVENUES \r\nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous \r\nTotal Revenues \r\nEXPENDITURES \r\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 \r\nTotal Expenditures \r\nExcess of Revenues over (under) Expenditures \r\nOTHER FINANCING USES \r\nOther Uses \r\nNet Change in Fund Balances \r\nFund Balances - Beginning \r\nFund Balances - Ending \r\n \r\nNONAPPROPRIATED BUDGETS \r\n \r\nORIGINAL (1) \r\n \r\nFINAL (1) \r\n \r\nACTUAL AMOUNTS \r\n \r\nVARIANCE OVER/UNDER \r\n \r\n$ \r\n \r\n13,535,000.00 $ \r\n \r\n13,535,000.00 $ \r\n \r\n33,081,730.57 3,592,490.00 100,000.00 6,100.00 214,000.00 \r\n \r\n34,549,062.31 8,911,072.00 100,000.00 6,100.00 214,000.00 \r\n \r\n50,529,320.57 \r\n \r\n57,315,234.31 \r\n \r\n15,255,044.05 $ 139,742.75 \r\n38,674,616.35 8,792,066.33 1,877,023.05 3,925.63 469,699.69 \r\n65,212,117.85 \r\n \r\n1,720,044.05 139,742.75 \r\n4,125,554.04 -119,005.67 \r\n1,777,023.05 -2,174.37 \r\n255,699.69 \r\n7,896,883.54 \r\n \r\n37,410,150.57 \r\n949,580.00 611,552.00 967,640.00 477,109.00 2,886,485.00 788,444.00 4,114,622.00 2,269,566.00 \r\n34,024.00 \r\n3,577,590.00 \r\n54,086,762.57 \r\n-3,557,442.00 \r\n \r\n42,872,562.77 \r\n1,324,149.00 1,491,254.00 \r\n967,640.00 513,461.00 2,886,485.00 788,444.00 4,121,222.00 2,393,163.00 \r\n34,024.00 336,888.00 \r\n3,577,590.00 \r\n61,306,882.77 \r\n-3,991,648.46 \r\n \r\n-350,000.00 -3,907,442.00 6,248,673.07 \r\n \r\n-350,000.00 -4,341,648.46 6,295,048.73 \r\n \r\n$ \r\n \r\n2,341,231.07 $ \r\n \r\n1,953,400.27 $ \r\n \r\n42,208,625.94 \r\n1,444,953.31 1,325,595.19 \r\n990,699.56 874,104.42 2,896,371.53 672,508.81 4,333,199.53 2,374,667.71 \r\n34,925.93 325,963.48 2,102,752.43 3,878,473.27 \r\n63,462,841.11 \r\n1,749,276.74 \r\n \r\n663,936.83 \r\n-120,804.31 165,658.81 -23,059.56 -360,643.42 \r\n-9,886.53 115,935.19 -211,977.53 \r\n18,495.29 -901.93 \r\n10,924.52 -2,102,752.43 \r\n-300,883.27 \r\n-2,155,958.34 \r\n5,740,925.20 \r\n \r\n-651,868.03 1,097,408.71 6,305,400.68 \r\n7,402,809.39 $ \r\n \r\n-301,868.03 5,439,057.17 \r\n10,351.95 \r\n5,449,409.12 \r\n \r\nNotes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual \r\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 $1,824,673.70 and $2,042,306.15, respectively. \r\nThe accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements. \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 32 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \r\nYEAR ENDED JUNE 30, 2014 \r\n \r\nSCHEDULE \"3\" \r\n \r\nFUNDING AGENCY PROGRAM/GRANT \r\nAgriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program \r\nTotal U. S. Department of Agriculture \r\nEducation, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Special Education Grants to States Preschool Grants \r\nTotal Special Education Cluster \r\nOther Programs Pass-Through From Georgia Department of Education Career and Technical Education - Basic Grants to States Education for Homeless Children and Youth English Language Acquisition Grants Improving Teacher Quality State Grants Migrant Education - State Grant Program Rural Education Title I Grants to Local Educational Agencies \r\nTotal Other Programs \r\nTotal U. S. Department of Education \r\n \r\nCFDA NUMBER \r\n \r\nPASSTHROUGH \r\nENTITY ID \r\nNUMBER \r\n \r\nEXPENDITURES IN PERIOD \r\n \r\n* 10.553 * 10.555 \r\n \r\nN/A \r\n \r\nN/A \r\n \r\n$ \r\n \r\n(2) 3,720,725.67 (1) \r\n3,720,725.67 \r\n \r\n84.027 \r\n \r\nN/A \r\n \r\n84.173 \r\n \r\nN/A \r\n \r\n84.048 \r\n \r\nN/A \r\n \r\n84.196 \r\n \r\nN/A \r\n \r\n84.365 \r\n \r\nN/A \r\n \r\n* 84.367 \r\n \r\nN/A \r\n \r\n84.011 \r\n \r\nN/A \r\n \r\n84.358 \r\n \r\nN/A \r\n \r\n* 84.010 \r\n \r\nN/A \r\n \r\n1,366,812.51 66,646.15 \r\n1,433,458.66 \r\n91,619.00 73,682.47 48,649.31 322,213.02 15,539.86 144,016.80 2,792,709.33 \r\n3,488,429.79 \r\n4,921,888.45 \r\n \r\nTotal Expenditures of Federal Awards \r\n \r\n$ \r\n \r\n8,642,614.12 \r\n \r\nN/A = Not Available \r\n \r\nNotes to the Schedule of Expenditures of Federal Awards \r\n \r\n(1) Includes the Federally assigned value of donated commodities for the Food Donation Program in the amount of $178,837.61. (2) Expenditures for the funds earned on the School Breakfast Program ($1,250,056.08) were not maintained separately and are included in \r\nthe 2014 National School Lunch Program. \r\n \r\nMajor Programs are identified by an asterisk (*) in front of the CFDA number. \r\n \r\nThe School District did not provide Federal Assistance to any Subrecipient. \r\n \r\nThe accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Polk County School District 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. \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 33 - \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF STATE REVENUE \r\nYEAR ENDED JUNE 30, 2014 \r\n \r\nSCHEDULE \"4\" \r\n \r\nAGENCY/FUNDING \r\nGRANTS Bright From the Start: Georgia Department of Early Care and Learning Pre-Kindergarten Program \r\nEducation, 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 Grades (6-8) 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 Amended Formula Adjustment Categorical Grants Pupil Transportation Regular Nursing Services 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 Residential Treatment Centers Grant Teachers' Retirement Technology To Support Digital Learning Bonds Vocational Education \r\nOffice of the State Treasurer Public School Employees Retirement \r\nCONTRACT Human Resources, Georgia Department of Family Connection \r\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 $3,151,356.00 are included as part of the Quality Basic Education revenue allotments above. \r\n \r\nGOVERNMENTAL FUND TYPE \r\nGENERAL FUND \r\n \r\n$ \r\n \r\n1,110,007.84 \r\n \r\n2,876,391.00 339,837.00 \r\n6,192,763.00 364,758.00 \r\n2,480,988.00 524,402.00 -4,819.00 \r\n4,382,811.00 3,727,345.00 1,228,839.00 6,535,726.00 1,456,256.00 \r\n528,792.00 309,799.00 656,703.00 840,237.00 250,013.00 163,879.00 \r\n3,209.00 \r\n969,749.00 1,684,408.00 1,942,753.00 -5,133,326.00 \r\n783,666.00 145,284.00 3,123,049.00 \r\n102,431.00 39,414.22 400.00 \r\n150,871.88 153,439.50 311,365.00 \r\n54,072.24 82,000.00 142,438.00 \r\n121,099.00 \r\n \r\n33,565.67 \r\n \r\n$ \r\n \r\n38,674,616.35 \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 34 - \r\n \r\n PROJECT \r\n(i) Acquiring, constructing, equipping, and completing the Rockmart area Van Wert Elementary School, (ii) acquiring, constructing, and equipping a new Cedartown area elementary school, and (iii) adding to constructing, renovating, repairing, improving, acquiring and equipping school buildings, other buildings, facilities, property and equipment, both real and personal, useful or desirable in connection therewith. \r\n \r\nPOLK COUNTY SCHOOL DISTRICT SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \r\nYEAR ENDED JUNE 30, 2014 \r\n \r\nSCHEDULE \"5\" \r\n \r\nORIGINAL ESTIMATED \r\nCOST (1) \r\n \r\nCURRENT ESTIMATED COSTS (2) \r\n \r\nAMOUNT EXPENDED IN CURRENT YEAR (3) (4) \r\n \r\nAMOUNT EXPENDED IN PRIOR YEARS (3) (4) \r\n \r\nTOTAL COMPLETION \r\nCOST \r\n \r\nEXCESS PROCEEDS NOT \r\nEXPENDED \r\n \r\nESTIMATED COMPLETION \r\nDATE \r\n \r\n$ 35,000,000.00 $ 27,413,170.55 $ 1,716,512.78 $ 25,322,002.72 $ \r\n \r\n0.00 $ \r\n \r\n0.00 \r\n \r\n12/31/2015 \r\n \r\n(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax. \r\n \r\n(2) The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion. \r\n \r\n(3) The voters of Polk 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. \r\n \r\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: \r\n \r\nPrior Years \r\n \r\n$ 2,841,964.88 \r\n \r\nCurrent Year \r\n \r\n950,948.85 \r\n \r\nTotal \r\n \r\n$ 3,792,913.73 \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 35 - \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) \r\nALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2014 \r\n \r\nSCHEDULE \"6\" \r\n \r\nDESCRIPTION \r\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 III Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) \r\nTOTAL DIRECT INSTRUCTIONAL PROGRAMS \r\nMedia Center Program Staff and Professional Development \r\n \r\nALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) (2) \r\n \r\nELIGIBLE QBE PROGRAM COSTS \r\n \r\nSALARIES \r\n \r\nOPERATIONS \r\n \r\nTOTAL \r\n \r\n$ 3,304,261.00 $ 385,766.00 \r\n7,106,670.00 429,461.00 \r\n2,900,558.00 \r\n564,761.00 5,048,194.00 4,205,496.00 1,488,857.00 7,445,346.00 \r\n1,658,989.00 553,136.00 361,400.00 747,339.00 \r\n36,200,234.00 \r\n965,262.00 187,651.00 \r\n \r\n3,130,400.13 $ 189,021.43 \r\n6,526,772.43 489,305.11 \r\n3,171,563.19 \r\n558,105.32 4,293,288.09 4,084,062.58 1,358,887.55 \r\n6,337,591.28 1,258,811.74 \r\n343,650.80 297,474.32 740,401.84 \r\n32,779,335.81 \r\n913,451.28 1,514.75 \r\n \r\n8,732.61 $ 224.62 \r\n31,421.42 425.08 \r\n17,732.35 \r\n \r\n3,139,132.74 189,246.05 \r\n6,558,193.85 489,730.19 \r\n3,189,295.54 \r\n \r\n356.18 13,178.80 74,416.49 73,326.32 \r\n \r\n558,461.50 4,306,466.89 4,158,479.07 1,432,213.87 \r\n \r\n36,073.19 3,302.55 \r\n76.21 \r\n \r\n6,373,664.47 1,262,114.29 \r\n343,650.80 297,474.32 740,478.05 \r\n \r\n259,265.82 \r\n \r\n33,038,601.63 \r\n \r\n66,328.28 7,112.91 \r\n \r\n979,779.56 8,627.66 \r\n \r\nTOTAL QBE FORMULA FUNDS \r\n \r\n$ 37,353,147.00 $ 33,694,301.84 $ 332,707.01 $ 34,027,008.85 \r\n \r\n(1) Comprised of State Funds plus Local Five Mill Share. (2) Allotments do not include the impact of the State amended formula adjustment. \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 37 - \r\n \r\n (This page left intentionally blank) \r\n \r\n SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS \r\n \r\n (This page left intentionally blank) \r\n \r\n Greg S. Griffin \r\nSTATE AUDITOR \r\n(404) 656-2174 \r\n \r\nDEPARTMENT OF AUDITS AND ACCOUNTS \r\n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \r\nJune 14, 2016 \r\n \r\nHonorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education \r\nand Superintendent and Members of the Polk County School District \r\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 \r\nLadies and Gentlemen: \r\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 Polk County School District as of and for the year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise Polk County School District's basic financial statements and have issued our report thereon dated June 14, 2016. \r\nInternal Control Over Financial Reporting \r\nIn planning and performing our audit of the financial statements, we considered Polk County School District's internal control over financial reporting 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 Polk County School District's internal control. Accordingly, we do not express an opinion on the effectiveness of the Polk County School District's internal control. \r\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. \r\n \r\n2014YB-10 \r\n \r\n (This page left intentionally blank) \r\n \r\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. 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. \r\nCompliance and Other Matters \r\nAs part of obtaining reasonable assurance about whether Polk County 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. \r\nPurpose of this Report \r\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, not to provide an opinion on the effectiveness of the Polk County Board of Education'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. \r\nRespectfully submitted, \r\n \r\nGSG:er 2014YB-10 \r\n \r\nGreg S. Griffin State Auditor \r\n \r\n (This page left intentionally blank) \r\n \r\n Greg S. Griffin \r\nSTATE AUDITOR \r\n(404) 656-2174 \r\n \r\nDEPARTMENT OF AUDITS AND ACCOUNTS \r\n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \r\nJune 14, 2016 \r\n \r\nHonorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education \r\nand Superintendent and Members of the Polk County School District \r\nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 \r\nLadies and Gentlemen: \r\nReport on Compliance for Each Major Federal Program \r\nWe have audited Polk County School District'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. Polk County 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. \r\nManagement's Responsibility \r\nManagement is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. \r\nAuditor's Responsibility \r\nOur responsibility is to express an opinion on compliance for each of Polk County 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 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 Polk County School District's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. \r\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 Polk County School District's compliance. \r\n2014SA-10 \r\n \r\n (This page left intentionally blank) \r\n \r\n Opinion on Each Major Federal Program \r\nIn our opinion, the Polk County 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, 2014. \r\nReport on Internal Control over Compliance \r\nManagement of Polk County 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 Polk County 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 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 Polk County School District's internal control over compliance. \r\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. \r\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. \r\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. \r\nRespectfully submitted, \r\n \r\nGSG:er 2014SA-10 \r\n \r\nGreg S. Griffin State Auditor \r\n \r\n (This page left intentionally blank) \r\n \r\n SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT AUDITEE'S RESPONSE \r\nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2014 \r\nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\nFINDING CONTROL NUMBER AND STATUS \r\nFS-7151-12-01 Further Action Not Warranted (1) FS-7151-13-01 Previously Reported Corrective Action Implemented \r\n(1) Finding has been repeated in fiscal year 2013, shown as FS-7151-13-01 \r\nPRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \r\nNo matters were reported. \r\n \r\n (This page left intentionally blank) \r\n \r\n SECTION IV FINDINGS AND QUESTIONED COSTS \r\n \r\n (This page left intentionally blank) \r\n \r\n POLK COUNTY SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2014 \r\n \r\nI SUMMARY OF AUDITOR'S RESULTS \r\n \r\nFinancial Statements \r\n \r\nType of auditor's report issue: Governmental Activities; General Fund; Capital Projects Fund; Debt Service Fund; Aggregate Remaining Fund Information \r\n \r\nUnmodified \r\n \r\nInternal control over financial reporting:  Material weakness identified?  Significant deficiency identified? \r\n \r\nNo None Reported \r\n \r\nNoncompliance material to financial statements noted: \r\n \r\nNo \r\n \r\nFederal Awards \r\n \r\nInternal Control over major programs:  Material weakness identified?  Significant deficiency identified? \r\n \r\nNo None Reported \r\n \r\nType of auditor's report issued on compliance for major programs: All major programs \r\n \r\nUnmodified \r\n \r\nAny audit findings disclosed that are required to be reported in \r\n \r\naccordance with OMB Circular A-133, Section 510(a)? \r\n \r\nNo \r\n \r\nIdentification of major programs: \r\n \r\nCFDA Numbers \r\n \r\nName of Federal Program or Cluster \r\n \r\n10.553, 10.555 84.010 84.367 \r\n \r\nChild Nutrition Cluster Title I, Grants to Local Education Agencies Improving Teacher Quality State Grants \r\n \r\nDollar threshold used to distinguish between Type A and Type B programs: \r\n \r\n$300,000.00 \r\n \r\nAuditee qualified as low-risk auditee? \r\n \r\nNo \r\n \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n \r\nNo matters were reported. \r\n \r\nIII FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \r\n \r\nNo matters were reported. \r\n \r\n "}],"pages":{"current_page":1,"next_page":null,"prev_page":null,"total_pages":1,"limit_value":10,"offset_value":0,"total_count":10,"first_page?":true,"last_page?":true},"facets":[{"name":"type_facet","items":[{"value":"Text","hits":10}],"options":{"sort":"count","limit":16,"offset":0,"prefix":null}},{"name":"creator_facet","items":[{"value":"Georgia. 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